OnceDear
OnceDear
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October 7th, 2019 at 12:51:51 PM permalink
Quote: MaxPen

Who is going to buy what they are selling? Can their kids afford to buy them out?
...
I'm pretty sure they are not going to be able to do it.


And not inclined to even if they could.
Quote:

I have a feeling the next 20-40 years is not going to be as reliable as the past.

Totally agree. Maybe even the next 5 or 10 will see conventional wisdom on it's head.
Psalm 25:16 Turn to me and be gracious to me, for I am lonely and afflicted. Proverbs 18:2 A fool finds no satisfaction in trying to understand, for he would rather express his own opinion.
Zcore13
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October 7th, 2019 at 1:54:19 PM permalink
Quote: OnceDear

And not inclined to even if they could.
Totally agree. Maybe even the next 5 or 10 will see conventional wisdom on it's head.



Then I'll be buying and buying the biggest and best at low prices.

Hoping the housing market crashes again too.


ZCore13
I am an employee of a Casino. Former Table Games Director,, current Pit Supervisor. All the personal opinions I post are my own and do not represent the opinions of the Casino or Tribe that I work for.
vegas
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October 7th, 2019 at 2:17:42 PM permalink
Quote: AxelWolf

Why?



Canadian government has been hard on oil companies and especially pipelines. The Trans Mountain Pipeline issue has been a thorn in the side for Alberta who needs it to ship oil to the west coast. They have had a hard time transporting it and have had to resort to using rail cars at a high cost. (It would take too long to go into Trans Mountain so will leave it there) Canadian oil comes mostly from the tar sands and as such it is heavy oil that takes a much more processing for it to be come usable. This takes time and of course money. For companies to sell oil they need to sell it competitively with other countries especially Saudi Arabia who sell it cheap due to much cheaper processing cost. All this means companies in Canada work on much smaller margins and profits.

So the price of oil plays a big part and with oil less than 55 dollars a barrel these companies do not make much profit. Hence people are nervous about buying stocks in these companies UNTIL oil increases in value. However oil will increase in value and experts expect this to happen in mid to late 2020.

They are giving these stocks away at these prices but still big investors are nervous and want to see an an increase in price before they step in. I have holdings in 5 energy stocks right now. I bought them super cheap and sit back and collect the big dividends while I wait. There is no way oil stays this low and when it starts to rise these stocks will benefit when the big guys start to buy. It will happen but you have to be patient in the short term.
50-50-90 Rule: Anytime you have a 50-50 chance of getting something right, there is a 90% probability you'll get it wrong
AxelWolf
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October 7th, 2019 at 2:45:30 PM permalink
Quote: vegas

Canadian government has been hard on oil companies and especially pipelines. The Trans Mountain Pipeline issue has been a thorn in the side for Alberta who needs it to ship oil to the west coast. They have had a hard time transporting it and have had to resort to using rail cars at a high cost. (It would take too long to go into Trans Mountain so will leave it there) Canadian oil comes mostly from the tar sands and as such it is heavy oil that takes a much more processing for it to be come usable. This takes time and of course money. For companies to sell oil they need to sell it competitively with other countries especially Saudi Arabia who sell it cheap due to much cheaper processing cost. All this means companies in Canada work on much smaller margins and profits.

So the price of oil plays a big part and with oil less than 55 dollars a barrel these companies do not make much profit. Hence people are nervous about buying stocks in these companies UNTIL oil increases in value. However oil will increase in value and experts expect this to happen in mid to late 2020.

They are giving these stocks away at these prices but still big investors are nervous and want to see an an increase in price before they step in. I have holdings in 5 energy stocks right now. I bought them super cheap and sit back and collect the big dividends while I wait. There is no way oil stays this low and when it starts to rise these stocks will benefit when the big guys start to buy. It will happen but you have to be patient in the short term.

