Made an explainer for beginners explaining responsible usage of Margin/Leveraged trading for Bitcoin/crypto (instead of gambling degenerately with 100x leverage)
Here's the video: https://www.youtube.com/watch?v=p3xJOZoXJRk&feature=youtu.be Basically we think that too many people use margin/leverage trading, like 100x leverage on BitMEX, as a way to gamble instead of using it as a tool in your trading portfolio for sound strategies like risk management. In this video we share with you the different types of margin trading, how it works (cross vs. isolated, capital, margin, liquidation zone, stop loss, take profit levels, etc.), and also offer a few detailed examples with numbers of how to margin trade Bitcoin safely and responsibly. Hope this video helps those of you who are curious about this topic but never took the time to look into it or do the proper research yet!
Long Thesis - Progyny - 100% upside - High-growth, profitable company is the only differentiated provider in a large, growing, and underserved market. PGNY’s high-touch, seamless offering helps them stand out against large insurance carriers.
Link to my research report on PGNY Summary High-growth, profitable company is the only differentiated provider in a large, growing, and underserved market. PGNY’s high-touch, seamless offering helps them stand out against large insurance carriers. Covid-19 has shown the importance of benefits for employees and will continue to be the key differentiator for those thinking of changing jobs. According to RMANJ (Reproductive Medicine Associates of New Jersey), 68% of people would switch jobs for fertility benefits. For employers, Progyny reduces costs by including the latest cutting-edge technology in one packaged price, thereby lowering the risk of multiples and increasing the likelihood of pregnancy, keeping employees happy with an integrated, data-driven, concierge service partnering with a selective group of fertility doctors. Upside potential is 2x current price in the next 18 months. Overview Progyny Inc. (Nasdaq: PGNY), “PGNY” or the “Company”, based in New York, NY, is the leading independent fertility and family building benefits manager. Progyny serves as a value-add benefits manager sold to employers who want to improve their benefits coverage and retain and attract the best employees. Progyny offers a comprehensive solution and is truly disrupting the fertility industry. There is no standard fertility cycle, but the below is a good approximation of possible workflows: https://preview.redd.it/7aip8pna9zi51.png?width=941&format=png&auto=webp&s=7ef868a67eae10534bac254ab58fb3d4295aef37
Patient is referred to fertility center for evaluation for Assisted Reproductive Technology (“ART”) procedures, including in-vitro fertilization (“IVF “) and intrauterine insemination (“IUI”). Both can be aided by pharmaceuticals that stimulate egg production in the female patient. IVF involves the fertilization of the egg and sperm in the lab, while IUI is direct injection of the sperm sample into the uterus. Often, IUI is done first as it is less expensive. As success rates of IVF have increased, IUI utilization will likely fall.
Sperm washing is the separation of the sperm from the semen sample for embryo creation, and it enhances the freezing capacity of the sperm. Typically, a wash solution is added to the sample and then a centrifuge is used to undergo separation. This is done in both IUI and IVF.
Some OB/GYN platforms are pursuing vertical integration and offering fertility services directly. The OB would need to be credentialed at the lab / procedure center.
Specialty pharmacy arranges delivery of temperature sensitive Rx. Drug regimens include ovarian stimulation to increase the number of eggs or hormone manipulation to better time fertility cycles, among others.
Oocyte retrieval / aspiration is done under deep-sedation anesthesia in a procedure room, typically in the attached IVF lab. Transfer cycle implantation is done using ultrasound guidance without anesthesia. (Anecdotally, we have been told that only REIs can perform an egg retrieval. We have not been able to validate this).
Many clinics house frozen embryos on-site, while some clinics contract with 3rd parties to manage the process. During an IVF cycle, embryos are created from all available eggs. Single-embryo transfer (“SET”) is becoming the norm, which means that multiple embryos are then cryopreserved to use in the future. A fertility preservation cycle ends here with a female storing eggs for long-term usage (e.g. a woman in her young 20s deciding to freeze her eggs for starting a family later).
Common nomenclature refers to an IVF cycle or an IVF cycle with Intracytoplasmic sperm injection (“ICSI”). From a technical perspective, ICSI and IVF are different forms of embryo fertilization within an ART cycle.
ART clinics are frequently offering ancillary services such as embryo / egg adoption or surrogacy services. More frequently, there are independent companies that help with the adoption process and finding surrogates.
ART procedures are broken into two different types of cycles: a banking cycle is the process by which eggs are gathered, embryos are created and then transferred to cryopreservation. A transfer cycle is typically the transfer of a thawed embryo to the female for potential pregnancy. If a pregnancy does not occur, another transfer cycle ensues. Many REIs are moving towards a banking cycle, freezing all embryos, then transfer cycles until embryos are exhausted or a birth occurs. If a birth occurs with the first embryo, patients can keep their embryos for future pregnancy attempts, donate the embryos to a donation center, or request the destruction of the embryos.
The Company started as Auxogen Biosciences, an egg-freezing provider before changing business models to focus on providing a full-range of fertility benefits. In 2016, they launched with their first 5 employer clients and 110,000 members. As of June 30, 2020, the Company provided benefits to 134 employers and ~2.2 million members, year over year growth of 63%. 134 employers is less than 2% of the total addressable market of “approximately 8,000 self-insured employers in the United States (excluding quasi-governmental entities, such as universities and school systems, and labor unions) who have a minimum of 1,000 employees and represent approximately 69 million potential covered lives in total. Our current member base of 2.1 million represents only 3% of our total market opportunity.” The utilization rate for all Progyny members was less than 1% in 2019, offering significant leverageable upside as the topic of fertility becomes less taboo.
Fertility has historically been a process fraught one-sided knowledge, even more so than the typical physician procedure. Despite the increased availability of information on the internet, women who undergo fertility treatments have often described the experience as “byzantine” and “chaotic”. Outdated treatment models without the latest technology (or the latest tech offered as expensive a la carte options) continue to be the norm at traditional insurance providers as well as clinics that do not accept insurance. Progyny’s differentiated approach, including a high-touch concierge level of service for patients and data-driven decision making at the clinical level, has led to an NPS of 72 for fertility benefits and 80 for the integrated, optional pharmacy benefit. Typically, fertility benefits offered by large insurance carriers are add-ons to existing coverage subject to a lifetime maximum while simultaneously requiring physicians to try IUI 3 – 6 times before authorizing IVF. The success rate of IUI, also known as artificial insemination, is typically less than 10%, even when performed with medication. As mentioned in Progyny’s IPO “A patient with mandated fertility step therapy protocol may be required to undergo three to six cycles of IUI, which has an average success rate range of 5% to 15%, takes place over three to six months and can cost up to $4,000 per cycle (or an aggregate of approximately $12,000 to $24,000), according to FertilityIQ. Multiple rounds of mandated IUI is likely to exhaust the patient's lifetime dollar maximum fertility benefits and waste valuable time before more effective IVF treatment can be begun.” Success Rates for IVF IVF success rates vary greatly by age but were 49% on average for women younger than 35. The graph below shows success rates by all clinics by age group for those that did at least 10 cycles in the specific age group. As an example, for those in the ages 35 – 37, out of 456 available clinics, 425 performed at least 10 cycles with a median success rate of 39.7%. https://preview.redd.it/d2l5dtw89zi51.png?width=4990&format=png&auto=webp&s=5ff2ab9948b94419558a27ac861d4e498dce6713 Progyny’s Smart Cycle is the proprietary method the company has chosen as a “currency” for fertility benefits. As opposed to a traditional fee-for-service model with step-up methods, employers may choose to provide between 2 and unlimited Smart Cycles to employees. This enables employees to choose the provider’s best method. Included in the Smart Cycle, and another indicator of the Company’s forward-thinking methodology, are treatment options that deliver better outcomes (PGS, ICSI, multiple embryo freezing with future implantations). https://preview.redd.it/np577a389zi51.png?width=734&format=png&auto=webp&s=c061a2b24c8515890ba204479b4677893dabf755 As detailed in the chart above, a patient could undergo an IVF cycle that freezes all embryos (3/4 of a Smart Cycle), then transfer 5 frozen embryos (1/4 cycle each; each transfer would occur at peak ovulation, which would take at least 5 months) and use only 2 Smart Cycles. Alternatively, if the patient froze all embryos and got pregnant on the first embryo transfer, they would only use one cycle. Before advances in vitrification (freezing), patients could not be sure that an embryo created in the lab and frozen for later use would be viable, so using only one embryo at a time seemed wasteful. Now, as freezing technology has advanced, undergoing one pharmaceutical regime, one oocyte collection procedure, creating as many embryos as possible, and then transferring one embryo back into the uterus while freezing the rest provides the highest ROI. If the first transferred embryo fails to implant or otherwise does not lead to a baby, the patient can simply thaw the next embryo and try implantation again next month. Included in each Smart Cycle is pre-implantation genetic sequencing (“PGS”) on all available embryos and intracytoplasmic sperm injection (“ICSI”). PGS uses next-generation sequencing technology to determine the viability and sex of the embryo while ICSI is a process whereby a sperm is directly inserted into the egg to start fertilization, rather than allowing the sperm to penetrate the egg naturally. ICSI has a slightly higher rate of successful fertilization (as opposed to simply leaving the egg and sperm in the petri dish). Because Progyny’s experience is denominated in cycles of care, not simply dollars, patients and doctors can focus on what procedures offer the best return. 30% of the Company’s existing network of doctors do not accept insurance of any kind, other than Progyny, which speaks to the value that is provided to doctors and employers. For patients not looking to get pregnant, Progyny offers egg freezing as well. Progyny started as an egg-freezing manager, which allows a woman to preserve her fertility and manage her biological clock. As mentioned previously, pregnancy outcomes vary significantly and align closely with the age of the egg. Egg freezing is designed to allow a woman to save her younger eggs until she is ready to start a family. From an employer’s perspective, keeping younger women in the work force for longer is a cost savings. Vitrification technology has improved significantly since “Freeze your eggs, Free Your Career” was the headline on Bloomberg Businesweek in 2014, but we still don’t yet know the pregnancy rates for women who froze their eggs 5 years ago, but early results are promising and on par with IVF rates for women of similar ages now. From a female perspective, the egg freezing process is not an easy one. The patient is still required to inject themselves with stimulation drugs and the egg retrieval process is the same as in the IVF process (under sedation). The same number of days out of work are required. Using the SmartCycle benefit above as an example, the egg freezing process would require ½ of a Smart Cycle. The annual payment required to the clinic is typically included in the benefits package but may require out-of-pocket expenses covered by the employee. Contrary to popular belief, IVF pregnancies do not have a higher rate of multiples (twins, triplets, etc.), rather in order to reduce out of pocket costs, REIs have transferred multiple embryos to the patient, in the hopes of achieving a pregnancy. If you have struggled for years to get pregnant, and the doctor is suggesting that transferring 3 embryos at once is your best chance at success, you are unlikely to complain, nor are you likely to selectively eliminate an implanted embryo because you now have twins. There are several factors that are making it more likely / acceptable to transfer one embryo at a time, enabling Progyny’s success. https://preview.redd.it/48vk9gc69zi51.png?width=953&format=png&auto=webp&s=2c75a2771a1dd9a079074331b317451f076725ca From the Company: “According to a study published in the American Journal of Obstetrics & Gynecology that analyzed the total costs of care over 400,000 deliveries between 2005 and 2010, as adjusted for inflation, the maternity and perinatal healthcare costs attributable to a set of twins are approximately $150,000 on average, more than four times the comparable costs attributable to singleton births of approximately $35,000, and often exceed this average. In the case of triplets, the costs escalate significantly and average $560,000, sometimes extending upwards of $1.0 million.” “Progyny's selective network of high-quality fertility specialists consistently demonstrate a strong adherence to best practices with a substantially higher single embryo transfer rate. As a result, our members experience significantly fewer pregnancies with multiples (e.g., twins or triplets). Multiples are associated with a higher probability of adverse medical conditions for the mother and babies, and as a byproduct, significantly escalate the costs for employers. Our IVF multiples rate is 3.6% compared to the national average of 16.1%. A lower multiples rate is the primary means to achieving lower high-risk maternity and NICU expenses for our clients.” An educated and supported patient leads to better outcomes. Each patient gets a patient care advocate who interacts with a patient, on average, 15x during their usage of fertility benefits - before treatment, during treatment and post-pregnancy. The Company provides phone-based clinical education and support seven days a week and the Company’s proprietary “UnPack It” call allows patients to speak to a licensed pharmacy clinician who describes the medications included in the package (which contains an average of 20 items per cycle), provides instruction on proper medication administration, and ensures that cycles start on time. The Company’s single medication authorization and delivery led to no missed or delayed cycles in 2018. Previous conference calls have made note of the fact that the Company would like to purchase their own specialty pharmacy and own every aspect of that interaction, which should provide a lift to gross margins. This would allow PGNY to manage both the medication and the treatment, leading to decreased cost of fertility