#noncrypto-investing (Discord ID: 352760194775777282) in MacGuyver - Skills & Academics, page 3
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In fact, there's probably multiple better ones
But I don't think Bitcoin will just crumble so quickly
I'm just making the case that people need to start thinking about selling Bitcoin. The thing about bubbles is that it's a huge game of hot potato. If you're not holding the potato, you're fine.
Should’ve fucking sold my BTC yesterday
It just plummeting 3,000 in an hour
oh no nigga
And the exchange is crashing
Buy low sell high
It plummets like this every week
Bitcoin cash is on Coinbase now
Fuck fuck fuckkkkk
This app is trash
Why is that bad?
LMAO Bitcoin "crashed" back to what it was a week ago
This happens so often and people flip out every time
I had my Bitcoin on an offline wallet during the fork. Still need to figure out how to get my Bitcoin Cash.
the sustainability is definitely a concern. It becomes a moral issue at that point. And caring about efficiency is a white people problem
Caring about efficiency is a societal problem. A currency will not be viable as such if it's not efficient, and the value will never transform from speculative into utilitarian
What's going on with this Bitcoin Cash stuff?
Look at the IE general chat.
I just spent the last hour explaining Bitcoin Cash.
I believe it is the future of crypto and bitcoin core will be replaced by bitcoin cash.
@Matthias There is no need for further forking. BCH solved the only issue with BTC.
You could fork BTC yourself, but no one would adopt it because it wouldn’t add any value.
@Tanner - SC Does BCH solve the efficiency issue? Or does it still require the power of Ireland to run?
f to btc
i can't imagine peoples loss on this pullback
@this_that5553 The "efficiency issue" is not an issue. BCH has the potential to replace VISA and PayPal and it uses FAR less manpower and energy than them.
People talk smack because they can estimate the total power consumption of the biticoin network, but they can't easily estimate the total resource consumption of any fiat payment processor.
No coiners btfo
@Tanner - SC you said yourself that visa manages 24k transactions per second. BCH does 48
BCH has a roadmap to scale. They started at 8 MB blocks to prove they won't cause collapse because many in the BTC community were convinced 8 MB would cause collapse. And it's an adjustable value in BCH, so the users at any time can increase the limit. And the developers have proposal for future updates to change the default adjustment from 8 to higher.
This is why Monero should be the default tbh
These n00bs are just finding out Coinbase is cucky. Coinbase has been banning people for years. It's somewhat understandable because Coinbase doesn't want any negative PR nor do they want any retroactive regulation to bite them in the ass for any lax actions of the past, so they clamp down. It's stupid easy to work around. Just send the coins from Coinbase to a private wallet, then send the coins on to wherever you please.
No one should be storing coins on coinbase anyway, that's just IOUs. Hold your crypto yourself.
Here's a good phone app for storing BTC and BCH:
I think I'll create a BCH wallet with that app
Might be annoying to send coinbase funds to the wallet though. Somehow have to copy the wallet code from phone to desktop. Maybe via email, which defeats the purpose of being more secure
@this_that5553 Use the coinbase phone app and then just copy/paste within your phone.
@here should we split crypto vs non-crypto finance?
So, trying to get in on buying ripple, first coin im buying ever, complete noob, getting this set up is ridiculous.
Dont know which exchange to use. Pretty sure im going to end up getting my identity stolen, everyone wants my social and what not. Plz halp.
No just ban nocoiners
@ThisIsChris yes split out crypto currency related conversation from all other finance
Yes we should split them
Lol when the cryptos correct
COINERS GET OUT
coiners pls leave
Mfw this channel still ends up being about crypto
No more crypto conversation in here
There's so many other finance topics to discuss that need a space: stocks, bonds, options, houses, business, tax-advantaged accounts, etc
For future people: this channel has a good history of noncrypto financial advice, you just have to search or scroll past the crypto stuff
Aka no bubble chasers
Muh scarcity != value
Financial experts: (including @Tycho Brahe and @Zyzz and any other Financial experts I might have forgotton) I'm been learning about researching stocks, and while I've seen a lot of explanations and theoretical models, I've never seen an example of a fully written out report that an analyst might write about a stock. Does anyone know where I could see some? I don't care if they're outdated or w/e I just want to see what an end result would look like. More examples the better.