Zenking was touting some oil company stocks a few month's back when I talked to him.
♪♪Now you swear and kick and beg us That you're not a gamblin' man Then you find you're back in Vegas With a handle in your hand♪♪ Your black cards can make you money So you hide them when you're able In the land of casinos and money You must put them on the table♪♪ You go back Jack do it again roulette wheels turinin' 'round and 'round♪♪ You go back Jack do it again♪♪
ChumpChange
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October 7th, 2019 at 4:09:33 PM permalink
Here's a hot stock tip: Power companies are on alert to be shutting off the power across California on Wednesday & Thursday due to high winds. So don't do any trades during the blackouts.
AxelWolf
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October 7th, 2019 at 6:00:40 PM permalink
Quote: ChumpChange

Here's a hot stock tip: Power companies are on alert to be shutting off the power across California on Wednesday & Thursday due to high winds. So don't do any trades during the blackouts.

I take it this is in high-risk areas to help prevent Powerline fires?
♪♪Now you swear and kick and beg us That you're not a gamblin' man Then you find you're back in Vegas With a handle in your hand♪♪ Your black cards can make you money So you hide them when you're able In the land of casinos and money You must put them on the table♪♪ You go back Jack do it again roulette wheels turinin' 'round and 'round♪♪ You go back Jack do it again♪♪
ChumpChange
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October 7th, 2019 at 6:04:52 PM permalink
It's unknown how many millions of people will find themselves in the dark for 24 hours or more. PG&E owes $13 billion in damages already.
SOOPOO
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October 10th, 2019 at 4:41:24 AM permalink
Quote: ChumpChange

It's unknown how many millions of people will find themselves in the dark for 24 hours or more. PG&E owes $13 billion in damages already.



Who would intentionally live in California? Windy day means I have no electricity?

I'm embarrassed that I don't have a standby generator.
MaxPen
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October 10th, 2019 at 6:35:23 AM permalink
Quote: ChumpChange

It's unknown how many millions of people will find themselves in the dark for 24 hours or more. PG&E owes $13 billion in damages already.



America's first 3rd world state. They sure are progressive, alright😂
aruzin
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October 10th, 2019 at 7:46:02 AM permalink
Certain people in stock markets always do well, and far better than the average Joe, specially the so called professionals, and do you know why !? Hint: Insider trading and knowledge.... (a bit like AP in casino...!)

Yes, that maybe illegal and all that, but if you think it does not go on, you will be naive. I know a little about it as part of what I used to do, do you ever wonder why the CEOs CFOs and fund managers have so many lunches in expensive restaurants every other day - they don't just talk about were they got their suits made or where they went for holidays last year ... !!!
Paradigm
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October 10th, 2019 at 9:11:54 AM permalink
Quote: MaxPen

The questions people need to answer soon is. What happens next as the boomers retire and want their money? Who is going to buy what they are selling? Can their kids afford to buy them out?


What are the Boomers with accumulated wealth going to be "selling"? They don't need to liquidate anything to maintain their lifestyles. They will live in their debt free houses and continue to pull 5-6% off their portfolios each year to do what they want in retirement. There isn't some big sale of real estate & equities that is about to happen because Boomers don't need it to happen to fund their lifestyles.

8% rates of return over long periods of time are very attractive, even after inflation. In 1989 an average CPI item that cost $1, cost $2.07 today...up 107%. A dollar invested 30 years ago generating an 8% annual rate of return is worth $10.06. There is no loss of purchasing power due to inflation when your rate of return is beating inflation.
billryan
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October 10th, 2019 at 12:38:09 PM permalink
Quote: SOOPOO

Who would intentionally live in California? Windy day means I have no electricity?

I'm embarrassed that I don't have a standby generator.



Lose power for a few days and suddenly the idea of dropping a few grand on a home generator doesn't seem so crazy.
The difference between fiction and reality is that fiction is supposed to make sense.
Ajaxx
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October 10th, 2019 at 4:02:03 PM permalink
Quote: vegas

Canadian government has been hard on oil companies and especially pipelines. The Trans Mountain Pipeline issue has been a thorn in the side for Alberta who needs it to ship oil to the west coast. They have had a hard time transporting it and have had to resort to using rail cars at a high cost. (It would take too long to go into Trans Mountain so will leave it there) Canadian oil comes mostly from the tar sands and as such it is heavy oil that takes a much more processing for it to be come usable. This takes time and of course money. For companies to sell oil they need to sell it competitively with other countries especially Saudi Arabia who sell it cheap due to much cheaper processing cost. All this means companies in Canada work on much smaller margins and profits.