drugs. Under larger carrier programs, carriers manage access to treatment, but PBM manages access to medications, which can lead to a delay in cycle commencement. Progyny Rx can only be added to the Progyny fertility benefits solution (not offered without subscription to base fertility benefits) and offers patients a potentially lower cost fertility drug benefit, while streamlining what is often a frustrating part of the consumer experience. The Progyny Rx solution reduces dispensing and delivery times and eliminates the possibility that a cycle does not start on time due to a specialty pharmacy not delivering medication. Progyny bills employers for fertility medication as it is dispensed in accordance with the individual Smart Cycle contract. Progyny Rx was introduced in 2018 and represented only 5% of total revenue in 2018. By June 30, 2020, Progyny Rx represented 28% of total revenue and increased 15% y/y. The growth rate should slow and move more in line with the fertility benefits solution as the existing customer base adds it to their package. Progyny Rx can save employers 5% on spend for typical carrier fertility benefits or 21% of the drug spend. Prior authorization is not required, and the pre-screened network of specialty pharmacies can deliver within 48 hours. Additionally, PGNY has 1-year contracts, as opposed to 3 – 5 years like standard PBMs, but with guaranteed minimums, allowing them to purchase at discounts and pass part of the savings on to employers – another reason the attachment rate is so high. Large, Underpenetrated Addressable Market Total cycle counts are increasing (below, in 000s), including both freezing cycles and intended-pregnancy cycles. Acceleration in cycle volume is likely driven by a declining birth rate as women wait later in life to start a family, resulting in reduced fertility, as well as the number of non-traditional (LGBT and single parents). Conservatively, we believe cycles can double in the next 8 years, a 7% CAGR. https://preview.redd.it/y6y7jb559zi51.png?width=943&format=png&auto=webp&s=6cc5cdde7c6583d8e943d2675ad3b6ae85f818de Progyny believes its addressable market is the $6.7B spent on infertility treatments in 2017, but these numbers could easily understate the available market and potential patients as over 50% of people in the US who are diagnosed as infertile do not seek treatment. Additionally, according to the Company, 35% of its covered universe did not previously have fertility benefits in place previously, meaning there is a growing population of people who are now considering their fertility options. According to Willis Towers, Watson, ~ 55% of employers offered fertility benefits in 2018. A quick review of CDC stats and FertilityIQ shows a significant disparity in outcomes and emotions for those who are seeking treatment. While technology in the embryo lab is improving rapidly and success rates between clinics should be converging, there continue to be significant outliers. Clinics that follow what are now generally accepted procedures (follicle stimulating hormones, a 5-day incubation period and PGS to determine embryo viability) have seen success rates of at least 40%. There continue to be several providers that offer a mini-IVF cycle or natural IVF cycle. Designed to appeal to cost conscious cash payors, the on average $5,000 costs, is simply IVF without prescription drugs or any add-ons such as PGS. However, the success rates are on par with IUI and there is an abundance of patients over 40 using the service, where the success rates are already low. Additionally, success stories at these clinics frequently align with what is perceived as the worst parts of the process: One clinic offering a natural cycle IVF has a rating at FertilityIQ of ~8.0 with 60% of people strongly recommending it. This clinic performed 2,000 cycles in 2018 (the most recently available data from the CDC), making it one of the top 10 most active fertility center in the US. Their success rate for women under 35 was 23%, as opposed to the national average of 50% for all clinics. For women over 43, the average success rate for the most active 40 clinics in this demographic was 5.0% this clinics success rate was 0.4%. The lower success rate is likely due to the lack of pre-cycle drugs and PGS, but the success rate and the average rating is hard to understand. Part of this could be to the customer service provided by the clinic, or the perceived benefit of having to go into the office less often for check-ups when not doing a medication driven cycle. . Reviews from other clinics with high average customer ratings, but low success rates include: - “start of a journey that consisted of multiple IUI’s with numerous medications, but they were not successful.” - After an IVF retrieval, the couple had two viable embryos, both were transferred the next month” - “The couple started with a series of IUI treatments, three in total that were not successful.” - “After a fresh transfer of two embryos, again another unsuccessful cycle”. - “He suggested transferring 2 due to higher implantation rates, but there is increased rate of twins “ Valuation https://preview.redd.it/tqcykjm39zi51.png?width=6358&format=png&auto=webp&s=b63fd53c054ac5cbacaf9ccc734c7e73f0ea3c32 Progyny’s comps have typically been other high-growth companies that went public in the last two years: 1Life Healthcare (ONEM), Accolade (ACCD), Health Catalyst (HCAT), Health Equity (HQY), Livongo (LVGO), Phreesia (PHR), as well as Teladoc (TDOC). Despite revenue growth that outpaces these companies, PGNY’s revenue multiple of 4.4x 2021E revenue is a 40% discount to the peer group median. PNGY’s lower gross margin is likely limiting the multiple. However, Progyny is the one of the few profitable companies in this group and the only one with realistic EBTIDA margins. SG&A leverage is the most likely driver of increased EBITDA and can be achieved by utilizing data to improve clinical outcomes in the future, but primarily by increased productive of the sales reps, including larger employer wins and larger employee utilization. Perhaps the best direct comp is Bright Horizons (BFAM). BFAM offers childcare as a healthcare benefit where employees can use pre-tax dollars to pay for childcare. BFAM offers both onsite childcare centers built to the employer’s specification (owned by the employer and operated by BFAM), as well as shared-site locations that are open to the public and back-up sitter services. Currently, PGNY is trading at 4.4x 2021E Revenue, in-line with BFAM’s 4.3x multiple. I would argue that PGNY should trade significantly higher given the asset-lite business model and higher ROIC. Recent Results Post Covid-19, fertility treatments came back faster than anticipated, combined with disciplined operations, PGNY drove revenue and EBITDA above 2Q2020 consensus estimates. Utilization is still below historical levels, but management’s visibility led to excellent FY21 revenue estimates (consensus is around $555M, a y/y increase of 62%. 2Q2020 revenue increased 15% to $64.6M, and EBITDA increased 18% to $6.5M, primarily driven by SBC as the 15% revenue was not enough to leverage the additional G&A people hired in the last 18 months. The end of the quarter as fertility docs opened their offices back up for remote visits saw better operating margin. Despite the shutdown in fertility clinics during COVID-19, Progyny was able to successfully add several clients. “The significant majority of the clinics in our network chose to adhere to ASRMs guidelines, and our volume of fertility treatments and dispensing of the related medications declined significantly over the latter part of the quarter. . . Through the end of March and into the first half of April, we saw significant reductions in the utilization of the benefit by our members down to as low as 15%, when compared to the early part of Q1 were 15% of what we consider to be normal levels. In April, the New York Department of Health declared that fertility is an essential health service and stated that clinics have the authority to treat their patients and perform procedures during the pandemic. Then on April 24, ASRM updated its guidelines which were reaffirmed on May 11, advising that practices could reopen for all procedures so long as it could be done in a measured way that is safe for patients and staff.” Revenue increased by $33.8 million, 72% in 1Q2020. This increase is primarily due to a $19.0 million, or 47% increase, in revenue from fertility benefits. Additionally, the Company experienced a $14.8 million or 216% increase in revenue from specialty pharmacy. Revenue growth was due to the increase in the number of clients and covered lives. Progyny Rx revenue growth outpaced the fertility benefits revenue since Progyny Rx went live with only a select number of clients on January 1, 2018 and has continued to add both new and existing fertility benefit solution clients since its initial launch. Competition The only true competition is the large insurance companies, but, as mentioned previously, they are not delivering care the same way. WINFertility is the largest manager of fertility insurance benefits on behalf of Anthem, Aetna and Cigna and are not directly involved in the delivery of care. Carrot is a Silicon Valley startup that recently raised $24M in a Series B with several brand name customers (StitchFix, Slack) where they focus on negotiating discounts at fertility clinics for their customers, who then use after-tax dollars from their employers. Risks to Thesis Though there is risk a large carrier may switch to a model similar to Progyny’s, I believe it is unlikely given the established relationships with REIs at the clinic level, the difficulty of managing a more selective network of providers, and the lack of interest shown previously in eliminating the IUI. It is more likely a carrier would acquire Progyny first.
I hope your day is going well. This post might take a while to read, so sit back and be prepared to dedicate a little bit of time on this one. I promise you, this stuff is worth it to learn. Firstly, a recap of my progress so far trading pennystocks. I think my friend (more on this later) who introduced me to this subreddit did so on April 15th, not sure though. Here's where I'm at after 2.5 months of trading: https://preview.redd.it/co0o0qig92e51.png?width=795&format=png&auto=webp&s=c96713953f9a8c4fc66823719487e32c17c3b180 If you're familiar with my style of trading, you know that I risk small amounts, 5% per trade. However, I've started implementing a new strategy, where I scale into the position as the price moves in my favor, while at the same time eliminating the risk. it quite quickly compounds the tendies bro. All you have to do is adjust your stop loss higher as you buy more shares.
I've been trading with a great friend of mine. We became best bros in third grade when we both got accepted into the 'Gifted & Talented' program. He wishes to remain anonymous so that's as much as I'll say. Here is his fundamental analysis of AMTX: Ok so AMTX: last earnings call went well, they are a recycling company that is on the ground floor of recycling in India, also in California. They do biofuels like ethanol, that see good bumps when gas usage goes up and stays in the 40-60/barrel range. They held a Q/A in last earnings call in which they stated they anticipate the margins for ethanol profits to increase since some states are pushing for 15% ethanol blend over the current 10%, and studies have found that up to 20% is fine in vehicles. They also stated if they need to raise the stock price, they will do so with stock buy back, not reverse split. California is giving them grants for their recycling work, and they recently got 4 farms online for natural gas refinements, with 14 more signed up and should be connected to their plant soon. 4Q 2019 saw 52.1Mil revenue vs 38.8mil in 4Q 2018. Net loss was 7.7 mil for 4q2019, vs 11.4mil 4q2018. Revenue for 2019 202mil, 2018 was 171.5mil. They have the support of California regulators, and California Low Carbon Fuel standard is in their favor. They got their biodiesel plant in India up, all debt paid off, maintained 100% ownership with no dilution, and plan to use proceeds to pay down other debt and fund further renewable fuels projects. Expected revenue once india plant is at 100% production is 300mil from that plant alone. Planned biorefinery in California, with tax break of 12.5 mil offsetting equity, $125 mil from USDofAg. Expected revenue of $80mil, construction begins once engineering and procurement work is complete. I dont think its a 1400% runner, but they are doing good work, progressing towards significant revenue, and profit. And are the only company in all of India, and are in good with California, 2 huge biofuels markets. ______________________________________________________________________________________________ Ok now back to me, this is how we trade it. I apologize that I didn't post this sooner. I posted about taking this trade at $1.03 on my profile this morning.
HOW TO TRADE AMTX
Here is the chart that I made last night. I wanted to stay up and post all of this late last night but I fell asleep instead. You can see a lot going on here. The bro listed like seven different good things, and now we have like seven more good things. Truly inspirational. Great stock.
Golden Cross: On the daily chart, you can see those EMAs have crossed. And you can also see that the price had already broken out at the point. My friend and I are working on finding these slightly sooner, ideally for this one would've been in the $0.90 range, but hey, we don't need to capture 100% of the move.
You can see, that there were three seperate days where the price spiked, being held down by the 200ema each time. Anytime you see that, it is a very bullish sign.
It is also breaking out of the pennant that it created (red triangle)
The original entry for me was $1.03, with a stop loss at $0.91 and three seperate targets. It has already hit two of those, which brings the monthly fib extension target of $2.05 into play.
I have already exited half of my position and have a stop loss in profit so that I'm not losing any money and I've already secured the tendies
Here is the new chart, and what we can look for moving forward.
https://preview.redd.it/vokxj6wuf2e51.png?width=1828&format=png&auto=webp&s=df50c79a7210633d2fa8db03cff9a6ce225e0760 You can see that today was a bearish daily candle. However, look at the previous day's wick. It spiked through that monthly resistance and the weekly resistance above that. It is totally normal for a retracement in this area. And today's candle didnt even close within the body of the previous candle. The first potential trade is an entry anywhere below or at $1.18, or you could wait for a dip down to $1.12 depending on your style. I never wait for dips though because I'm impatient in trading sometimes. A stop loss of $1.07 would be sufficient imo. Underneath the weekly support at $1.12. If you don't know how to calculate position sizing yet, please learn before entering your next trade. The first target is a fibonacci 127 extension at $1.45. I will be looking to add positions here if i see bullish consolidation underneath monthly resistance at $1.40. The second target is at $1.70, which is a wick fill play off of that previous spike. It's also monthly resistance.
News Heading into Friday July 24th 2020 NOTE: PLEASE DO NOT YOLO THE VARIOUS TICKERS WITHOUT DOING RESEARCH. THE TIME STAMPS ON THE FOLLOWING ARTICLES MAY BE LATER THAN OTHERS ON THE WEB. THE CREATOR OF THIS THREAD COMPILED THE FOLLOWING IN A QUICK MANNER AND DOES NOT ATTEST TO THE VERACITY OF THE INFORMATION BELOW. YOU ARE RESPONSIBLE FOR VETTING YOUR OWN SOURCES AND DOING YOUR OWN DD.