MorningStar used to have some reports for free, I haven’t checked lately to see if they still do.
I still check stock valuations on Morningstar for free.
Your online broker may (usually does?) have access to reports from Morningstar, etc. Mine does.
`“You know you are in a bubble when the shoeshine boy starts giving financial advice and people take it seriously.”`
we are absolutely in a bubble. Its being driven by low interest rates (cheap money) that are driving up asset prices well above the rate of wage growth
"Delinquencies on subprime auto loans made by non-bank lenders have been soaring for years, with the rate now approaching 10%."
@Zyzz How do I protect my savings for when the bubble pops? What's the likelihood of my investments taking a huge hit when the bubble pops?
That's what I'm worried about, but I'm not even educated enough to properly express my concern
@John O - thats the million dollar question that we all wish we knew. there is no sure fire way other than holding 100% cash. Other than that, pick a selection of broad based and diversified ETFs/mutual funds while keeping a portion of your savings in cash. Manage the % cash in your portfolio based on how optimistic you are about the stock market. it is very tough to call the top in the market
@Zyzz my biggest Q about a likely bubble is: is it going to cause a 2001 style 3 month recession, or a 2008 utter nightmare?
Also, 2008 is not as bad as it could get. It could get much worse.
True but hard to grapple with mentally, wasn't 2008 the biggest recession since the Great Depression?
@ThisIsChris thats a good question as well. To determine what the next situation may be like I think we need to examine what caused the last two. From my limited understanding of the 2001 recession, it was in manufacturing and largely unfelt by most of the country. The 2008 recession was obv felt by everyone. imo, the #1 factor that caused the recession was people getting loans they shouldn't have gotten (subprime - who are mostly minorities). this caused asset price inflation in housing (values far exceeded intrinsic value). money was somewhat cheap and was most certainly easy to attain. all of the fall out that came through defaulting derivatives and lehman going under was due to the pop in the housing market bubble, making it the origin of the crisis, imo. The housing market is a VERY large asset class. If we were going to go through a similarly painful recession, I'd venture to say we will have to have a similarly sized asset class burst. let's talk about different asset classes, their size, and propensity to burst.
Does anyone know why I cant C+P from word?
not trying to retype all of that
@Zyzz you're on your computer, right? From Word on your computer to Discord?
The subprime auto loan market is doing poorly (10% default currently). While I think even a slight 2001 style recession would send the default rate up dramatically, this market is not large enough to cause serious systemic damage. The next asset class that is pretty large (over $1 trillion i believe) is the student loan market. From what I understand, you cannot discharge student loans in bankruptcy (both public and private loans). I am not exactly sure how the accounting would work for a financial institution who has made loans to students who have fallen behind on payment but if you have massive non payments by borrowers this could dramatically impact a firm's business operations which could result in 1) lower earning/decreased profitability, 2) pullback on lending, 3) something else I am unaware of. I do think the student loan market is resilience because 1) inability to default on payments, 2) parent cosigners. students are absolutely debt slaves but being a debt slave does not cause a massive recession. large numbers of people defaulting on payments at the same time does.
I was able to do it on my phone
@everyone if you have any interest in investing in 2018 read the below:
I have been thinking about 2018 as an investment year. I have come to the conclusion I think there is a strong possibility the S&P 500 will go up rather than down in 2018. As such I will be establishing a rather large position in the S&P 500 2x leveraged ETF ticker symbol: SSO. My thoughts are as follows: 1) I think the tax bill will provide substantial tailwinds for the economy. businesses are optimistic and will be more likely to provide employees with bonuses, higher wages, and increased hiring/more job security. consumer confidence has risen precipitously since trumps election and I believe it will continue to rise and stay high due to 1) more money in their paychecks, 2) better prospects for raises/promotions, 3) job security (due to companies hiring). The economy is ~70% consumption driven so it is always a good thing for the economy when consumers feel good about their economic prospects. the proverbial animal spirits are most certainly at play here.
How does this investment work? It’s a directional bet on the S&P 500 with 2x leverage. I think the S&P will go up rather than down in 2018 and I am buying this ETF to magnify my returns. Ex: lets say the S&P goes up 10% in 2018. This ETF will return 20% over the year. If I am wrong and the S&P goes down rather than up, remember, you’ll lose twice as much.