It sounds like you have done some solid strategizing on the profitability of these positions, and they may very well turn out to beat the market, so well done there. That said, I have to bring up the fact that maximized returns are not the only factor to consider when deciding where to put your money. The size and anonymity of the stock market make it easy to forget that holding a stock or bond is in a very real sense becoming a part-owner of or lender to a company, and in the process giving that company more capital and power to expand its operations. It's voting with your dollar.

If someone found a regulatory loophole that allowed them to dump toxic waste in a small town's reservoir, and offered us a 50% stake in a perfectly legal venture that's returning 25% a year exploiting that loophole, I would hope (and I'll be the first to admit it'd be tempting) that all of us would turn that down on principle. It's a little harder to do the right thing if someone offers you a 10% stake, because the company will likely expand and profit with or without you, which means you'll feel less personal responsibility if you do buy in and more FOMO if you don't. But if you thought it was unethical at 50%, it's hard to make a philosophically-consistent argument that there's some percentage below which it becomes okay (assuming you believe in voting in elections, or refraining from littering, or not stealing small items from supermarkets, or anything else that involves large-scale collective action).

I know that oil companies are more complex than that over-simplified example, but the business model is still to create a net-good for a few (the investors) at the expense of a net-bad for everyone else (the planet). These are not local companies providing a service to local people who otherwise would be left without fuel and with a significantly lower quality of life. They are just adding supply to a competitive global market, which means their growth translates into more fossil fuels burned. If their balance sheet is currently anemic, that is a good thing, and we should divest and hope it stays that way.

Luckily, even if you put profits first, there's a ton of evidence that ESG integration (incorporating environmental, social, and governance concerns) often means lower risk and higher returns, which should make sense; like it or not, the world is becoming more environmentally and socially conscious, so it's basically just betting the long-term trend. For example, the 2018 US SIF Report on US Sustainable, Responsible and Impact Investing Trends gives a 13.6% compound annual growth rate as a class for SRI (socially responsible investing). That may be part of why the "big guys" (who, as much as we may not like it, have a lot more data and market expertise than we do) aren't buying these discount oil stocks right now. If you're looking for alternative exposure in the energy sector, check out CRBN — +15.19% year-to-date.
Last edited by: Ajaxx on Oct 10, 2019
"Not only [does] God play dice... he sometimes confuses us by throwing them where they can't be seen." ~ Stephen Hawking
Calder
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October 10th, 2019 at 4:15:52 PM permalink
Quote: Ajaxx

...I know that oil companies are more complex than that over-simplified example, but the business model is still to create a net-good for a few (the investors) at the expense of a net-bad for everyone else (the planet)...


Yes, that's exactly what it said in my most recent XOM annual report (in code, of course).
Ajaxx
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October 10th, 2019 at 4:32:54 PM permalink
Quote: Calder

Yes, that's exactly what it said in my most recent XOM annual report (in code, of course).



Must have been some creative stats in that report; Exxon's been anything but good for investors lately. It's -19% for the last 3 years, -16% last 52-weeks.
"Not only [does] God play dice... he sometimes confuses us by throwing them where they can't be seen." ~ Stephen Hawking
unJon
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October 10th, 2019 at 6:19:55 PM permalink
Want to be on record to say that Ajaxx is batting 1.000 so far on post quality. Even if you don’t agree with his positions it is a pleasure to read his posts.
The race is not always to the swift, nor the battle to the strong; but that is the way to bet.
vegas
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October 10th, 2019 at 6:28:39 PM permalink
Quote: Ajaxx

It sounds like you have done some solid strategizing on the profitability of these positions, and they may very well turn out to beat the market, so well done there. That said, I have to bring up the fact that maximized returns are not the only factor to consider when deciding where to put your money. The size and anonymity of the stock market make it easy to forget that holding a stock or bond is in a very real sense becoming a part-owner of or lender to a company, and in the process giving that company more capital and power to expand its operations. It's voting with your dollar.