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1st Round With the 3rd Overall Pick in the 2020 NFL Draft, the Detroit Lions Select Jeff Okudah, Cornerback, Ohio State University. Okudah here is the obvious choice. He is not quite a Jalen Ramsey caliber prospect, but close, and hopefully he will fill the gaping hole left by Darius Slay’s regression and departure. Okudah is a technician, he has incredible work ethic, an Energizer Bunny-like drive to get better, and reportedly has a thirst for learning that included him showing up at his defensive coordinator’s house on an off day to watch film. The best way I have seen it put – he is a disciple of his position, completely devoted to becoming better. Not all disciples become masters, but all masters were once disciples. I think Okudah was the obvious choice here, and I’m just glad we didn’t take Derrick Brown this high. Grade: A+ 2nd Round With the 35th Overall Pick in the 2020 NFL Draft, the Detroit Lions select D’Andre Swift, Running Back, University of Georgia. This came as no surprise to me. I was watching the draft via Pat McAfee’s stream, and when he erroneously reported the Dolphins selected Swift with their final 1st Rounder, I was heartbroken. Swift fills the biggest offensive need for the Lions – a stud running back capable of handling bellcow snap counts. I’m not sold on Kerryon Johnson. I’ve not given up on him either. He has spurts of brilliance, followed by mediocrity, and capped off by injury. He has missed 14 of 32 games. At worst, Kerryon was overdrafted by a wide margin. At best, the lighter workload will allow him to stay healthy and thrive in a run-first offense. Swift can be an immediate contributor on offense, he can help keep Kerryon healthy, and if Kerryon goes down – Swift can handle being RB1 without issue. The only thing I would rather have seen in this situation is AJ Epenesa, but I knew it wasn’t going to happen with the Patriots’ scheme. Grade: A- 3rd Round With the 67th Overall Pick of the 2020 NFL Draft, the Detroit Lions select Julian Okwara, Defensive End, University of Notre Dame. I’m in love with this pick. Okwara was considered a first round talent after his 2018 season. He fell to the third because of an injury, and if he can get healed up properly then the Lions got an absolute steal here. It is also cool to see because Julian’s brother Romeo is currently a Lion. I was surprised to see the coverage-creates-sacks New Engla- I mean, Detroit front office spend a third on a pass rusher, but I’m choosing to not question a good thing. The risk of “he’s not been the same since the injury” is absolutely worth the possible reward of a dominant DE here. Grade: A+ With the 75th Overall Pick of the 2020 NFL Draft, the Detroit Lions select Jonah Jackson, Offensive Guard, Ohio State University. I like, but don’t love, this pick. I’m not sure Jackson is ready to start, but the Lions moved up to get him. Still, it’s the third round. I think he can develop into a starter, he lacks as a pass protector, and I think he will be the weak link on the O-Line if he is forced into a starting role as a rookie. I would be higher on this pick if we didn’t spend extra draft capital moving up. Grade: B 4th Round With the 121st Overall Pick of the 2020 NFL Draft, the Detroit Lions select Logan Stenberg, Offensive Guard, University of Kentucky. OHHHH YEAHHHHH! THE KOOLAID MAN’S FILTHY BROTHER, MR. NASTY IS IN TOWN, AND HE’S READY TO RRRRRRRUMMMMBLE. Stenberg is a Kool-Aid machine, for sure. His nickname is Mr. Nasty and you can even buy his Mr. Nasty merch.LoganifyoureadthisIwillgladlyacceptasponsorship I myself will be buying a custom Lions jersey with his number and make the name on the back “Mr. Nasty.” He is a monster in the run blocking game, he jumps out and flat out assaults defenders like they owe him money. But, as with any 4th rounder, there is a downside to him – he lacks the agile footwork required of an NFL O-Lineman, which will make him a penalty risk unless he can fix that. He is also unproven as a pass protector, since Kentucky just doesn’t really throw the ball much. This is another high-upside guy who has the tools to develop into a great starter, the biggest drawback I see, and the reason I’m down on this pick, is that the front office essentially drafted what I would consider “project” players back-to-back for the exact same position. If the immediate previous pick wasn’t spent on Jonah Jackson, I’d have given this a much higher grade. Grade: C+ 5th Round With the 166th Overall Pick of the 2020 NFL Draft, the Detroit Lions select Quintez Cephus, Wide Receiver, University of Wisconsin-Madison. The Lions have two receivers on their roster that it’s time to start thinking about replacing – Marvin Jones Jr., who still has another 2-3 years of production left in him, and Danny Amendola, who is ancient by receiver standards. Cephus was used as a “big slot” role at Wisconsin. I’m not a big believer in the big slot guy being a wide receiver, if the game’s matchup dictates that a big man will work better in the slot then I much prefer putting a tight end in that role. That said, Okudah and many other Big 10 DBs said Cephus is the most difficult receiver to cover. His combine and pro day numbers don’t really match up, so I don’t know what to think there. My personal hope is that Cephus can develop into a receiver similar to Jones, though the consensus around Lions fans is that he will continue his slot role to become similar to Anquan Boldin. My fear is that his combine speed will be accurate, and the skills that made him difficult to cover in college won’t translate to the NFL. I can’t confidently judge this pick, but I will say he has all the downside and not nearly as much upside as the last three picks. Depending on his usage and development, his floor is Geronimo Allison and his ceiling is AJ Green. Grade: B With the 172nd Overall Pick of the 2020 NFL Draft, the Detroit Lions select Jason Huntley, Running Back, New Mexico State University. I’ve written about how I think Jason Huntley should be the chosen one to develop into a Slot WR. I believe his floor is JD McKissic and his ceiling is Randall Cobb. His build is much more that of a receiver, I honestly don’t think his body will be durable enough to handle full-time RB play in the NFL. If he is developed as a receiver, I am a huge fan of this pick. However, drafting Huntley cost the Lions a shot at Braden Mann. If Huntley is only used to replace Jamal Agnew as a returner and only contributes to the offense from deep on the depth chart, I would so much rather have drafted a generational talent at Punter. Grade: B IwillnowtakeamomenttosayIwouldhavegladlygivenupthe6thand7throunderstotradeupforMann.Orskippedthetrade-upforJacksontokeep#182.I’mnothighenoughoneitherofthesenexttwoguystoloseoutonMann. 6th Round With the 197th Overall Pick in the 2020 NFL Draft, the Detroit Lions select John Penisini, Defensive Tackle, University of Utah. The Lions were looking to improve their run defense, especially after losing Snacks Harrison. Penisini won’t do much for that, but he will be a half-decent backup nose tackle. He’s a 6th rounder for a reason – he is a backup at best, and has almost no pass rushing ability versus NFL caliber offensive lines. I’m okay with this pick this late in the draft, but I honestly believe he should’ve been a UDFA. Grade: D 7th Round With the 235th Overall Pick in the 2020 NFL Draft, the Detroit Lions select Jashon Cornell, Defensive Tackle, Ohio State University. After being disappointed by the 6th round, I am pleased with this 7th round pick. Jashon Cornell was graded by PFF as just slightly behind Derrick Brown. I’m not entirely sure why he fell to the 7th, but I assume it’s because he is 23 years old and leaves Ohio State as a 5th year senior. Cornell can be a rotational guy right away, and might be able to blossom into a starter on the D line. If not, it’s a 7th round pick. Grade: A+ Eventhoughwegotalotofvaluein#235,stillwould’vetradedbothPenisiniandCornellforMann. Remainder of post continued in comments. Links below Coaching Changes and game-by-game schedule prediction Free Agency and pre-draft day trades Training Camp Battles Excel Spreadsheet Download of my personal "armchair GM" 53 man roster (NOTE: This is not the roster I think the Lions will actually go with. Just a fun little experiment of how I'd build the team, especially given the new practice squad rules)
How Big Algos ‘milk’ ‘dumb retail’ in overextended markets The stock markets are rarely at their ‘fundamental / rational’ mean. They often overshoot in either direction, staying away from the mean for long periods of time. Lots of money can especially be made at the ‘bubble’ and ‘end-of-the-world’ extremes. How big algos and experienced large volume traders do it? What are some of the techniques to ‘milk’ the ‘dumb retail’? Let’s look at one. Most ‘dumb retail’ daily traders are taught: (1) basic ‘fundamentals’; (2) basic ‘technicals’; and (3) how to use margin trading. Usage of ‘stops’ is heavily promoted as a good risk management. The youngsters are given the confidence that anybody can trade and be successful. This is contrary to what Ray Dalio thinks - based strictly on an odds basis, a person has better odds of being successful in the Olympics than in the market. But back to ‘stops’. There are very sophisticated algos working against those who use stops as a risk management tool. Stops are known/visible and big algos and experienced traders hunt them down. They use their huge buying/selling volume to scalp and harvest stops from unsophisticated ‘dumb retail’. In overextended markets the patterns are particularly easy to recognise - experienced traders know them and algos are coded accordingly with high reward / low risk entry points on short timeframes. Mid-March, beginning of June and last 2-3 weeks are three great examples to analyse. Biased traders (particularly those with big egos and/or strong ‘fundamental’ bull/bear believes) continue stubbornly going long overextended bear markets or short overextended bull markets (trying to catch the bottom or top). With the stop levels clearly visible, the big guys hunt the stops down and overextend the already overextended market further. Unsophisticated ‘dumb retail’ blame the bad luck, stick to their biases and fundamental believes and keep doing the same. The results are typically the same, ‘dumb retail’ must run for cover at the ‘stop loss’ with big guys and algos pocketing the money. Lot’s of shorts had to cover on ES during the night prior to the open today. Even more so on YM. An easy game for algos / big guys – volumes are thin and ‘dump retail’ mostly sleeping. In case you missed: Importance of Patience and Ability to Do Nothinghttps://www.reddit.com/useNoProblemChanging/comments/ifuk1n/fundamentals_demystifying_certain_myths_3/ Never attempt to pick tops or bottoms https://www.reddit.com/useNoProblemChanging/comments/i9afnw/lesson_of_the_month_august_2020/ Intra-day trading has its own obvious problems but I’ll cover this in another post. If you find these posts useful, please comment / share. If not –please also express your opinions. What would be more useful?
A detailed guide and comparison between Sarwa and IBKR
As promised earlier I am sharing my experience investing with Sarwa and IBKR individually: Account opening: Opening an IBKR account with either Sarwa or directly through IBKR is extremely easy. On Sarwa you would have to sign up and upload a few documents, basically your passport and DEWA bill. You’ll have to take a selfie holding your passport for verification. The whole process takes about a week and Sarwa then emails you your IBKR credentials. You can then log in to uour IBKR account. With Sarwa you can schedule a call, that’s how I started with them, someone will call you at your preferred time and explain everything. The person calling you will probably gonna be your advisor. During signing up you fill some questions to test your risk appetite. Accordingly a plan is assigned to you. In my case I opted for a higher risk level than the one allocated to me. I discussed that with my advisor and she approved it. Different risk levels will have different target allocations of ETFS (For example, moderate growth is 38% American stocks, 31% developed markets, 16% bonds, 10% emerging markets & 5% real estate. The more risk you opt for the more American stocks you get and less bonds and vice versa. Directly through IBKR would basically be a similar process, the documents needed would also be the passport and last DEWA bill. They auto pull your info from your passport scan, if some details could not be pulled out correctly a manual check from IB’s side will be done. Account opening took about 5 days. Now there is no risk assessment and you are on your own. You can buy whatever ETFs or stock you like. No account opening fees either with Sarwa or IBKR. Trading: Obviously with Sarwa you cannot make trades yourself. Once you deposit the money in your IBKR account (A USA Citibank account) trades are made on the same day by Sarwa on your behalf. ETFs are purchased according to the target allocation of your profile. When fluctuations happen (example US stocks fall and bonds increase) and then you make further deposits they will rebalance your profile to maintain the target allocation. With IBKR you can buy whatever you want whether individual stocks or ETFs, diversified or not. It’s all on your own responsibility. Trading fees are completely waived with Sarwa. The trades they make on your behalf are free. With IBKR there are reasonable fees for buying and selling. I recommend using tiered structure (not fixed, you can choose that from settings). Just to give you an idea. A single purchase of 5,000 USD worth of ETFs incurs about 0.63 USD in fees. You cannot day trade with IBKR until your net liquidity value reaches 25K USD. You then have an unlimited number of daily trades. Less than 25K USD you will have to check your account to know how many trades you can perform daily/weekly. It’s very straightforward and clear. Fees: With Sarwa there is no account maintenance fees and you can start with 500 USD minimum balance. There is however an advisory fee. It is 0.85% annually charged on monthly basis for accounts worth 2500-50000K USD, 0.7% for accounts worth 50-100K USD and 0.5% for accounts above 100K USD value. No advisory fees for accounts worth 500-2500 USD. Example: Your account is worth 10,000 USD. Annual fee is 85 USD and you will be charged monthly 7 USD. With IBKR there is a 10USD monthly activity fee charged if your account is worth less than 100K USD. These fees are charged if you don’t trade. If you are actively trading commissions are deducted from those 10 dollars and you are probably won’t be paying these 10 USD. Example: Last month my trading commissions were 29 USD, I don’t pay the 10USD. If your monthly commissions are lets say 5 USD you pay 10USD – 5 USD = 5 USD and so on. Monthly activity fees are waived for the first 3 months. Monthly fees are only 3 USD for those aged less than 25 years old. Funding: Since both are IBKR accounts so funding is almost identical. You get detailed funding instructions on Sarwa’s website showing different UAE banks how-to(s). On IBKR there are also funding instructions, but not as detailed as on Sarwa and not of course tailored according to UAE banks. It’s still easy. My recommendation for funding is using Standard Chartered bank. They charge a fixed rate of 26.25 Dhs for every transfer. Corresponding bank fees are waived. Money reaches your USA IBKR account instantly and is immediately available for trading. Using 3rd party ways like Transferwise will incur higher charges according to my experience and will take more time. Moreover the funds will not be immediately available for trading (It matters if you want to seize the chance and buy in a dip). Also many transfers from Transferwise and Revolut are sometimes declined by IBKR. You can transfer from all other UAE banks but will have to pay corresponding bank fees of 25USD (amount less than 5K USD) 35 USD (between 5-25K) and 45 USD for amounts beyond 25K USD. Exchange rates differ from one bank to another and depends on your banking relationship. I would recommend you joiny SimplyFi facebook group and search there to learn about different bank fees. Citibank will also not charge a corresponding bank fees (Citi to Citi) and transfers are instant, but their rate is not competitive imho. Margin: Your account is a cash account with Sarwa. That means you can only buy ETFs equal to the amount of money your transfer. Pretty simple. With IBKR you first apply for a cash account. I later requested an upgrade for a margin account and got an approval the next day. A margin account basically means you can take a loan from IBKR to buy stocks/ETFs. The loan amount depends on your profile and assessment of IBKR. They gave me a leverage ratio of 2 (Example my worth is 10 USD I can take a margin loan of equal amount of 10USD). The margin interest rate is one of the lowest in the world currently at 1.6% annually (charged daily). Beware this is very risky and should only be attempted if you really know what you are doing. If your net liquidity value falls beyond a specific level IBKR will liquidate your positions. If you are interested in learning more about margin trading please private message me. Support: With Sarwa I get support via 3 methods, either messaging there whats app support number, my advisor’s whats app number or directly calling my advisor. It all works fine and they are all very responsive. With IBKR, you can either send inbox messages (Like with banks) or much more conveniently live chat with them. They are just great and will help you with anything. Finally: I have so many other things in mind I want to talk (Like subscriptions for market data & trading stations whether web based/desktop app/mobile app) but I feel that would be too much and maybe doesn’t interest everyone. So I can gladly answer any specific questions. As you can see I comparing features and general usage of both accounts and not investment and performance. My Sarwa account is up 12% in 7 months but that is basically because I bought in the March dip. My personal IBKR account of similar value is up only 3%, but this is a different story as the allocation and target is different in both scenarios. Please note I cannot advise on what to buy or sell as I am not a financial expert. Just sharing my experience as an individual. Cheers!