Who this investment is good for? 1) someone with an IRA who does not care about cash flow and will not be able to touch the money in 30+yrs, 2) someone with substantial resources who can afford to take risks. 3) someone willing to take on risk in general. Understand, if I am wrong, and the S&P decreases over 2018, you’ll lose twice as much as you would otherwise.
Something to watch also, Dominion energy as a long play
whats your thesis?
new facility built in cove point that exports natural gas from fracking in PA
The pipelines already existed as import lines
but are now being used to export to Japan
Cabot Oil and Gas contracted with Sumitomo corp and Tokyo Gas
selling 350,000 million British thermal units of shale gas per day for 20 years
@here Just a generic but friendly reminder not to risk money you can't lose
@Zyzz The SSO prospectus states its investment objective is to have 2x the daily % movement each day. How does that translate to a longer term investment over 2018? Also, any thoughts on using options on SPY to get leverage as opposed to a 2x ETF?
@ThisIsChris my theory is the s&p will go up in 2018 rather than down(reasons stated above). the ETF magnifies the % gain of the S&P. If you have good conviction the market will go up rather than down why not magnify your return if you are willing to take the risk?
in regards to options...
you can purchase a LEAP with an expiration of Jan 2019/Dec 2018. I do not have much insight to those strategies so really can provide much color
There are many ETFs available that are set up to track S&P500 at various levels of leverage. No need to spend the fees on options, these ETFs utilize economies of scale of thousands of people wanting S&P leverage and do the options trades from a centralized role.
I’m concerned that they could manipulate the interest rate to take the wind out of Trump’s sails.
We’re 10 years out from the last recession, there’s been a lot of money printing, I’m expecting another recession before Trump’s first term is over.
People are euphoric about the economy, housing index and equities are at all-time highs. The tax breaks are great for business, but we’re also very inflated from money-printing that dug us out of the last recession and that check always comes due. It’s what causes the boom-bust cycle, “stimulating” the economy with tomorrow’s dollars today, over and over, until the distortions get out of control.
@Tanner - SC i have a lot of the same concerns as you in regards to the easy money policies. it will be interesting to see at what pace the fed raises interest rates. i do think trump will be successful with actually getting some inflation. i suppose this could prompt the fed to raise rates although i'd rather see them sell off their MBS portfolio which will steepen the yield curve. we are absolutely in a bubble. current valuations from everything from stocks to hard assets has gotten out of control and is certainly in excess of intrinsic value. asset prices are being kept up by easy money and low interest rates. the only question is what will cause the bubble to pop and when
One attack avenue is simply raising the interest rates quickly. Easy onset of volatility, popping the bubble, and it can still be blamed on Trump.
yes we will have to watch for the cadence of rate increases
And even though there are reasons for growth, I have a hard time going long S&P500. It feels like betting on the greater fool. If it’s fundamentally over-valued, it shouldn’t be bought, even if you think you can sell to a greater fool in 6 months. Because the underlying fundamentals are a vacuum that could suck the price down at any moment. Though I suppose you could put in a stop loss, but ... eh.
I’m always reminded of my favorite quote, “there are no markets anymore, only manipulations.”
I do feel lonely being the only one trading options here
If you like thinking about volatility and time value then they are very interesting.
@ThisIsChris in terms of option strategies I only utilize them in one way. If I see a company that is going into earning where expectations are low (perhaps the stock has sold off quite dramatically prior to earnings). I will buy at the money calls for the front month contract (earnings date is in Jan. 2018, I will buy option contract with expiration in Jan 2018 assuming it does not expire prior to the earnings date). My plan is always to exit the position the day of earnings whether I am right or wrong. My goal being to take advantage of any volatility that was present itself. Time decay is not on my side here so i try to minimize that risk.
I did this with GIII prior to their recent earnings and made out well
What strategies do you use?
@Zyzz Nice, I like to use options during earnings season too, though I will usually get ones expiring a few days or maybe a week max after the earnings report comes out since they respond more sharply to the movement of the stock.