If someone found a regulatory loophole that allowed them to dump toxic waste in a small town's reservoir, and offered us a 50% stake in a perfectly legal venture that's returning 25% a year exploiting that loophole, I would hope (and I'll be the first to admit it'd be tempting) that all of us would turn that down on principle. It's a little harder to do the right thing if someone offers you a 10% stake, because the company will likely expand and profit with or without you, which means you'll feel less personal responsibility if you do buy in and more FOMO if you don't. But if you thought it was unethical at 50%, it's hard to make a philosophically-consistent argument that there's some percentage below which it becomes okay (assuming you believe that you believe in voting in elections, or refraining from littering, or not stealing small items from supermarkets, or anything else that involves large-scale collective action).

I know that oil companies are more complex than that over-simplified example, but the business model is still to create a net-good for a few (the investors) at the expense of a net-bad for everyone else (the planet). These are not local companies providing a service to local people who otherwise would be left without fuel and with a significantly lower quality of life. They are just adding supply to a competitive global market, which means their growth translates into more fossil fuels burned. If their balance sheet is currently anemic, that is a good thing, and we should divest and hope it stays that way.

Luckily, even if you put profits first, there's a ton of evidence that ESG integration (incorporating environmental, social, and governance concerns) often means lower risk and higher returns, which should make sense; like it or not, the world is becoming more environmentally and socially conscious, so it's basically just betting the long-term trend. For example, the 2018 US SIF Report on US Sustainable, Responsible and Impact Investing Trends gives a 13.6% compound annual growth rate as a class for SRI (socially responsible investing). That may be part of why the "big guys" (who, as much as we may not like it, have a lot more data and market expertise than we do) aren't buying these discount oil stocks right now. If you're looking for alternative exposure in the energy sector, check out CRBN — +15.19% year-to-date.





Well said and you make some excellent points. The long term for automobiles is getting away from gas but this will be a long slow process but something to consider none the less. Oil price will increase in the coming years and that will give a needed short term boost for stocks. Many companies are buying back their own shares at huge discounts. Most are way under water right now but they are looking down the road.

You can't time the market but many try. Now until the end of this year is going to see energy drop even further as I believe oil will drop some more and then the huge sell off for tax purposes happens. Happens every year as people want to sell their big losers. Beat up stocks drop even lower. It is also a buying opportunity for those willing to take a chance.

Then next will come the downturn in North America.....but that is another topic.
50-50-90 Rule: Anytime you have a 50-50 chance of getting something right, there is a 90% probability you'll get it wrong
Ajaxx
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October 10th, 2019 at 9:30:02 PM permalink
Quote: vegas

You can't time the market but many try. Now until the end of this year is going to see energy drop even further as I believe oil will drop some more and then the huge sell off for tax purposes happens. Happens every year as people want to sell their big losers. Beat up stocks drop even lower. It is also a buying opportunity for those willing to take a chance.

Then next will come the downturn in North America.....but that is another topic.

I agree — timing the market is a lot more difficult than people usually think. That said, it sounds like you still have some predictions, specifically that these energy stocks may go even further down before they go up. If you think that's likely, are you planning on selling or even shorting the 5 stocks you own? You mentioned liking the dividends in your original post, but I'm sure you can find stocks that pay decent dividends and that you expect to go up in value. Or, if you really think the dividends are better than what's already priced-in to those stock prices, you could just buy those stocks the day before the ex-dividend date and then jump right back off the sinking ship.