eBay DD Due Diligence, Coronavirus is about to reboot this stock to what it should have been worth years ago
*Authors note* Attempted to post this in WSB but it kept being rejected by the AUTOMOD because it said the title was too long. IDK what the issue is but I am posting it here if that is okay as I spent a lot of time on it. Apologies it was written in the voice of WSB. This is a great stock to buy as well so I think the people on this sub would appreciate the DD. I don't post here much, for those that don't know me I'm the one who posted a very in depth HUYA DD (Now taken down by the WSB mods I suspect because I made a post earnings update talking about some shenanigans) I sold my Huya 10/16 strikes for 800% profit last week. I will leave my options recommendations in the DD. I know Options are not a big thing here but TBH 1/15/21 $85 strikes are a very conservative investment. I have dysgraphia and dyslexia so my writing style can be brutal but the message should come across. *End Note* eBay could SOON become pound for pound one of the most profitable enterprises outside of gambling and drugs. TLDR Bad Leadership at eBay for YEARS Corona flips the script. Bull Case $180 Bear Case $220 Future Price Target maybe more. We will see how peoples mind changes when we see earnings. BUY 11 – 101 – 1001 Shares Depending on Bankroll (I like shares on this one as I expect the company to pay dividends) X Multiples of 100 for future CC. 7/31 $80C (These look the juiciest RN) (8/21 $90C if made available) 1/15/21 $85C Ebay is an online auction house. Look up your local auction house and spend an evening or day at the Auction. It is fun and will help you understand why previous CEO’s tanked this awesome company with their stupidity. Hammering a Diamond into a square hole. Worked for an auction house 4 years. If you go to a well run local auction you will see diverse people, successful auction houses have a customer makeup like this: 30% Hustlers and People involved with the auctions (Consignees etc) 20% Rich people (Rich people love auctions and I’m not talking about Sotherbys I’m talking about a normal sized city weekly auction there will be lots of rich people there) 40% Normal people that either like the thrill or value seekers. 10% Poor People. This is important when we talk about bad CEO decisions. You have to know your audience. Ebay started out with this dude selling a broken laser printer, Pierre Omidayer. It grew quickly and he brought in professional help. This can be a good thing as founders can get in the way of growth. In 1998 Meg Whitman was hired to be CEO. Her tenure was unimpressive and she was responsible for the first of two massive blunders that decapitated eBay growth. Ebay was growing and the internet was starting to get widespread use. By the early 2000s people started to talk about WEB 2.0 and for some reason certain people thought that WEB 2.0 meant being fancy. Ebay did a massive redesign that was hated by most people. Broadband internet was in it’s infancy and the focus on form over function was frustrating for low bandwidth users as the fanciness was more complicated and took longer to load. Additionally it stunted the pathway that would eventually appear for mobile growth. The remnants of this design linger today. Screen Cap of the AOLfication of eBay late 2003 I believe one of the big problems was rendering the menus in AJAX or something similar, very slow to load in that era Here we can see the failure in line graph form, (These things lag) eBay share price got hammered. One the reasons for the hammering was lackluster earnings, many ebay users attribute this to the redesign failure as it turned off existing and new customers. Link to image as it loos like this sub doesn't allow embeded images Project Ugly-ify and Slow-ify eBay looks to have lopped off growth and momentum for the share price. Meg Whitmans tenure at ebay neutered growth. One could blame Whitman for doing a lot of damage to eBay growth but she will largely be forgotten after you learn about the FLAMING DUMPSTER FIRE OF A CEO that is John Donahoe. In 2008 eBay hired Donahoe to be CEO. This could possibly be the worst hire in the history of all hires. Don’t take my word for it. In 2014 Carl Icahn said eBay was the worst run company he had ever seen. Carl Icahn says eBay is the worst run company he has ever seen Donahoe had series after series of bad decision. He basically went to war with small and medium sellers (eBay’s actual bread and butter customers) and went to great lengths to attract large corporate clients. (The worst type of business for eBay) and run away his most profitable customers. eBay is a market place. Donahoe gave steep discounts in fees in order to attract corporate customers. Companies like Target started to sell on eBays platform. (Most are now gone because within a few short years the internet was mature enough that they could start their own platforms) Link to no longer existing eBay Target Store Fee discounts to corporate customers angered existing sellers. In early 2013 he implemented eBay’s search algorithm (Cassini I believe it was called) Previous to this Algo eBay was just a dumb search engine. With the Algo, eBay could control visibility of items on the site via built in preferences like Best Match. With this Donahoe is about to fire maybe 20% of his most profitable customers and give the Amazon marketplace a flood of new users. This idiot was trying to turn an auction house into the next Amazon. Instead he just put Amazon growth on steroids and shoots himself in the foot. Cassini was used to ban eBay's customers. DROVES OF THEM Donahoe decided that any problems on eBay were caused by sellers and he declared war on the people that were his customers. Enter DSR. Detailed seller ratings was eBay implementation of strict guidelines for their sellers. DSR = 4 categories, each category was rated 1-5 with 5 being good. The system treated 1&2s as a failure. For Example Customer was unhappy with an item they received for whatever reason. If someone rated a part of the transaction a 2 they would get a ding against their DSR. Problem is they treated all categories the same and the thresholds were very stringent. For every 1000 transactions a seller had to have LESS than 10 dings in order to participate with Cassini without a search penalty. If the 10 threshold was crossed (Which is 98.9% or less good rating) they would be penalized in the search standing and go under probation. If they crossed 20/1000 or 97.9% or less positive approval rating they would BAN YOU FROM THE PLATFORM. YOU READ THAT CORRECTLY John DONAHOE in is infinite wisdom decided that sellers with as high as a 97.9% positive transaction rating were disposable. I've NEVER SEEN SOMETHING SO STUPID IN MY LIFE. I kid you not. Donahoe implemented a system where a 98.9% POSITIVE rating has a penalty and 97.9% positive is a ban. (Check the feedback on tons of Amazon marketplace sellers and you will see how ridiculous a threshold this was) What was even more ridiculous was in the beginning all categories were treated the same. For example Books were treated the same way as used women's clothing. Certain categories like womens clothing were DECIMATED by sellers being banned. People who had been on the platform for a decade and had say a 97% positive feedback selling USED WOMENS CLOTHING were banned left and right. It gets worse, remember how at 98.9% they would put you on probation? Some people called this the DEATH SPIRAL as if you were on probation the new “Best Match” system would lower your search standing. So if you were some poor schmuck who had sold 397 used pieces of womens clothing that year and just 4 of them were unhappy with the experience. You’d go on probation with little to no hope of anything other than the ban hammer. I’ve read many period era messageboard posts of long time sellers in probation trying to do EVERYTHING they could to raise their DSR to get out of probation but had zero visibility with the new algo, they were just left to wither on the vine hoping fruitlessly to turn things around. Most of them didn’t know it YET but eventually as people started putting the pieces together there was no chance of them escaping the Death Spiral. Gaggles of people spent MONTHS trying to save their accounts and eventually most of them realized they were screwed, there was nothing they could do about it because of the Algos. These sellers turned on ebay and took others with them. If you notice during this time period AMAZON marketplace took off. Daddy Bezo’s had a flood of experienced online traders who simply shifted their operations to the less popular (at the time) and more expensive platform (at the time). It was either that or close shop. MANY CHOSE TO CLOSE SHOP. The stupidity of all this was the Small and Medium sellers were the real money makers. eBay charges around a 9% fee with a cap of $250 per transaction. Which is more profitable? Target selling 50,000 items or 5,000 small to medium size sellers selling 100 items? The answer is in the nature of marketplaces. Target sells to 5,000 customers and that is the end of the story. Small to medium sized sellers tend to keep the money in the marketplace. User A sells to user B for $100 User B can turn around and take that $100 and buy something he needs for himself or his business from user C, user C can then do the same. Wash, Rinse, Repeat. Target selling $100 is a one way street while Small to Medium users can be a continuous money carousel. Donahoe in his infinite ignorance ran off many of his prime sellers. Ultimately sellers are your customers as they are the one’s who pay the fees. He jump started his competition whom he was stupidly trying to emulate. The important thing to understand about eBay is their product (An Auction) is easily scaleable and cheap to run For example this Rolex costs about the same to service this listing for a rug The Target deal, illustrated with a bathroom rug Chasing these corporate dollars was infinitely stupid.
They gave these corporations steep discounts to use the platform
The internet was maturing and we were just a few years from all these corporations having their own web presence
Robbed dollars and eyeballs from your bread and butter. Auction and Store listings of small to medium sellers.
