#noncrypto-investing (Discord ID: 352760194775777282) in MacGuyver - Skills & Academics, page 4


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2017-12-28 23:10:05 UTC

gonna be AFK for a bit but I'll rejoin later and jump in if I have anything to say.

2017-12-28 23:10:23 UTC

Hope you do!

2017-12-28 23:19:08 UTC

i get a lot of my student loan info from zerohedge

2017-12-28 23:20:06 UTC

@Zyzz Interesting. If I understand the process your analysis took: 1. You knew that understanding the size and eliinquincy rates of different asset classes was important to know, and then 2. you googled around for articles that talked to each asset class and its delinquincy rates. Is that correct? I'm just trying to understand process, I thought there might just be a single database where you go to get these types of facts, but I also wouldn't be surprised if such a database didn't exist and you just have to know the right question to ask and start googling

2017-12-28 23:20:41 UTC

And the reason I'm trying to understand process is I'm also trying to learn how to do good research myself of course

2017-12-28 23:20:52 UTC

Not trying to "question" or something

2017-12-28 23:22:34 UTC

@ThisIsChris at work we talk about this stuff a lot. that seeking alpha link was something i knew intuitively (subprime auto defaults) but didn't know an actual %. there are a lot of people in SoFl with nicer cars than me and I know damn well they do not make as much money as I do.

2017-12-28 23:23:27 UTC

student loans I knew about by reading zerohedge. i have also heard anecdotal stories of high debt loads and parent cosigners (you remember cannoliqueen?)

2017-12-28 23:23:58 UTC

we understand recessions happen every 8 or so years.. the last one was in 2009

2017-12-28 23:24:23 UTC

we are about due for one. i know the market is frothy and not just the stock market but the RE market as well

2017-12-28 23:24:51 UTC

its not a question of if but when and what will trigger it

2017-12-28 23:25:20 UTC

my position is the tax cut will kick out the possibility for a recession a few years. i dont think it'll happen until after trumps reelection

2017-12-28 23:27:59 UTC

if we look at 2008's recession that was triggered because you had this massive asset class getting bid up in price with easy money (teaser interest rates, very high LTV (loan to value), no doc/no income loans, subprime borrowing, diversity programs for home loans, etc.). and of course you had some predatory practices such as adjustable rate mortgages amongst other things.

2017-12-28 23:29:24 UTC

the financials crisis could have been avoided if they would have done: 1) require 20% down payment no matter what, 2) require documentation as to the borrower's job and current income. and of course forget about the other social engineering bullshit

2017-12-28 23:31:27 UTC

poeple like to blame the financial sector for the financial instruments that were created. that only became an issue because the paper they were securitizing was worthless. if the loans were quality loans then that all would have been fine and you never would have had all the defaults and bankruptcies you saw

2017-12-28 23:32:20 UTC

we are simply trying to kick around some ideas as to what will cause the next recession

2017-12-28 23:33:47 UTC

it could be an asset price bubble that pops or it could be the fed raising rates to quickly

2017-12-28 23:34:48 UTC

if trump is successful with cutting immigration you will have upward pressure on wages which will help kick the can down the road. i do think he will be successful here and i do think you will see upward pressure on wages. again, all of this will help

2017-12-28 23:39:10 UTC

Hmm, that might have to wait for a new congress. Which could help recover from any recession that starts this year. I wonder, do you think the next recession will be so bad as the 2009 one? Will any coming recession even put us into negative growth or just slow us down for a bit?

2017-12-28 23:41:55 UTC

I wonder if Student Loan defaults would only grow after a recession starts instead of leading to it, looking at this: "The U.S. Department of Education today announced that the three-year federal student loan cohort default rate dropped from 11.8 percent to 11.3 percent for students who entered repayment between fiscal years 2012 and 2013. The trend has moved downward since FY 2010, when the cohort default rate stood at 14.7 percent." https://www.ed.gov/news/press-releases/national-student-loan-cohort-default-rate-declines-steadily

2017-12-28 23:44:02 UTC

the technical definition of a recession is two or more quarters of negative GDP growth

2017-12-28 23:44:32 UTC

i am hopeful at the state of the union trump will talk abut the need for immigration reform

2017-12-28 23:44:46 UTC

aw yiss I hope so

2017-12-28 23:45:44 UTC

i think the next recession will probably be more akin to 2009 because the boom will have gone on for ~11 or so years. will it be as bad? i dont think so but it wont just be a blip either

2017-12-28 23:46:20 UTC

yes, i believe student loan defaults may be a lagging indicator of job losses

2017-12-28 23:47:25 UTC

i wonder if we go thru a period of rapid automation (self driving cars, bank tellers, fast food cashiers, other job??) if the fall out for low IQ people will be so bad to cause a recession

2017-12-28 23:48:09 UTC

the question is what would come before job losses?