I ask not to give you a hard time. It's just I know (from having done this myself) how tempting and potentially dangerous it is, the idea of finding the diamond in the rough — that one stock that everyone overlooked, including those stuck-up-Wall-Street-too-big-to-fails-that-possibly-screwed-you-in-2009. You buy it at the absolute bottom, and then you start imagining the price doubling — which doesn't seem too much to ask when it's only at $2.38 — and how good it would feel to be up 100% and have your theories validated and feel smart, and before you know it you're hoping with your heart instead of thinking with your head. The cold truth is that there is no such thing as overlooked stocks anymore. There's a finite number of publicly traded companies — half a million worldwide, less than 10,000 total in the U.S. and Canada — and firms like Goldman Sachs have the resources and data to train a machine-learning algorithm for every single one and create a custom model that gets updated every fifteen seconds. If Canadian energy stocks aren't selling, it's because someone with more information than we could possibly dream of doesn't think they should be. The internet is full of people with stories about how they saw something "obvious" and capitalized and crushed the market, but such is the nature of randomness — it'd be weird if there weren't some subset of speculators that got lucky, just as it'd be weird if 10 players at a roulette wheel were all down exactly -5.26% after an hour. That doesn't make it a +EV play to try your luck.

I know it's boring, but I agree with many of the posters earlier in this thread: for those of us that don't have access to an army of quants and unlimited computing power, it's hard to make an argument for doing anything besides buying a low-expense, well-diversified index fund (preferably one like SPYX [+18.91% year-to-date] that excludes unethical corporations). If you are going to look for discount stocks, though, I would urge you to at least limit your search to socially-responsible companies, so you don't find yourself in the uncomfortable position of giving money to and rooting for what National Geographic called "the world's most destructive oil operation." Also, if you really think a security is due for an upswing, there's no need to actually hold a position while you wait — it's usually much better to set an alert or trail stop order and hop on once it's started to climb a bit than to aim for buying something at rock bottom, when there's a decent chance that whatever pushed it down that far is still going on.
Last edited by: Ajaxx on Oct 10, 2019
"Not only [does] God play dice... he sometimes confuses us by throwing them where they can't be seen." ~ Stephen Hawking
jorgea
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October 23rd, 2019 at 3:43:41 PM permalink
The stock market is a gamble in most cases.
Ace2
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October 23rd, 2019 at 4:55:32 PM permalink
Quote: MaxPen


Let's use 20 years. I think the DOW closed around 11k in 1999. Today it's like 27k. So you got 2.5x during that period. But had you been in Gold which closed at 290 or so and is 1500 today you would have a 5x gain over the same period.
.


The 11k Dow base is the very top of a cycle (up 10x from 1980 and culminating with the dot-com frenzy). From that top, 2.5x isn’t great but not bad (about 6.5 % pa with dividends). The ride is never straight up, but over the the long term it is unquestionably up.

For an equal comparison, let’s also measure gold from its 1980 top of $1000. 20 years later it was down 70% at $300, now it’s at $1500, for a 40-year nominal return of 1% (after inflation about negative 4% !!!). Over the same 40 year period, $1000 invested the Dow would now be worth $27,000, before dividends...$55,000 with 2% dividends reinvested. So since 1980 the Dow outperformed gold by 3600 %.

Gold pays no dividends since it’s not even an investment...assets generate income, and they are valued by their earnings potential. Gold has no earnings so it’s simply worth what the next sucker will pay for it.

You cannot compare the Dow, which is an investment in the US/Global economy to gold, which is at best “a store of value used during ancient times”

All asset classes (stocks, real estate) are long term when it comes to capital gains. And “long term” might be as long as 25 years, though you’d have to be very unlucky t to have to wait that long, like you invest everything (which you should never do anyway) in the Dow in 1929.
Last edited by: Ace2 on Oct 23, 2019
It’s all about making that GTA
MaxPen
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October 23rd, 2019 at 5:32:59 PM permalink
Quote: Ace2

The 11k Dow base is the very top of a cycle (up 10x from 1980 and culminating with the dot-com frenzy). From that top, 2.5x isn’t great but not bad (about 6.5 % pa with dividends). The ride is never straight up, but over the the long term it is unquestionably up.

For an equal comparison, let’s also measure gold from its 1980 top of $1000. 20 years later it was down 70% at $300, now it’s at $1500, for a 40-year nominal return of 1% (after inflation about negative 4% !!!). Over the same 40 year period, $1000 invested the Dow would now be worth $27,000, before dividends...$55,000 with 2% dividends reinvested. So since 1980 the Dow outperformed gold by 3600 %.