Robs future revenue from carousel customers who return money to the marketplace and gives it to corporate customers who do not return dollars and are using the dollars they make off you to build the infrastructure to replace you. DING DING DING
This dude declared war on some of his best customers and tried to make eBay an ugly corporate shill and would eventually lead to the invasion of cheap Chinese stuff (eBay is now combating that) We can see the results of his war on customers with this graph. eBay’s growth and revenue was decimated by this idiot and you can see the results once the earnings were reported (Which lagged the implementation of his stupidity) War on customers displayed via line graph Donohoe decapitated ebay right during what would have been it’s prime growth years and funneled those customers to his biggest competitor. eBay can make far more with less because of the nature of it’s bread and butter customers. Many auction enthusiasts are high income types. eBay has better demographics financially than it’s competitors. There is even a fairly large industry of arbitrage where people sell items they source elsewhere (Like amazon) and basically drop ship them off as eBay sells because some stuff sells at a premium on eBay. eBay CAN make more money per transaction compared to similar industries and can capture a significant amount of money to return within the marketplace. Similar to sales tax, that dollar can bounce around within the marketplace and eBay can take it’s 9% cut every time it switches hands. Interesting side rabbit hole that arises during the Donahoe years. Donahoe was obsessed with attacking his own customers. This was commonly followed in an industry blog called AuctionWeb and then eventually named ecommercebytes. Run by the Steiner Couple Here is an article their website published about them getting rid of sellers They reported on all of eBay’s policy changes and basically called them out for being the giant window lickers they were. It ruffled a few feathers within the organization and now 6+ employees of eBay are being charged with crimes like harassment and stalking. Really a crazy story. DONAHOE is to blame for the policies and culture that allowed this to happen. He should go to jail over just what he did to the share price. Crazy eBay Criminal Stalking More Crazy eBay Harassment During all of this foot shooting was when Carl Icahn said that eBay was THE WORST RUN COMPANY HE HAD EVER SEEN One of the problems was the incestuous nature of eBay’s relationship with Paypal and the board members who presided over both. They basically spent a decade doing what was best for the board and not what was best for the Shareholders, employees and customers of eBay. This is now not so much a problem because many of those relationships no longer exist. In the aftermath the other pieces have found increased market value and eBay has been suppressed due to it being stuck with all the burdens of the Donahoe administration and bad perception. eBay should have been worth more as an individual piece and it’s was the one who took the financial hits. PayPal Split in 2015 PayPal has a 113 P/E (I’m not saying this is the best metric to judge a company I’m just using it for illustration) If eBay traded at Paypal P/E it would be worth $660 So what’s the catalyst to the eBay Rocket Ship that is about to take off? CORONA. Corona is shaking up the whole economy and this shake up will jolt eBay to it’s full potential. Alexa 90 days, even better at 140 and this growth is against the normal ebb of seasonal business Over the past 4 months as far as I can tell eBay has increased traffic by as much as 18%+ which is pretty AMAZING for a very mature internet company. Even more amazing when you take into account that this is normally eBays slow period. Traffic is normally on the downturn. YOY I am curious how much busier they have been I'm guessing 45% YOY increase in traffic for the Month of May & June April May June July are eBay’s 4 slowest months and the July 28th earnings will encompass 3 of those 4 months. During the slowest time of year eBay went from the mid 50’s to the lower 40’s for it’s spot in total Internet Traffic. A HUGE shift against the normal tide of business cycles. Traffic for last 90 days. Up much more over entire Corona Period the increase looks more bigly when you view 150 days out I've spent a few hours trawling eBay seller message boards. Within this quarter I have heard of increases in per transactions and a decrease in "Best Offers" which means better margins for sellers and more fees for eBay. I attribute this to Corona disrupting normal supply chains. eBay has been established for many years so boomers when they can’t find something are like "Oh Yeah EBAY." Many sellers report increased sells in business related categories and more aged inventory being sold as parts of the market shift towards online from some of the traditionally Bricks and Mortar industries. eBay has a very successful and well made app. Sellers are seeing increased usage amongst younger buyers/sellers whom are either bored with the lockdowns or looking for side income after losing their jobs. Remember when we mentioned 500 small sellers being worth more than one big corporate client? This will be obtained with an army of people using the app on their cell phones. Corona is going to get the attention of customers they lost over the years as they come back to the platform they remember, millennials and new users when they discover the well made app will come online. I've added the eBay App to my phone it is very good and has very customizable search features. The Bear case for eBay is even more, if Corona turns out to be worse (It’s not) everything online just becomes more valuable. So what is eBay worth? Well it’s a better investment IMO than Paypal eBay valued like Paypal is worth $660 Mercardo Libre is worth more than eBay (This is a Crime) as it is not even a top 1000 worldwide website while eBay is top 50. Plus it doesn’t even turn a profit. If you have any MELI stock sell half of it and buy eBay in addition to whatever you would buy if you didn't own MELI do the same for PayPal as well IMO. If eBay was valued like MELI it would be worth Tesla numbers Mercardo Libre has a 25% bigger market cap than eBay and doesn’t turn a profit. Ebay would be $76 a share just to be on par with MELI and it shouldn’t even be in the same ballpark. Etsy is just outside of the Top 100 for web traffic and has a 181 P/E if eBay was trading like ETSY it would be trading at $1090 a share If eBay was valued like ETSY it would trade for $1090 Channel Advisor is a company that grew out of offering services for eBay and while it works on multiple platforms it’s use was born from eBay and it has a 60 P/E If trading like Channel Advisor it would be worth $363 Corona shifted a lot of users to the eBay marketplace because of busted supply chains. They now have an Okay website and an EXCELLENT APP. This increased use comes during the traditional low tide of eBay traffic and if eBay leans into the coming quarters their revenue is going to skyrocket. Corona was the catalysts to wake everybody up to what eBay could do and what it should be worth. EBAY should be one of the most profitable companies in the US economy with lots of room to improve the bottom line. It has all the pieces. Like Selling off some of the MANY side projects under the eBay umbrella Streamlining Employment Just this month they are integrating their own payment platform which should add 1-2% more to every sell which is a big deal considering that the average fee is around 9%. We are talking about maybe 20% added to revenue with not much changing. BIG MONEY Winning back Small to Medium sellers and improving the per item transaction is eBay's ticket to tendie town. All the new growth they are experiencing is exactly what they need and want. They have a good App that can capitalize on the reboot. eBay has ample room for growth and I suspect the income levels of buyers in the marketplace is higher than competitors like Amazon, Etsy, Overstock, Stitch Fix. eBaY has more people with money paying attention. New CEO seems to be a bright guy. All he has to do is not SHOOT HIMSELF IN THE FOOT like the Donahoe CEO. If successful eBay will be on the moon mission of all moon missions MOST UNDERVALUED TECH COMPANY IN AMERICA. As always my DMs are open and I do mercenary stuff. I have my position and I am currently buying shares with a goal of 303 shares before earnings. I suspect this thing will have VERY little resistance upon takeoff Little Resistance BUY 11 – 101 – 1001 Shares Depending on Bankroll (I like shares on this one, I like the company and I'm expecting dividends) Once this rocket settles it is covered call selling time. (This is why you want multiples of 100 You should be at least a 80/20 Options/ Share split. Got to water the seed Options 7/31 $80C (8/21 $90C if ever made available) 1/15/21 $85C (Also I'd buy higher but they are not currently available, if BEFORE earnings Higher Strikes appear I would go up in strike A LOT. If earnings are up big this is ONLY THE BEGINNING as this is eBays SLOW PERIOD. Earnings for the fall will be CRAZY if Traffic continues to hold and if it has the normal Santa Claus Tax increase 🚀🚀🚀🚀🚀
Amazon Will Be The Next $2T Company – Why it’s Undervalued
Forget the hype about Tesla, Amazon is undervalued and is the safest place to park your money. I breakdown the reasons why below. Excuse the long post, but I like helping people make $. TLDR at the end. The only way to look at Amazon's business is to separate it out into three very large businesses, I will break down each and why I believe the company as a whole is undervalued: A/ Retail & Marketplace - this is the consumer facing portion of their business where Amazon buys at wholesale and then sells to shoppers. The latter (Marketplace), is the faster growing and more profitable business unit, now accounting for over 55% of all orders. Sellers use FBA and sell their products to shoppers directly where Amazon takes a ~7%-~15% fee depending on the category. B/ AWS – fast growing cloud business operating at 26% gross margins with a $50B run-rate growing 30% YoY (do you know how crazy it was typing that out?) C/ Amazon Media Group - this includes their fast growing advertising business, Twitch, Amazon Music, and Amazon Prime Video. This is the least-known portion of their business, but is the fastest growing with highest margins. Retail & Marketplace There’s not much to say here, other than Amazon does roughly ~$250B in sales and growing 30% YoY on average here. For reference, Walmart does ~$500B. Even if you gave the retail/marketplace portion of Amazon’s business a conservative valuation of $500B (2x revenue), it’s a very large business. Now, take into consideration how much they are emphasizing 3P sellers and private label products, Amazon’s profitability metrics will greatly improve in this business as it lowers its overhead so the business in value will continue to grow. This also fails to mention their breadth of their FBA business and how many sellers use the product offering. If anyone has sold anything on Amazon or knows someone that does, 99% of sellers use FBA because of how easy, convenient, and cost-effective it is. With the tailwinds associated with COVID, this business will likely surpass 30% YoY growth, which is just incredible growth #s for a business this large. In comparison, Walmart is usually <10% YoY growth when it comes to their revenue metrics. My valuation of the business = ~$500B - $750B AWS AWS is projected to do around $50B-$60B in sales for 2020. Latest public analyst valuations peg it around ~$500B, which I believe is unfair. For reference, MongoDB is trading at 20x revenue, Crowdstrike, DOCU, Datadog, all SAAS/cloud providers are trading at 20x or even more! Valuing AWS as a standalone business for anything less than $500B would be under-representing just how large and fast-growing this business is. Growing at 30% YoY at a $50B run-rate is just unfathomable. If we were looking at this at a 20x revenue multiple (which I believe it would be valued at a 20x multiple if it was a standalone company), AWS would be at a $1 trillion market cap alone. It's the de-facto choice for start-ups, even as Azure continues to take customers away, AWS is the leader for all new tech/start-up companies and will continue to see massive tailwinds as the entire economy shifts to cloud-based offerings. COVID has also accelerated this business as usage is undoubtedly up for their core segment of customers, while customers that are most affected (restaurants) are not really AWS-like customers. My valuation of this business unit = $650B Amazon Media Group Advertising – Many people don’t know much about this business, but you know the products you click on while you’re shopping around on Amazon? It’s safe to say a bunch of those products are paying Amazon significant dollars on a PPC basis (pay-per-click) to surface higher in the search results. This business generated $14 billion in revenue in 2019. Google, the leader in advertising, is valued at 10x revenue, so this business alone is probably worth close to $16B after 2020 alone. $FB did $73B in revenue trailing 12 months, this would mean FB is about 4.5x the size of Amazon's Advertising business ALONE. I just compared FB as a whole to Amazon's "side-business" in Advertising. Twitch – this is a tough business to value, but Needham and others have pegged it at ~$15 billion alone. It’s the clear leader in online streaming and Microsoft recently shutdown Mixer (their Twitch competitor). The possibilities here are endless, look for Amazon Advertising to plug in their data capabilities to target viewers of live streaming events with products soon. Twitch will soon be merged into the advertising ecosystem to begin serving targeted ads to viewers. Think ad-supported streams where there is some sort of revenue share back to the streamers. This feeds into the ecosystem where content creators make more $ (won't leave), advertisers get access to a valuable niche audience, and Amazon reaps the benefits of high-value/profitable advertising at 65% gross margins. Prime Video – the most surprising stat for Prime Video is that 20% of Prime members sign up primarily for Amazon Prime Video. With over 150M subscribers, analysts peg the value of Prime Video alone at $200b. Amazon has also entered the OTT ad-supported streaming market with IMDB TV (ad-supported free television). This is exclusive inventory that Amazon can offer to brands to advertise on, and compete directly with ROKU, which is valued at 15X revenue. Lastly, Amazon Music has 30M subscribers. Apple has 60M, and Spotify 100M. Amazon Music (Who the fuck uses it, is already half the size of Apple Music and about a 3rd of Spotify...) Because all the businesses aren’t broken out, it’s tough valuing the entire Media Group business, but it honestly could be in the range of anywhere b/w $300B-$600B off the synergies and potential for expansion. Again, as a standalone business, this suite of products would have public market investors salivating over the growth potential. Hidden Value (Areas of Opportunity) I went this entire DD without mentioning the huge competitive MOATs around voice (Echo = the leader), as well as their entire logistics/ground fulfillment network, Amazon GO stores, and their venture in the medical health space. Because it's nearly impossible to value these things as a whole, you can basically pencil w/e you want here from a valuation perspective. Amazon Retail/Marketplace Business - $650B AWS - $650B Amazon Media Group - $400B Hidden Value - Go stores, Fulfillment Network, Self-driving, Echo (voice), Whole Foods, Medical Venture with JP Morgan & Berkshire = $300B Total = $2B TLDR: Amazon is undervalued at a $1.6B market cap, and the stock will be up to $3500 in the next year. Business units valued as stand-alone companies would be valued way more, growth potential is endless, and COVID has accelerated trends in favor of Amazon for the next 5 yrs. - Longterm bag holder
Kareem Hunt is being drafted way too high in the early 6th round for a handcuff.
The common narrative I hear is he did it last year and how he had more ppr points as Chubb due to his receiving work. The thing is the offense and philosophy has completely changed this year after Kitchen's departure. Last year both Hunt and Chubb were on the field at the same time and there were designed plays to use Hunt as a receiver which elevated his totals in PPR. He still barely rushed the ball (just over 5 rushes per game) and most of his points came on receptions while being on the field with Chubb in the back field. So how does the offensive philosophy change now with Stefanski. Here is great article I found about the personnel usage for different teams in 2019. Here are some important snippets about the Vikings. From the article table(DVOA in 11 Personnel), Minnesota used the least mount of 11 personnel in the league last year by a huge margin. Arizona was 2nd which doesnt count because they used 4 WR sets often. So technically Minnesota had half the number of 11 personnel snaps as 2nd placed Eagles. So, 11 personnel will not be their main formation. I know this doesnt speak alot about Hunt but what I am trying to point out is I dont think Stefanski will be splitting Hunt wide often. We can all agree that OBJ and Landry will be there close to 100% of offensive snaps split wide as the two best receivers on the team. This leaves us to figure out the remaining 3 players on the personnel. From the article table(Number of Plays in Different Personnel Groups), Minnesota was 2nd in 2+TE usage behind Eagles and 2+RB usage behind SF. What does this mean? These categories do overlap somewhat; a 22 formation will count under both 2+ running backs and 2+ tight ends. The Vikings ran over 200 snaps in both 12 and 21 personnel groupings, with 101 more in 22 just for kicks, joining Baltimore as the only teams with 100 snaps in each of the three heftier formations. So you must be thinking, they will use Hunt and Chubb in 12 Personnel right? No, because the run game in a Kubiak system runs thru full back which the Browns prioritized to get one. We hear a lot coach speak int he media but you have to concentrate on the actual moves the team makes to figure out what they want to do. The first trade as a HC for Stefanski was for Andy Janovich. In fact he answered that specific question about FB during his AMA on the Browns subreddit from 7 months ago.