Outside earnings season, I still like to use options for all sorts of things. For a while I was using OTM "protective" puts as insurance on an ETF I was holding (This was USO for the first six months of 2015). Sometimes I buy naked puts deep ITM as a way to short a stock, which I did with SPY in the 3rd quarter 2014 and turned my first profit. More recently I've been selling OTM covered calls on SPY as a way to get extra money out of holding that stock. During earnings season I will usually use vertical spreads as a way to cap the cost of the options I buy and as a way to more easily quantify my risk/reward ratio (vertical spreads, especially with very close strikes, act a lot like binary options). Those are the main strategies I use. Sometimes if I have an opinion about something long term but I don't think it will happen short term, (like if I think SPY will go up in the next 3 months, but not in the next week) then I might buy a calendar spread where I buy longterm OTM and sell short term OTM. I also played with selling an Iron Condor once and I might a few bucks. The covered calls and the Iron Condors I used for safer bets that net me just a few bucks, and they're always near-term expiry.
what are good resources (preferably free) to learn about options and how to use them>
I gave a talk on here a few weeks ago. I can do it again.
If you get one or two more people to join that would be even better @Deleted User
@ThisIsChris Options are a lot of fun. I usually buy puts on stocks I think will bomb on earnings.
Here's a leverage story you might like:
in early summer 2015, I read an article about how Chinese peasants were double-mortgaging their properties to buy into the stock market
there were makeshift "stock cafes" being set up where they could come in and buy stock.
I saw this as a once-in-a-lifetime opportunity to make an obvious play
There's an ETF called YANG
it's a 3x leveraged bear fund for the broad Chinese stock market
Oh yeah YING and YANG lol
so if the chinese market goes down 1%, it's engineered to increase 3%
So I bought a couple thousand worth of OOM call options on it
oh god, 3x ETF, in an options story...
worked out pretty well
Wow, I have to call no homo and no schlomo, but that's really awesome
I could have held on a few more weeks, but I was very happy with the return
opportunities like that don't come around very often .I was lucky enough to read the right news article
I was lucky it tanked so quickly too. If I had been off on my timing it would have been a washout
sometimes things work out!
Yeah good job dude putting that into action!
I love those complex strategies though
it's fun to see them mapped out in thinkorswim
I haven't seen a good opportunity for one yet. I usually keep it simple-minded.
Yeah I love looking at charts showing payoffs evolve in time, and how they start off in these weird smooth shapes that slowly converge to rigid slopes
Can you tag me if you're making an interesting trade? I'd at least like to follow along. I might jump in too if I understand it enough to make an informed decision.
Yeah dude I definitely will, please do likewise!
I understand the fundamentals, but I don't spend enough time digging into opportunities
Yeah that's a New Years Resolution of mine is to research opportunities. Past year I've just been doing things around earning season on FAAAMNNG or covered calls on SPY. I had more time to research this stuff a few years ago and looking to get back into it more
The YANG trade I mentioned earlier ^^^
dude that's so awesome
Covered calls are fun
Great way to make your blue chips do a little extra work
Yeah I usually sell slightly OTM SPY calls expiring the next wednesday or Friday
I only have enough shares to sell one, so it's basically me picking pennies off the floor
So it's still worth it even after the transaction fees?
Yeah I can usually get 30-40 bucks out of it after commissions, per trade
over a month adds up to about 120-150. Really small considering what I have to put down to cover it, but I was burned during Q3 earnings season and I wanted to do something calm
My broker has an API, but they only open it up if your account is freakin' huge. I would love to automate something like what you just said
Which Broker is that?
Hmm I've heard of it but never used it
Interactive Brokers has an API, they require a minimum of 10k
Ameritrade is 400K
yeah Interactive Brokers is only one dollar trades too
plus something per contract I think
Ameritrade is damn expensive: $9.99
plus fees for options also
Yeah the cheap commissions plus API is it's selling point, though I don't have an account there
Wow man yeah that is pretty expensive
Are their preipheral services good or something?