Gold pays no dividends since it’s not even an investment...assets generate income, and they are valued by their earnings potential. Gold has no earnings so it’s simply worth what the next sucker will pay for it.

You cannot compare the Dow, which is an investment in the US/Global economy to gold, which is at best “a store of value used during ancient times”

All asset classes (stocks, real estate) are long term when it comes to capital gains. And “long term” might be as long as 25 years, though you’d have to be very unlucky t to have to wait that long, like you invest everything (which you should never do anyway) in the Dow in 1929.



Nothing you said is incorrect. It does fall in line with the mantra of the day. Couple things though;

I do find it curious as to how you use a 40 year time frame to make a point but then say things usually work out in 25 years.

Why are modern central banks so interested in ancient stores of value?

With P/E ratios about 3x what they were in 1980 what is driving today's prices for equities?

Do you think the creation of the mutual fund market created in the 80's has been a factor in driving equity markets?

With the continuous creation of debt, which is today's money, wouldn't the price of everything be "unquestionably up"?
Last edited by: MaxPen on Oct 23, 2019
Ace2
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October 23rd, 2019 at 7:04:51 PM permalink
You don’t have to look at 40 years, instead look at decades. The Dow cumulative return with dividends (assume 2%) was:

1980s: 260%
1990s: 340%
2000s: 20%
2010s: 190%

Multiply that out and it’s a 5400% total gain.

I’ll agree that gold is probably worth more than currency, since currency always ends up being worth nothing. So tying a currency to gold is better than nothing.

No use for traditional mutual funds. SPY cost 10 bps or less and beats all of them.

The PE ratio around 1980 was probably less than half of the long term average. I believe that was primarily due to sky-high interest rates which severely discounted the value of future earnings.
It’s all about making that GTA
Lovecomps
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October 25th, 2019 at 10:08:57 AM permalink
I have been a day trader for almost 22 years and there are reasons why (80%-95%, depending on the survey that you're reading) why people fail and a lot of them can be carried over to Las Vegas. It can be made into +EV but, for example:

Many people are underfunded to do it to the point where it can provide a living. This is akin to sitting down at a $25 blackjack table with just a C note and expecting to survive.

Most people don't do their research. Think of playing any game without knowing the rules.

Greed...trying to make it all very quickly by taking single posistion a with a large portion of their capital, or putting what the have left in one posistion. Have you ever seen a person hit a bad street and put what they have left on a hardways bet or a single number on the wheel and pray?

Last of all, people try the trading version of the Martingdale system. The stock went down today, so it should be up today. You might get away for a bit but in the end it'll eat you alive.

Why have I survived for so long if it's a negative "game." Well, first of all I don't treat it like a game. 2% max in any one posistion. I have my ways of doing research but also arrange posistion that aren't systems are they are just ways of have a cap on losses. Not buying naked options, or using call spreads would be examples of this.

For what it's worth, I've also been on the wrong side of a trade more times than I could ever count. Sometimes you're just plain wrong or, sometimes, a little luck bad comes in. The best example is taking a posistion and then, the next day, some know-nothing analyst says something contrary to your posistion.

Last of all, don't confuse what I do with investing. Investing would be the equivillant of buying the WYNN, for example, and holding on.

It's +EV.
The best things in life are not free.
Ajaxx
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October 25th, 2019 at 5:23:41 PM permalink
Quote: Lovecomps

Why have I survived for so long if it's a negative "game." Well, first of all I don't treat it like a game. 2% max in any one posistion. I have my ways of doing research but also arrange position that aren't systems are they are just ways of have a cap on losses. Not buying naked options, or using call spreads would be examples of this.

I would love to get your thoughts on a few questions, as I am really curious about whether it's worth the time to learn day trading and have never been able to ask a day trader who's stuck with it for as long as you have:

  • How much do you base your decisions on fundamental vs. technical analysis?
  • Do you use a Level II screen? Why or why not?
  • Over the whole of your career, are you able to beat the returns from diversified index funds like SPY, and if so by how much?
  • Over the whole of your career, are you able to beat returns you'd get from non-securities investments, like buying a home and renting it out, and if so by how much?
  • To what extent do you incorporate socially-responsible investing principles or ethical considerations into the positions you take?