I have a healthy respect for the full back position. I think it gives you some versatility - because the defense has a hard time knowing whether we'll be in a one-back, two-back or empty set. In addition, and maybe most importantly, the full back brings a physical aspect to our football team, which is very important to me.
So the base 12 personnel which everyone thinks will be Hunt and Chubb will mostly be one RB running behind Andy Janovich. From the article Minnesota was only second to 49ers utilizing the I-formation with CJ Ham as their full back for close to 35% of all offensive formations. And to add to this they also went out and paid for Austin Hooper and drafted a TE in the 4th round along with retaining Njoku which points towards a heavy 21/22 utilization goal. So I think it is fair to say with a new offensive philosophy we can throw out the utilization of Chubb and Hunt on the field at the same time out of the window. The personnel usage will be alot of Landry and OBJ on the outside, Austin Hooper as TE, one RB, and a combination of Janovich or 2nd TE or 3rd WR or 2nd RB. So if that 5th position is taken up by FB 35% of time, 2nd TE 30%, 3rd WR 20% which will leave us to 15% of plays with Chubb and Hunt on the field at the same time. So I dont see a world where the same utilization from last year continues for these 2 backs. So the big question is how will the Browns split the pie for that 1 RB they will use to run the ball. If you look at last year Hunt barely rushed the ball 5 times a game and did not have any double digit carry games. There is a narrative pushed out saying but this could be a Ingram and Kamara type of scenario but again this is not the same. Kamara and Ingram are not bell cow backs where as Chubb is an absolute elite bell cow volume carrier and constantly taking him off the field will not help him get into the rhythm. These types of back's get better with more carries and Callahan said the same for Mixon a few weeks ago. Here is Melvin Gordon quote from last year
There's no rhythm you can get into with eight carries, I don't care what running back you are. I get stronger down the line.With the more carries you get, you run that play and you're like, 'Okay, this is how they are playing it.' So when you run that play again, I know how I'm going to treat it. But when you get eight carries, you've seen the same play for the first time every time. There's no feel to it, and you never get a feel for the game.
Based on all this I just dont see a pathway to any significant touches for Hunt. Sure if Chubb gets injured he has the RB1 potential but I do not want to draft my handcuff in the early 6th round. As good as Hunt is Chubb was PFF's highest graded RB and now the Browns have Conklin and Jedrick Wills at tackle along with a very good FB in Janovich. I predict Chubb will have close to 70% snap share with 20+ carries per game and 3 targets. He is also a decent pass catcher and again there is a false narrative of he isnt. Hunt will be no more than a 3rd down back used to give a breather to Chubb and I dont envision a scenario where I will be starting him.
NA to JP Parity Weapon Progression Guide (Ep3-Ep6)
After looking around trying to help respond to someones reply in a thread I noticed that there weren't that many progression guides for each weapon type so I figured I could make one for most classes. If Sega decides to follow the way that Ep4+ handled their drops then this list should be mostly correct and if Sega decides to throw a wrench in the mix like how they did with Neme/Slave weapons things might become a little different for a few of the classes. When it comes to NA Lightstream weapons will be name changed to Trailblazer weapons, Austere weapons will be name changed to Ophistia weapons, Takts are referred to as Harmonizers, and some of the other weapons might have their names changed. I don't want to change the name of them in the guide so that people looking them up wont be confused when they don't show up when looking for them.
These paths dont include the many many other side grades there are to each weapon but most weapons do have ones that can be better due to playstyle or just in very specific scenarios.
One of the things you will notice right away is that almost every weapon will have the Atlas series, Lightstream, Liberate, and Stil weapons as weapons to upgrade to. They are considered the best due to their ability to have S-Class affixes on them, they aren't like the usual affixes because instead of flat damage bonuses they will give various effects that are close to having extra potentials. A few examples are S4:Wand Clobber which gives you the attack speed bonus and hit-stun negation from the lavis cannon, S2:Medicinal Wisdom which causes you to get pp along with hp when you heal with mates, and S4:Vampiric Strike which will allow you to restore up to 30 hp per hit you do. There is a plethora of other ones you can choose from and set on the weapons to make them cover up the weakness of your weapon, double down on what the weapon does well, make you gain even more damage, grab potentials from older weapons, and even more things but you get the point. S-Class affixes will allow you to tailor weapons to your choosing and help create the best playstyle for each weapon type. The S-Class affixes have their own different slots being S1, S2, S3, S4, and S5 and also require the weapon of choice to have the S-Class slot supported on it. The Atlas series (S1-S4 Access), Lightstream (S1-S3 Access), Liberate (S4-S5 Access), and Stil weapons(S1-S3, S5 Access) will all have access to the most important S-Class affixes there is to offer while balancing it with high weapon damage and amazing potentials. Atlas: Atlas weapons are strong due to being the first weapons with S4 access and having a decent potential. The potential is simple and will give you (8/9/10%) more damage and once you make it to the 15* versions those will also add the ability to live one lethal attack with 1 hp and rapidly heal you to full once per quest. Very simple and strong but the big benefits are in having the S1-S4 access in allowing the access to some old potentials and the tailor-made playstyle for you. Lightstream: Lightstream weapons gain most of their strength in being a very strong PP Battery and having high base damage over Atlas in trade for an S4 slot. The potential gives you (8/9/10%) more damage just like Atlas but it makes Dark Blast last for 10 more seconds and also fully restores PP when you use a PA/Tech under 10% PP and gives 3% more damage for 30 seconds and has a 120 second cooldown. Even once you ditch the lightstream weapons for better weapons they will still have their use in being full PP regen in trade for the power of 1 PA/Tech. They still have S1-S3 access like Atlas but miss out on the strong S4s though even without them they are very strong weapons in their own regard. You will want to usually stick with 15* Atlas until you full affix your Lightstream weapon. Liberate: Liberate weapons are massive for a few weapons(Lookingatyousoaringblades) and great upgrades for the others. Their main appeal is in being the first weapons to have access to S5s and on top of that they also have access to S4s. Most S5s are recycles potentials on weapons that were very meta breaking weapons but they are usually locked to one weapon type. The potential will give (10%/15%/20%) more crit chance, give (10%/13%/16%) more damage, and have (10%/12%/15%) pp consumption reduction. The crit part of the potential will usually make up for the loss in crit chance for most classes by not having the S1-S3 slots to cap but for classes that already cap without needing those they end up losing more crit damage, its fine though because the high base damage and the % Damage boost will make up for it. Very good weapons at the start of ep6 but you will want to stick with one of the two ep5 ones until you fully make your liberate. Stil: Finally there is the Stil weapons, these are DPS machines and are the best weapons for almost every weapon type (*angrilystaresatJetBoots*). Boasting usually over 100 attack over the Liberate these monsters drop the S4 slot from liberate and add in S1-S3 slots allowing for more damage than obtainable from Liberates and that's before thinking about the Stil potentials. The Potential gives you 10% bonus damage and will increase at 0.4% per second you don't get hit eventually capping out (14%/15%/16%) but if you get hit you will lose 3% and have to build up again. When the power bonus is maxed you will get 40% damage reduction, restore 20 PP every 10 seconds, 60% increased natural PP recovery, and knockback immunity. These weapons are insane but can tend to under perform if you aren't to comfortable with whatever content you are trying. Either way if you are super comfortable or not these weapons will always be amazing just because of the S5's sheer power and the S1-S3s flexibility. You will be grinding for these a bit and the liberate will beat it out until the Stil is on its final version so don't full cross out your liberates once you get the stepping stones for a Stil.
Sword: Akatsuki potential is very strong due to the weapon giving hunter what it needs at almost every moment. The potential makes the weapon function with a 2 state system, sealed and unsealed, you can switch states by perfect guarding an attack with your weapon action. While sealed the weapon will regenerate (5%/7%/10%) HP every 10 seconds, fill focus while the weapon is out (70 seconds to max), and give you immunity to being knocked back. While unsealed you will deal (10%/11%/12%) more damage, have (10%/15%/20%) pp consumption reduction, and gain a chance to reduce damage taken by 99%. Sealed Form will allow you to start building up your gear during downtime instead of being dead in the water after boss goes out of range for a while. The knockback immunity helps during your PAs that don't have super armor so that you can be a little more aggressive along with the healing making those hits just be shrugged off. Unsealed is where you will spend most of your time, the damage bonus is the biggest thing that will make the weapon, its 5% off of a Neme/Slave when maxed but the base damage will make up for it so it ends up being stronger and the pp consumption effect won't disappear if you were to get hit. The damage reduction is just an extra effect that doesn't make or break the weapon but helps just make it that much better. On JP there is an additional potential that will boost those effects even further but its unknown if we will get it on NA right away. Double Saber: Quelle Scarlette is a very interesting weapon but ends up being one of the best for double saber. The potential will make Double Saber weapon action tornadoes last for 16 seconds longer and will deal (8%/9%/10%) extra damage than the usual version. As it stands in NA we don't have the ring for double sabers but that should change in ep4. The ring is huge for double saber allowing it to activate their weapon action tornadoes by just using any PA other than Chaos Slicer and Hurricane Hurl. With the Quelle Scarlette and the ring (which you will be using if you are using DS ever) makes one of your main damage sources on double saber just that much better due to just making it stronger and removing the downtime of having to use the weapon action to get the tornado off. The time limit increase on it also allows for easier focus generation for more tornadoes. On JP there is an additional potential that will boost the tornado damage by 14% more on top of the other potential making it on par with low end 15*s but at the current time its unknown if we will get it right away on NA. Katana: Kazami-no-tachi is huge for katanas due to the insane focus boosting effects of its potential. The potential will make the katana focus charge 8 times faster than normal, give you an extra (10%/12%/14%) Damage while focus is active, and cut the drain of having focus active down to only 33% of its normal rate. This weapon is insane for katanas because one of your big issues is that when you disconnect from a boss you will drain down to no gear pretty quickly causing you to have to build focus up and counter again to get back to your best damage, but with the Kazami that isn't an issue anymore because that drain rate is just about perfect for most bosses to become vulnerable before you run out of focus and on the off chance you do you will shoot right back up to max in just a few attacks. The damage bonus of it makes the weapon beat out Neme/Slave, even though Neme/Slave have a 3% higher damage multiplier the Kazami will win due to the higher base damage. JP has a second potential on this one also that will boost the damage by 7% more but as with the others there is no guarantee that we will get it on NA right away. Soaring Blades: OH BOY TIME TO TALK ABOUT THE JUPITER TULLUS. These Soaring Blades have the most insane potential Sega have ever put on a weapon. The potential makes you deal (6%/7%/8%) more damage, and fires a piercing lightning blade that scales with melee power (150%/200%/300%) after every PA and two after Kestrel Rampage. The damage potential of the lightning blades on these are INSANE, it makes the weapon beat out most of ep5 weapons and only start to lose out on ep6 weapons BUT the only reason why is because there is an S5 that just copies this potential. Since most of Soaring Blades is about abusing fast PAs in PBF windows you will be firing out those lighting blades at mach 10 with relative ease making you deal more damage in your burst along with also just working with almost every usual rotation you are going to do with soaring blades whether that be the usual PP dump combos, snatch combos, or whatever homebrew combos you pick. The dumber part of these also falls in the second potential on these which is just the other potential but with 12% more damage making it beat out even end game 15*s, but as with the others there is no way to tell if we will get it right away on NA. Assault Rifle: Spread Needle is a rifle that is very bad for Ranger but very good on Gunner. The potential give (8%/9%/10%) extra damage when in close range and adds an extra attack (100%/250%/400%) to the weapon that functions like a shotgun that will restores 6 PP when it connects and have a chance to stun on hit. Due to how Ranger's Sharpshooter skill works the rifle cant get both bonuses at the same time consistently but because Gunner and all of its close range skills naturally work on gunner it meshes very well, not to mention that Gunners will use the basic attack more for possible chaining because it isn't saving weak bullets like Ranger. The extra pp recovery from the rifle is a very nice addition but the stun isn't abused that often due to not wanting to use rifles during mobbing scenarios and most bosses cant actually be stunned with just the stun status. The rifle is a nice addition to a gunners arsenal but not that needed for a ranger. Spread Needle will also be stronger once it gets is second potential which will just copy the first one with an extra 10% damage making it go on par with low end 15*s, just like the others we don't know if NA will get it right away. Twin Machine Guns: Quelle Windea is going to be one of the best TMGs due to just its sheer utility alone. The potential makes it so that when you activate Chain Trigger you will recover 100 PP, Become invincible for 5 seconds, and gain (10%/12%/14%) increased damage for 60 seconds. There is so much going on for gunner here, for starters you can now use Chain Trigger as a panic button to keep yourself from dying, you don't have to worry about running out of pp if you pop it early while waiting for a weak point to be exposed, and finally YOU CAN KEEP THE DAMAGE BUFF UP FOREVER. As a gunner when you pop a 100 chain you will either have a few seconds left on the timer or just immediately have it ready right away depending on how long it took you to pop the chain. 60 seconds is a very long time for a gunner to not use a chain and will only really happen if you ever have a chain time out or if it's on a part that gets broken, but most of these won't really happen to you once you have the fight down enough. Even after this TMG is outclassed it will still have usage in its utility alone by allowing you to switch to it, pop chain, and gain the effects for a few seconds, making it a good investment for later also. Just like the others it also gains a second potential that is just the first but better, the increases for the second are making you gain 50 more pp on activation and 8% more damage also. We also fall right in line with the others on not being sure if we will get the second one right away on NA though but still very good to keep in mind. Rods: Eternal Psycho Drive's usage can be a little iffy to people but in my opinion it will be one of the better rods we will have access to due to how compounds work. The potential will boost the effects of element conversion for matching element (15%/20%/25%) and off element (20%/25%/30%), it will also reduce the pp consumption (1/2/3) of all techs. The element conversion part will just add that flat amount to element conversion making on and off element on par with damage and due to how compounds will take advantage of element conversion you will boost the damage of compounds by a pretty significant margin along with making every element you cast gain element conversions full effects. The part that can hurt though is that compared to a Nemesis Rod techs can possibly cost a little more but the damage bonus will more than make up for it. Like the others it will gain a boosted version of the normal potential that will increase matching element and off element by 15% along with 1 more pp consumption reduction. The second potential will make it keep up with low end 15*s and become a solid choice until your atlas rod. The usual downside ensues though, no idea if we will get the second potential or not right away on NA. Wand: Lavis Cannon is a good wand on Te/Hu due to its potential. The potential on it makes your attacks speed up by 28%, removes all hit stun off of your attacks, and gives you a shockwave on the third hit of your normal attack combo that scales with melee power (600%/700%/900%) and restores 10 pp when it hits. It's one of the strongest due to scaling nature of the third hit which enables a ton more damage than just the higher base damage of slave/nemesis not to mention that the increased attack speed will make you get to the third hit even faster. There is also an eventual second potential that will give the Lavis an extra 5% damage on top of the other potential but it is unknown if we are going to get it right away on NA. Jet Boots: Serpen Plenzer is actually an outlier to the outliers due to it being the best jet boots you can get once we make it on par with JP. The potential follows the Jupiter Tullus in being a weapon that seems to be on track to only be beaten by itself. The potential will give you (6%/7%/8%) extra damage and double the speed of Jetsweep Kick while also increasing the range of it. The main goal of jet boots on JP is to maximize the amount of Jetsweep Kicks you can get during your Rapid Boost phases and this aligns nicely with that speeding up its usual loop by almost double the speed and making Jetsweep almost your longest range PA. It's something that almost no matter how strong future weapons will be it isn't going to beat the pure range/utility/spam that the Serpens will allow and to top it off it comes with S1-S3 slots also making it even more future proof than the Jupiter Tullus were. Takt: Rykros Staff is one of the best Takts that the game has to offer even leading into Ep6 where it is almost matched in power by the Liberate Takt. The potential on the Rykros will auto fire off a single target Megid that scales with tech power (1500%/1700%/2000%) for each PA your pet does during Alter Ego and will auto fulfill pet sympathy during Alter Ego after 5s with no cost. This Takt is insane due to how well it scales with most pets, the only one that can't abuse it to its fullest extent is only Viola due to it's slower nature. It will be the main takt in your arsenal for a long time due to the Jupiter Tullus nature of the potential in that it is just so busted that the only thing that will seem to beat it is just making it again. As like most of the other outliers there is also a second potential that is the same as the first and will increase the Megid damage by 500% and also just like most of the others it's unsure if we will get that one also when it drops on NA.
