On February 11, 2021, Opendoor Technologies Inc. (NASDAQ: OPEN) reached a peak closing price of $35.88 per share. Fast forward to the recent market close on Thursday, and the stock is now trading at a mere $1.87, reflecting a staggering loss of over 94%.
Should you consider investing in it at this lower price?
If you are unfamiliar with Opendoor, it operates as an online iBuyer, specializing in the buying and selling of residential real estate. Utilizing its user-friendly platform, Opendoor offers immediate cash bids to property sellers, making the process seamless and efficient.
This approach allows homeowners to bypass the monotonous and often frustrating dealings typical of real estate agents. Sellers can avoid the inconvenience of hosting open houses, along with the discomfort of having curious neighbors and looky-loos walking through their meticulously arranged homes.
Essentially, using Opendoor to sell a house is as straightforward as auctioning off an old pair of jeans on eBay. In return for this ease of transaction, Opendoor charges a fee similar to what you’d expect from a traditional real estate commission. Continue reading
On Thursday, the Bureau of Labor Statistics revealed that consumer prices, indicated by the Consumer Price Index (CPI), experienced an annual inflation rate of 7.7 percent in October. This news sparked a frenzy of excitement among investors, who viewed it as a sign of relief in the otherwise pressing inflation narrative.
The stock market reacted with one of its most significant single-day rallies in history, with the S&P 500 soaring over 5.5% and the NASDAQ jumping more than 7.3%. Notably, the yield on the 10-Year Treasury note fell to 3.81%, marking its lowest level in over a month.
So, is soaring consumer price inflation no longer a worry? Has the storm passed? Can Jerome Powell afford to shift strategy?
Unlikely. More probable is that inflation will remain a persistent issue throughout the decade. Nonetheless, this is not the ideal moment to dive headfirst into the stock market. We will discuss the reasoning behind this shortly, but first, let’s delve deeper into consumer price inflation.
It’s essential to remember that consumer price inflation is a byproduct of an increased money supply. The Federal Reserve expanded its balance sheet, injecting around $5 trillion in digital currency—spawned from thin air—between September 2019 and April 2022. Continue reading
A large number of investors appear to be swimming in a sea of delusion. Following the Federal Reserve’s widely-anticipated rate hike of 75 basis points on Wednesday, major stock market indexes surged upward.
Optimistic investors latched onto the Federal Open Market Committee (FOMC) statement, especially a comment noting that the Fed, “will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation and economic and financial developments.”
This was somehow interpreted as an indication of a forthcoming policy shift. However, during the FOMC statement press conference, Powell clarified that it’s still “very premature to be thinking about pausing.”
As a result, stocks plummeted, with the Dow Jones Industrial Average (DJIA) closing down by 505 points.
Is a pivot or pause in the cards? This is the wrong question to concern ourselves with. The reality is that major stock market indexes have much further to fall before the bear market concludes, irrespective of any potential Fed pivot in the near future. Continue reading
“Some airlines, if you want six more inches between you and the seat in front, you pay more money but you don’t know it … these are junk fees, they’re unfair and they hit marginalized Americans the hardest, especially … people of color.”
– President Joe Biden, October 26, 2022
Fist Bump Agreements
President Joe Biden has stumbled yet again.
The nearly octogenarian believed he had brokered a secret arrangement back in July.
You might recall Biden’s fist bump with Saudi Crown Prince Mohammed bin Salman during that period. This non-binding accord aimed to increase oil production until at least December, post midterm elections.
By securing additional Saudi oil and tapping into the Strategic Petroleum Reserve—now down 32% year-to-date—Biden intended to deliver lower gas prices to American voters.
His strategy was to create a political cushion against a potentially disastrous midterm election for the Democratic Party. Quite the clever political maneuver, wouldn’t you agree?
Sadly, Biden has since awakened to find himself mired in the consequences of his own actions. Continue reading