Thanks in advance for your insights!
"Not only [does] God play dice... he sometimes confuses us by throwing them where they can't be seen." ~ Stephen Hawking
TigerWu
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October 26th, 2019 at 8:21:01 AM permalink
Quote: Ace2


I’ll agree that gold is probably worth more than currency, since currency always ends up being worth nothing. So tying a currency to gold is better than nothing.



Much like fiat currency, though, gold is only worth something because we all agree it is.

Quote: SOOPOO

Who would intentionally live in California?



Living in California is by no means near the top of my list but it is even farther from the bottom.
Lovecomps
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October 26th, 2019 at 3:08:13 PM permalink
Quote: Ajaxx

I would love to get your thoughts on a few questions, as I am really curious about whether it's worth the time to learn day trading and have never been able to ask a day trader who's stuck with it for as long as you have:

  • How much do you base your decisions on fundamental vs. technical analysis?
  • Do you use a Level II screen? Why or why not?
  • Over the whole of your career, are you able to beat the returns from diversified index funds like SPY, and if so by how much?
  • Over the whole of your career, are you able to beat returns you'd get from non-securities investments, like buying a home and renting it out, and if so by how much?
  • To what extent do you incorporate socially-responsible investing principles or ethical considerations into the positions you take?


Thanks in advance for your insights!



Well let me help you out. I've never been much of a fan of technical analysis. Most of what I do deals with options, not stocks themselves. I've evolved over the years and rather than just buying the option and hoping that I'm right I've become a swing trader and mostly sell the options and collect the time value from the buyer (spreads, covered calls, and other methods). Doing that, the most important Greek to me is the Delta.

I still am a traditional trader, but I rarely use either technical or fundamental analysis. I stick with common sense. For example, and pardon the politics, when President Trump started the whole tariff thing with China my first thought was "Wynn, MGM, etc. get more money from Macau than the do from Vegas." I bought a bunch of WYNN puts. Check out what has happened to the stock starting around August to the present. Another example, again not to be political, but, after President Bush was elected I thought that, with the former CEO of Haliburton as his VP, isn't he going to feed a lot of contracts to his old cronies? That was a buy and hold, granted..but just more common sense.

Do I beat SPY? We'll that's a mixed question. I trade for income but my long term holdings have good years and bad. As for non-security investments, like real estate, the answer is that I don't do it. I know what I'm good at and stick with it. My only real estate is my own home. I don't trade commodities because, unlike stock, I have no use for the end product rather than being an airline that's hedging the price of oil and whatnot. On the other hand, once in awhile, I won't take a score but will buy the stock instead.

I buy or sell stocks and options based on income opportunity. I couldn't care less if they are socially responsible or not.

Two things worth noting if you're curious about doing it. Even though you can read and there are set-ups with every brokerage, don't paper trade. It's just not the same and you can't judge your character and whether or not you have the stomach or personality for it when you can lose 50K and then get it back by hitting a reset button.

Second, despite the sayings of fear vs. greed, neither will be your undoing. The true answer is pride. If you screw up, get screwed over by some outside event, or are just plain wrong own up to it and get out. Tomorrow is another day. I'd be richer that Jeff Bezos if I'd always been right but I've been on the wrong side so many times that I stopped counting years ago. I just can do the gut check and own up to it.

As a final aside, one thing I've never done is sell naked options. Look up what it means if you like. Low, but almost guaranteed returns but one bad event can wipe out years of trades

P.S., and this is a personal feeling, never get involved in metals like silver or gold for either trading or holding. Never have, and never will.
The best things in life are not free.
Ajaxx
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October 26th, 2019 at 9:20:54 PM permalink
Quote: Lovecomps

... I still am a traditional trader, but I rarely use either technical or fundamental analysis. I stick with common sense. For example, and pardon the politics, when President Trump started the whole tariff thing with China my first thought was "Wynn, MGM, etc. get more money from Macau than the do from Vegas." I bought a bunch of WYNN puts. Check out what has happened to the stock starting around August to the present. Another example, again not to be political, but, after President Bush was elected I thought that, with the former CEO of Haliburton as his VP, isn't he going to feed a lot of contracts to his old cronies? That was a buy and hold, granted..but just more common sense.