Austere: The Austere series is another series that will be introduced in EP5 but it will be considered a side grade due to the nature of its potential. It's potential will give you effects based on what Photon Blasts you use during a quest making it more suited for quests that will last for longer than just 1-2 blasts, The main content for that being the endless quests that will loop till you run out of time. Their biggest saving grace will be that you will be able to farm Austere weapons due to them being created by drops and not requiring the special stones that the Atlas series and Lightstream series will require to be created. Plus Potentials: Austere, Atlas, and majority of the Outlier weapons will gain new plus potentials making them on par with stronger weapons. I chose not to factor those into the gear progression due to how we most likely won't be able to access them until about mid Ep6 and then there will be about 2 easy to obtain weapons that will be stronger in the mean time. When they do drop though, The Atlas weapons will become slightly weaker sidegrades to Stil, it allows Austere to rival usefulness for some classes vs Stil, and the Outliers will usually start pushing up to low end 15* or higher depending on the weapon. This should allow for some people to ignore upgrades until then you are fine with lower damage until the pluses, but if you want to push the strongest you can be the usual list should be the go to. These will be referred to as Redux Potentials when they come out on NA. Yasminkov 4000FJ: The Yasminkov 4000FJ is a 14* launcher that released in Ep5 on the JP servers. The potential will make the launcher fire four rockets as its basic attack that will home in on enemies and deal 33% of a normal shots damage, its main usage is in gaining pp since each rocket will give you pp instead of just one making you usually cap on pp in about 1-2 rockets. The only thing holding this one back from just being the best is because it comes out in Ep5 when there is the easy to obtain and stronger Atlas Weapons. It will always have its use as a pp battery for mobbing though. Exium Bunker: The Exium Bunker is another 14* launcher that also came out in Ep5 on JP. The potential will change the PA Contact Blast making it deal 3 times its normal damage and only cost 1 pp. Once you use a boosted version the attack, you will go back to the normal usage for 60 seconds or you can dodge through an attack to get it back. It's strong but its main issue is that most players aren't going to be that good on spam rolling through attacks to make use of the potential at its fullest. Just like the 4000FJ though it has the issue of coming out in Ep5 and having to try and beat out a Atlas for best in slot status. Gear Experience: The Gear Experience is a 14* Knuckle that came out towards the beginning of Ep5 on JP. The potential will make it so that every time you dodge an attack with the weapon action, you will fire out a meteor fist that will also give you invincibility until the animation ends. The meteor fist will always be the giant version making you avoid any rng needed to get one off. This weapon is actually really strong but only in certain situations, those being any fight that requires excessive dodging, any fight that has DoT pools, or a free field where you can sit in a hazard. This knuckle will out damage most others during this situation but the way the fights in Ep5+ will function there will usually be a dodge phase then a damage phase in which you will dump all of your pp. The Gear Experience will seem like it would be useful on the dodge phases till you realize that most of the bosses are flying some how or have points that will be in the air causing you to just prefer Twin daggers for those times, but on the bosses that do work to the Gear Experiences strengths they will just melt like butter. As with the other Ep5 sidegrades its fighting against the Atlas and lightstream in terms of strength causing them to fall off a bit. Genon: The Genon seires of weapons are a 15* series that was introduced in Ep6 that every class except summoner will have access to in one of their weapon types. Their damage is on the low end of the 15* s and is beaten out by most other choices at that point but their true use falls in their utility from their potential. The potential on them will decrease the pp consumption of PAs/Techs by 45% but you will take a flat 90 damage every time you use one. Looking at them with just that alone makes them seem like very bad weapons because why go for a low damage weapon that will just make you suicidal until you realize that they have S2 and S3 slots on them. Those two slots make this weapon go from very bad to the best pp battery in the game due to the Cursed Radiance S-Class affixes. Cursed radiance will make you gain 15% of your max PP every time you take damage meaning that in 3 PA/Tech usages you will gain 90% of your pp back. The effect is insane and will always be a pocket pp battery that can be used in situations where trading some hp for a full pp bar will be ok and when in combination with a lightstream you will pretty much never have any reason to be at 0 pp. Orbit/Mirage/Nova: These series of weapons (along with the Austere if it has the correct affixes) are the primere PP regen weapons until we get the Genon series in Ep6 and even then will still have their uses. The Orbit series was a 13* series came out in Ep3 on JP while the Mirage and Nova came out in Ep6 being 14* and 15* respectively. The Orbit and Nova share the same two potentials while the Mirage will only have a changed version of their first potentials. The first potential will increase your PP regen by 200% while your weapon is sheathed and halt it while its unseathed but will increase your pp gained per hit by 60%. The second potential will decrease your pp regen by 60% while your weapon is sheathed and increase it by 20% while its unseathed while also increasing your pp gained per hit by 20%. Finally the Mirage potential will increase your PP regen by 250% while your weapon is sheathed and halt it while its unseathed but will increase your pp gained per hit by 50%. The only potential worth worrying over is the first and mirage ones, due to the fact that the weapons will have low damage making them not wanting to be used for fighting compared the other weapons that are available when they come out. The main usage for these weapons will be just swaping to them during downtime or when you are repositioning to regen pp at a higher rate than usual. The Mirage will have an S3 slot and the Nova an S3 and S4 slot to make them even better than orbit so dont worry about them just being fancy reskins. These weapons arent as good as genon at PP regen but will offer a safer albeit slower way to regen pp as needed.
Sorry for not including Gunblades and more sidegrades. I am not familiar at all with Gunblades and the only class that will realistically make use of them isn't out at the time of me writing this. The sidegrades are just that, sidegrades and not the main focus for each weapon type, but I will be adding any notable ones that people mention in the comments. Also sorry for not mentioning anything on the Scion classes. I didn't want to include any of the scion classes in the list as to not confuse people on some of the weapon upgrades due to the nature of scions changing how weapons work. If any of the information is wrong or can be changed somehow feel free to let me know, it's been awhile since I've had to look back at each weapon type so I might have missed one or two weapons that are possibly just as good as some others. EDIT: Added u/Laggoz recommendation on what the Takt Progression is and why Rykros Staff. Along with some general formatting changes and some extra bits. EDIT 2: Added information about the Plus potentials to the Honorable Mentions part EDIT 3: Added some bits about the names of weapons being different from JP. Thanks to u/synthsy for pointing them out for me! EDIT 4: Added the Yasminkov 4000FJ, Exium Bunker, and Gear Experience into the honorable mentions section. EDIT 5: Added the Genons and Orbit/Mirage/Nova series into the honorable mentions section.