eh, they're okay. Good with tracking for tax purposes
good customer service
and I don't make any trades
if I did more day trading I would probably open a second account
Interactive Brokers provides absolutely no frills lol. Not even stock quotes, you would have to look that up on Yahoo. Though they will supply you with data for extra subscription fees
I'm talking about them because I researched them, but i don't actually use them. I use Schwab
quoting through pleb-tier finance sites is almost real-time now, so that's a decent trade-off
Schwab is like 8 dollars an option trade plus .65 per contract, and they only allow two legs per trade, so building something like an iron condor costs quite a lot which is why I don't bother most of the time
On the Iron Condor I sold there, I think I paid like 30 bucks in fees
Ameritrade would be about the same though
Here's a trade I've starting thing about
I was thinking about @Zyzz 's thesis about the S&P500 going up this year
and I was thinking to research it a bit more, but here's my idea
Buy a long term (Maybe a LEAP) OTM call option, but sell a near term call at the same strike
that way trying to save on the time premium
I would need to research more to try to figure out a good window of time
thats an interesting thought
buying the dec 2018 295 strike is ~$2.60. that implies 10% appreciation over 2018
@Zyzz Yeah maybe we can put our heads together and crowdsource this together. (Since this isn't happening right away I think, then I think we have time). Here's the three questions I would like to figure out: 1. What is a reasonable price target that can be achieved this year? 2. When is a reasonable window in which it might reach that target? 3. Are there any reasonable near-term windows where we might think it *won't* hit the target? For example maybe the answers are 4%, September, and March, respectively
Hmm now we're cooking, let me pull those chains up
@ThisIsChris so heres my thought as to how we will figure out a price target. we need forward earnings predictions and then apply a reasonable multiple to it. that will allow us to back into our price target.
we are essentially taking earnings predictions and applying a multiple to it. the trick with the multiple is we need to assess if it could compress or expand
according to that the S&P is trading at 21x P/E
which is very rich.. historically the S&P trades at ~15x
"according to that the S&P is trading at 21x P/E
which is very rich.. historically the S&P trades at ~15x" @Zyzz what do you think? Is that necessarily bad news? Or should we try to see if earnings might go up?
@ThisIsChris its really about reversion to the mean and from this vantage point it means go down
Doing it this way, I wonder if we should be looking at an ETF with fewer holdings so that we can look into each major holding individually, though if there is another way I would love to know
individual stock research is a lot of work and even with all the research there could be something you just miss or never thought about that tanks the stock.. it could be bad or greedy management.. which for us would be tough for us to be privy to
Hey that's OK then, maybe SPY going up isn't the thing, maybe we should be looking at SPY to go down over the year then. That's actually kind of more interesting because we might expect a slight boost at the beginning thanks to the tax cuts, and then a reversion later in the year
i used to pick stocks and i did not do very well and it was mostly due to stock specific issues so i changed to pick sectors or invest in income producing securities like preferred stock
yeah my issue with that is i have no idea when the market will tank. i know we are in a bubble but it seems like trump and everyone else in congress is deadset on blowing it until it pops on its own. i am not about to be short this market it just seems like their is too much momentum with the tax bill etc. it'd be like shorting the market in 2005/2006 imo
I'm back, catching up to the thread...
I agree with @Zyzz The aggregate P/E of the S&P is too high for me to be comfortable making large bets on upwards moves
If I were to do that, I would want to hedge for a big crash
I think it's going to go up 10% on the year or nosedive hard.
but that and $4 will get you a coffee at (((Starbucks)))
@Zyzz here's a question, do you think we could say that even if the market goes up possibily, can we be confident saying it *won't* go up 10%? Maybe selling those OTM calls is a way to go on this
War is the most obvious thing, but a general bubble-popping correction seems overdue.
Nose dive not sure, but we could get interest rate hikes from the fed
@ThisIsChris i am seeing dec 2018 295 strike calls sell at ~2.6. i dont think thats enough premium for me to hold for a year with unlimited loss potential
I don't see things staying static is all I'm sayin'
@Deleted User war is a possibility with NK no question. What would pop the bubble?
I think a broad-scale pullback on credit
i am expecting rate hikes from the fed.. i think cadence of rate increases is key
too many rate hikes, too quickly will spell disater
IMO the american consumer is tapped out
The outstanding credit numbers are nuts, both in the consumer and corporate spheres
I think that's what is driving a lot of the increase in stock prices
@Zyzz agreed on the decembers, now I'm looking at chains for more near term (also included on the pdf)
lenders get frightened? i can see that happening. what would cause them to get frightened?
I'm saying that there will be a pull back on people seeking credit
especially if interest rates rise
i 100% agree that consumers are buying on credit rather than actual money they are earning
or rather, I'm saying that pullback would be the catalyst