Thanks so much for taking the time to answer some of my questions. The common sense you outlined above seems solid to me, but I'm curious how narrow the window of time is to take positions in response to current events before the news is priced into the market. Wouldn't developments as highly public as an escalation of the Chinese trade war or the election of a president lead to an almost immediate shift in the price of affected securities like Wynn or Halliburton? The market isn't psychic of course, so that first shift will always end up being an under- or an over-correction to some extent, but I am never confident that with my limited knowledge I'll be able to tell one from the other with enough consistency to have an edge in the long-term.

Quote: Lovecomps

As a final aside, one thing I've never done is sell naked options. Look up what it means if you like. Low, but almost guaranteed returns but one bad event can wipe out years of trades


Selling something you don't actually have is indeed risky business.
Last edited by: Ajaxx on Oct 26, 2019
"Not only [does] God play dice... he sometimes confuses us by throwing them where they can't be seen." ~ Stephen Hawking
billryan
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October 26th, 2019 at 9:27:11 PM permalink
Nothing you described is day trading.
The difference between fiction and reality is that fiction is supposed to make sense.
Lovecomps
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October 27th, 2019 at 11:09:45 AM permalink
Quote: billryan

Nothing you described is day trading.



A lot of it is, but it's better referred to as swing trading. There's been plenty of momentum trading (either in the stock or the averages as a whole) ,and trades driven by an event- all in and out within a few hours and sometimes even minutes over my career. My methodology has just changed as I've gotten older and I was just trying to illustrate certain points. In those cases stocks are easier to trade than options because the spreads are much smaller. The biggest downside with that way (pure day trading) is all the extra money lost to commissions (they only just recently went away) over the years.

One of my real point is do you have the stomach for it? I must be doing something right after over two decades.
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MaxPen
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October 27th, 2019 at 11:18:17 AM permalink
Quote: Lovecomps

A lot of it is, but it's better referred to as swing trading. There's been plenty of momentum trading (either in the stock or the averages as a whole) ,and trades driven by an event- all in and out within a few hours and sometimes even minutes over my career. My methodology has just changed as I've gotten older and I was just trying to illustrate certain points. In those cases stocks are easier to trade than options because the spreads are much smaller. The biggest downside with that way (pure day trading) is all the extra money lost to commissions (they only just recently went away) over the years.

One of my real point is do you have the stomach for it? I must be doing something right after over two decades.



Why would you need a stomach for trading if you have an identifiable edge? Have you been gambling for 2 decades and still winning?
Lovecomps
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October 27th, 2019 at 11:24:28 AM permalink
Quote: Paradigm

What are the Boomers with accumulated wealth going to be "selling"? They don't need to liquidate anything to maintain their lifestyles. They will live in their debt free houses and continue to pull 5-6% off their portfolios each year to do what they want in retirement. There isn't some big sale of real estate & equities that is about to happen because Boomers don't need it to happen to fund their lifestyles.

8% rates of return over long periods of time are very attractive, even after inflation. In 1989 an average CPI item that cost $1, cost $2.07 today...up 107%. A dollar invested 30 years ago generating an 8% annual rate of return is worth $10.06. There is no loss of purchasing power due to inflation when your rate of return is beating inflation.



I have to disagree with you. The Boomers have been pissing away their money all their lives and using credit cards (25% APR or even higher) to finance thier lifestyles and don't have as much money (if any) or other assets accumulated as you might think. Some have enough money to live off of thier passive income, but most of them have been living beyond their means and are counting on Social Secruity. Why do you think that so many people are worried about the whole Social Security system running dry?

I won't even discuss how they will hurt even more because of inflation.

A great book that shows how only few people have gotten into the right situation is called "The Millionaire Next Door."
The best things in life are not free.
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