HPE: Transition to As-a-Service and Path to All-Time Highs
COVID-induced demand pressures for enterprise hardware and recent execution issues have HPE shares trading at 4-year lows and down 41% YTD. However, HPE-as-a-Service strategy starting to show real momentum. Combined with advancements in edge-to-cloud infrastructure offerings, HPE among best values in large cap tech for investors looking to gain exposure to edge networking, distributed computing, and remote working trends. Here's why: Background What is HPE exactly? It is a question that HPE itself has found difficult to answer in the five years since splitting off from the original Hewlett Packard (HPQ). At the time of the split, HPE was more or less described as everything but the PCs and printers. It was a lot of hardware, software, services, but without a clear strategy on how to win in the age of the cloud. As other companies from the PC era, like Microsoft, Dell, and Intel, effectively pivoted their businesses to compete in the cloud and data center, HPE experienced a combination of false starts, missteps, and inconsistent execution. Following its most recent quarterly report in May, an earnings miss coupled with a new cost-cutting initiative sent shares down 10%. And the company now trades at levels not seen since early 2016. With HPE trading at less than 7x forward earnings, markets seem to be pricing in a low probability of a turnaround. However, despite difficulties in gaining traction as a standalone company, it may not be time to give up on HPE just yet. Revenue misses in six consecutive quarters and fears over another round of restructuring are distracting from early signs of success in HPE’s transformation to an as-a-service company. With the mega cap and hyper-growth tech trade looking a little overheated on a valuation basis, HPE could present an attractive way to gain exposure to multiple long-term technology trends – namely edge networking, distributed computing, and remote work – while also benefiting from a stabilization and recovery in enterprise hardware IT spend once the COVID-19 induced headwinds subside. Summary
Previous company pivots failed to position the company to succeed in the cloud era
Near-term, HPE remains subject to enterprise hardware demand pressures due to COVID-19
Past execution issues, inconsistent earnings, and multiple restructuring efforts are overshadowing momentum developing under HPE-as-a-Service strategy
Once enterprise hardware spend rebounds, HPE likely to show material improvements in financial performance and execution
HPE 3.0 is poised to expand margins, provide greater revenue stability, and grow earnings power on the back of major trends in networking, computing, and work
Assigning HPE a three-year price target of $35
HPE 1.0 and 2.0: How We Got Here HPE 1.0 When HPE was still part of the combined HPE-HPQ, the company had attempted to carve out share in the public cloud and was unsuccessful. Having shuttered that business in 2015, HPE sought to position itself as a more focused and agile end-to-end infrastructure solutions company. This was the strategic rationale behind the decision to merge its enterprise services division with CSC in 2017. The resulting DXC Technology became a pure-play IT services and consulting company. HPE then sold the majority of its enterprise software, database, and analytics offerings to UK-based Micro Focus. HPE 2.0 Around the time of the spin-merger with Micro Focus, HPE revealed its “HPE Next” strategy to fundamentally redesign the company over a three-year period. Although HPE stated its desire to streamline operations, optimize manufacturing, and improve its go-to-market approach, HPE Next was mostly workforce optimizations, or in other words: layoffs. HPE Next did contribute to improvements in EPS numbers from 1Q18 to 4Q19, but following a modest increase in revenue over the first four quarters under the plan, sales have been stagnant or lower in each of the subsequent reports. 2Q20 Earnings As part of HPE’s 2Q20 earnings release, the company announced yet another restructuring plan aimed at conserving capital, flexibility, and liquidity given the uncertainty surrounding the global pandemic. The cost-cutting calls for at least $1bn in targeted gross savings by 2022. Together with a 15% decline in revenues year-over-year when holding for currency fluctuations, analysts were quick to issue six downgrades. These numbers do not tell the whole story though. In the face of a tough pricing environment for hardware, gross margins were stable at 32% compared to last year. And several critical business segments showed signs of relative strength in light of the broader market context. HPE’s big data solutions grew 61% year-over-year, with storage services from the Nimble business unit jumping 20%. HPE’s edge networking segment that houses HPE Aruba only saw declines of 2%. And HPE’s flagship as-a-service offering, HPE GreenLake, saw its annual revenue run rate increase 17% to $520mn. HPE GreenLake is now the company’s best performing business according to CEO Antonio Neri. When considering HPE exited the quarter with a $1.5bn backlog, or 2x historical levels, it’s very likely that procurements were delayed or rescheduled rather than canceled. Because of this, once IT departments have greater visibility into the crisis, HPE should be poised to see a sharp recovery in its hardware-focused reporting segments. HPE 3.0: HPE-as-a-Service After years of difficulties defining its value proposition in the new computing landscape, HPE appears to have developed a distinct approach to leverage its networking, computing, storage, and software capabilities and bundle them into a fully integrated edge-to-cloud platform. The strategy, HPE-as-a-Service, aims to offer every single HPE product on a pay-per-use subscription basis by 2022. The company’s new IT equipment and services package, HPE GreenLake, takes a range of products selected by the customer and provides a simplified management console and on-demand toolkit for the entire hybrid cloud setup. As HPE further transitions towards the as-a-service model, HPE GreenLake, as well as its advancements in edge networking and performance computing, could lead to greater market share in multiple segments of hybrid IT spend. HPE GreenLake As enterprise IT becomes increasingly hybrid – i.e. a mixture of on-premise and off-premise computing power – organizations have seen management of these systems become more siloed. As a result, companies are seeing greater demands on their IT staff, inconsistent user experiences or application performance, or lower visibility or risk control across networks. HPE GreenLake is a bundled-service offering that enables customers to select only the capabilities that they need and to deploy them faster, with less management, and at a lower CAPEX risk. Through its metering features, GreenLake makes it much easier for companies to scale computing resources up or down, thereby enhancing flexibility while also allowing IT teams to offload management of hybrid cloud resources to HPE’s operations center. Once customers sign up for HPE GreenLake, they select from 15 cloud services like machine learning, virtual machines, big data, networking, storage, or compute. HPE promises to have the chosen services delivered and operational within 14 days. And GreenLake runs on top of existing Amazon AWS or Microsoft Azure cloud computing environments, making the transition seamless. According to HPE, GreenLake reduces time-to-market for IT deployments by 75%, reduces CAPEX by 40% once in-use, and delivers 147% return on investment and total payback within 12 months. Improving deployment efficiencies not only conserves staffing resources and expands business productivity, it reduces the need for companies to invest in IT infrastructure before they are ready. Because HPE GreenLake is pay-per-use, customers can prevent overprovisioning of resources and eliminate expenses associated with technology refreshes, all the while ensuring adequate posture to accommodate usage spikes when on-premise compute is not sufficient. Customer satisfaction for GreenLake is extremely high, with HPE reporting 99% retention rate for contract customers currently subscribed to the platform. The Edge, Distributed Computing, and Remote Work Even though COVID-19 sparked some near-term challenges for enterprise hardware demand, the pandemic has also accelerated much longer-term trends related to computing and working – trends that should benefit HPE. As companies increasingly leverage computing power at the edge, and as work becomes more and more distributed and remote, the comprehensive end-to-end edge networking platform developed by HPE Aruba and recently-acquired Silver Peak could lead to share gains in multiple end markets projected to grow for the rest of the decade. According to Cisco, by 2025, 75 billion devices will be connected to the internet. Between the combination of IoT and the growing number of user devices consuming larger amounts of content digitally, the global datasphere is forecasted to roughly triple by then. And at that time 75% of enterprise-generated data is expected to be processed at the edge. In a widely distributed computing environment with exponentially greater data loads, it will become even more vital for IT purchasers to invest in and maintain the right set of networking tools to compete in the future. HPE Aruba HPE Aruba provides a range of wired and wireless data center and edge networking solutions, including Wi-Fi 5 and Wi-Fi 6 products, access points and gateways, as well as network switches for both data center and edge locations. Although HPE Aruba has pushed into SD-WAN, historically its business has been driven by WAN and WLAN hardware and services. A WAN, or wide-area network (WAN) is a collection of local-area networks (LANs) or other networks that communicate with one another. A WAN is essentially a network of networks (like a much smaller internet). WLAN is simply a wireless LAN that connects computers and network devices wirelessly. While the enterprise WLAN market actually fell 2.2% year over year in Q1 2020 due to COVID-19, WLAN is forecasted to grow at over 20% annually the next five years on the back of technology refreshes associated with the new Wi-Fi 6 standard (enterprise WLAN was a $1.3bn market in Q1) and increased adoption of Internet-of-Things (IoT) devices. And HPE Aruba is currently the #2 leader in market share at 14.4% after Cisco at 45.7%. Perhaps where HPE Aruba is set to deliver the strongest results over the long-term, though, is in its newly announced edge networking architecture called the Edge Services Platform (ESP). Aruba ESP is the industry’s first AI-powered platform designed to unify, automate, and secure edge networking. Aruba ESP leverages artificial intelligence to simplify IT operations management as well as accelerate and automate troubleshooting in distributed IT environments. With built-in Zero Trust Security, ESP secures all access across your network. And the platform also provides unified infrastructure so that WLAN, LAN, and SD-WAN resources can be singularly monitored and optimized across branch, campus, remote, and data center locations. This is important because the promise of the edge is in the ability to more rapidly acquire real-time data so that it can be more quickly analyzed and acted upon. By deploying integrated networking and analytics at the edge, Aruba ESP can enable businesses to optimize process efficiency, boost security, and increase reliability. This capability removes the previous need to send data to a remote data center location or third-party company for analytics. Silver Peak HPE’s acquisition of Silver Peak is a great strategic investment to further build out its integrated edge product portfolio. With the strength of HPE Aruba in WAN/WLAN, HPE will soon be able to offer market-leading SD-WAN solutions alongside its AI-powered intelligent edge platform, making for a very compelling and comprehensive product suite for enterprise customers. SD-WAN, or software-define WAN, uses software to replicate (virtualize) functionalities that traditionally were housed within hardware. What this allows for is functions to then be remotely monitored and controlled. It makes network management simpler, bolsters security, and enables much more efficient network routing. Despite being one of the few remaining independent SD-WAN players, Silver Peak has carved out a spot near the top of the market. The company counts over 1,500 customer deployments for its Unity EdgeConnect™ SD-WAN edge platform, and Silver Peak is consistently among the five largest vendors with over 7% market share in a field that includes heavyweights such as Cisco and VMware. The SD-WAN sector hit $1.9bn in 2019, but industry estimates expect it to reach $8bn by 2025 – delivering compounded annual growth of nearly 35%. Having been named by Gartner as one of two leaders (alongside Cisco) in its SD-WAN magic quadrant for two consecutive years, a combined HPE Aruba-Silver Peak solution is primed to capture even more market share for enterprise customers would like to pursue a multi-vendor strategy or diversify away from over-reliance on Cisco. The Path to Gaining Share in Computing Composable Infrastructure HPE’s software-define infrastructure innovations extend to computing as well, namely with HPE Synergy which started shipping in early 2017. HPE Synergy is a new category of computing infrastructure designed to bridge non-cloud-native and cloud‐native applications. Non-cloud-native applications are applications that exist with persistent storage and usually have a fixed number of network connections. This contrasts with cloud-native applications which are designed for a cloud environment. As much as services are being shifted to the cloud, for some companies, applications have existed in non-native states for so long that it could be risky and costly to move to the cloud or could require significant time and resource planning. This is where composable infrastructure and HPE Synergy steps in. Composable infrastructure treats compute, storage, and network devices as pools of resources that can be tactically provisioned as needed depending on the requirements of distinct workloads. It can be instantly flexed to meet the needs of any application or any workload, and it is ideal for a hybrid cloud environment. DellEMC released its version of a modular composable server halfway through 2018, and a startup named Liqid is also in the space. Past studies have put average server utilization rates between 15-35% because typical server designs have fixed amount of resources provisioned against disparate application needs. In a study commissioned by HPE, enterprise data center respondents reported that only 45% of infrastructure was provisioned most of the time, leaving over half of a company’s valuable computing resources unused. Although converged and hyperconverged infrastructure also combine computing, networking, and storage, only composable infrastructure is not preconfigured for specific workloads. On top of that, composable is more scalable than hyperconverged which can be limited to 20-30 nodes. HPE Synergy thus greatly reduces dedicated IT staff time to deploy servers or install firmware, increases productivity, and lowers procurement and operating costs. HPE Synergy is estimated to deliver three-to-one return-on-investment for IT customers over a five-year period. With composable infrastructure projected to follow hyperconverged systems and hit nearly $5bn in sales by 2023, Synergy could provide HPE yet another competitive product advantage to carve out share in a healthier IT hardware procurement environment. HPE Cray Supercomputers and Big Data In addition to traditional IT infrastructure, product advancements in high performance computing also have HPE positioned to gain new customer wins and develop the reporting segment into a larger contributor to the top line over time. Although the term supercomputing has been around for a few years, for many it continues to be an abstract or futuristic concept without tangible applications for today. But as tens of billions of internet-connected machines come online over the next decade, the amount of structured and unstructured data being generated will become that much harder to translate into valuable or actionable insights. That is why supercomputing can play a major role in solving the most data-intensive challenges facing corporations and governments worldwide. The US and China have been engaged in heavy competition in recent years to create faster and faster supercomputers, and other countries like Japan are also starting to get involved. Currently supercomputers are used in the fields of life sciences, genomics, manufacturing, weather, and nuclear science. However, in the age of IoT and zettabyte-scale datasets, much more powerful computers will be necessary to fully take advantage of big data analytics and artificial intelligent capabilities. The fastest exascale-class supercomputer in the world today is an HPE Cray supercomputer named El Capitan. The system, which will be delivered to the US Department of Energy’s Lawrence Livermore National Laboratory by 2023, is 10x faster than the runner-up. This market is still extremely nascent, and supercomputing is only a portion of the 9% of HPE revenues generated by the High Performance Compute & Mission Critical Systems (HPC MCS) segment’s. But as the market becomes more mature, HPE GreenLake will provide a stronger ability to cross-sell supercomputing products to very large-scale organizations – a major advantage for HPE Cray compared to when it was a standalone company. Conclusion Recent weakness in HPE shares following Q2 earnings have largely priced-in near-term risks associated with COVID-induced demand pressures for enterprise hardware solutions. With shares down 41% YTD, the company is trading at 6.63X forward earnings and 0.44x sales. These multiples are both among the lowest levels relative to other large cap IT hardware peers such as Dell (10.99 forward P/E), Cisco (13.81 forward P/E), or IBM (11.16 forward P/E). Despite difficulty formulating an effective cloud strategy in the years following the split from HP, HPE has multiple growth drivers with exposure to critical long-term computing, networking, and working trends. As HPE further develops its business into a fully service-based, pay-per-use model, revenue and earnings should become increasingly stable and less subject to near-term demand shocks as has been seen so far in 2020. Although management’s cost saving plan announced in May was poorly received by the markets, strong sales visibility by virtue of the $1.5bn quarterly contract backlog means that HPE’s struggles will likely be short-term. Combined with cost reductions, as enterprise hardware spending picks back up, the company should experience gross margin improvements, earnings growth, and multiple expansion. Together with the more targeted approach as an edge-to-cloud infrastructure service provider, HPE currently presents one of the best values in large cap tech for investors looking to gain exposure to edge networking, distributed computing, and remote working trends over the next 5-10 years. You can find me on Twitter@BlackjacketCowhere I write about emerging technologies and long-term market trends. Thanks for reading!
BitMax – “BTMX & HT & BNB 10x Margin Trading” Like many popular crypto asset exchanges, BitMax offers margin trading where users can use loans to increase their leverage on investments. BitMax’s margin trading options are limited to more established coins, and tokens, and each crypto asset has different maximum leverage and interest rates: Margin trading refers to the practice of using borrowed funds from a broker to trade a financial asset, which forms the collateral for the loan from the broker. The benefits of margin. When margin is used for investing purposes, it can magnify your profits, but it can also magnify your losses. Here’s a hypothetical example that demonstrates the upside; for simplicity, we’ll ignore trading fees and taxes. Assume you spend $5,000 cash to buy 100 shares of a $50 stock. Options trading is already complex enough but when you start looking at margin trading with options you are adding a whole new dynamic to it. However, once you have a solid understanding on how options work with margin then you will be in a position to execute strategies that have a statistical advantage like credit spreads and selling calls and puts. Margin is expressed as the percentage of the full amount of the position. For example, if the margin requirement is 10% (i.e. leverage of 1:10) and you open a position of $10,000, the amount you will need to deposit is $1000. The amount of money available in your account to open new positions with is the free margin.
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