2017-12-28 23:48:39 UTC

interest rates being too high and companies being unable to get investment project expected returns to pencil?

2017-12-28 23:49:17 UTC

"to pencil"?

2017-12-28 23:49:41 UTC

it means to get numbers to make sense to the point where you'd want to invest

2017-12-28 23:50:21 UTC

if a company needs a 20% IRR (internal rate of return) and getting to 20% requires a discount rate of say 2% but the discount rate is at 3%. the numbers arent going to pencil

2017-12-28 23:53:03 UTC

Thanks for the thoughts and explanations. It's late here now (on vacation in Italy) so I will have to come back to this later. Good night!

2017-12-28 23:53:15 UTC

sound good man good night

2017-12-28 23:55:00 UTC

@Zyzz All this makes sense and is in line with my thinking. Here's one question I've never seen addressed to my satisfaction: what, if anything, will be the consequence of holding interest rates so low for so long? It seems to me that there was a gigantic bolus of new credit created under this ZIRP/near-ZIRP regime that kept things humming since 2009.

2017-12-28 23:57:15 UTC

@Deleted User you will see big deflation in interest rate sensitive assets. this will be especially pronounced in RE notably single family homes. that is assuming rates rise rapidly over a short period of time. if we have gradual rate hikes over a decade or so and stabilize at a more normal level you will see a stagnant decade of home price appreciation but you will not see a rapid fall out in prices

2017-12-28 23:57:49 UTC

So you think RE will be the main area of impact then?

2017-12-28 23:57:57 UTC

it could be

2017-12-28 23:58:04 UTC

depends on what type

2017-12-28 23:58:08 UTC

and where of course

2017-12-28 23:58:16 UTC

What do you think about the corporate buybacks aspect of the stock market rise?

2017-12-28 23:59:09 UTC

buybacks have historically been a poor use of capital for firms over time. as an investor i always like seeing it because it shrinks the available supply of stock available which means prices go up in the near term (all else holding equal)

2017-12-29 00:00:28 UTC

exactly. Do you think that will have negative reprecussions beyond the individual companies though?

2017-12-29 00:01:18 UTC

i think the only drawback could be if they took out a lot of debt to fund those buybacks and having that heavy debt load gets them into trouble when the economy eventually tanks

2017-12-29 00:01:38 UTC

itll be something that prolongs the recession rather than drives us to it imo

2017-12-29 00:01:45 UTC

makes sense

2017-12-29 00:02:29 UTC

an example being in 2008 what caused the recession was giving loans to anyone who was willing to sign their name. what prolonged the recessions were all the derivatives that went bad that caused banks and other financial institutions to go bankrupt

2017-12-29 00:03:10 UTC

Yup. And it seems to be this was done on a broader scale during ZIRP

2017-12-29 00:03:22 UTC

e.g. the subprime auto loans mentioned above

2017-12-29 00:04:14 UTC

yup although companies are much better managers of money than individuals so my hope is they will be able to handle their maturity schedule and not overleverage themselves especially not after 2008/2009

2017-12-29 00:04:32 UTC

many companies had issues with having enough cash

2017-12-29 00:05:51 UTC

right on. thanks for your perspective!

2017-12-29 00:06:20 UTC

It's hard to find sober opinions on the data

2017-12-29 00:07:20 UTC

sure thing man

2017-12-29 15:04:19 UTC

>i think the next recession will probably be more akin to 2009 because the boom will have gone on for ~11 or so years. will it be as bad? i dont think so

I think it'll be worse. The big banks are still insolvent, they still have assets on the books that are recorded at historical value, not marked to market. They do have a lot of cash on hand that hasn't moved in a decade. If they start spending it for some reason, that could really ramp up the velocity of currency and destroy purchasing power.

These historically low interest rates will always result in malinvestments. People are getting loans for things that they don't deserve, low-NPV business ideas are getting funded because investment capital has no stable option for return, they're forced to chase returns in risky areas just to avoid the decay of purchasing power.

Why did the FED, in 2006, stop reporting on the M3 total supply of currency?

2017-12-29 15:05:52 UTC

These historically low interest rates will always result in malinvestments. People are getting loans for things that they don't deserve, low-NPV business ideas are getting funded because investment capital has no stable option for return, they're forced to chase returns in risky areas just to avoid the decay of purchasing power.

2017-12-29 15:05:56 UTC

^i deff agree with that

2017-12-29 15:07:46 UTC

And nobody wants bonds at the current artificially low rate, so the fed is printing money and buying bonds with it. Crazy stuff.

2017-12-29 15:08:10 UTC

if the fed unwinds their MBS portfolio itll be interesting what it does to long rates

2017-12-29 15:08:12 UTC

They are stealing purchasing power from savers and forcing that money into bonds.

2017-12-29 15:08:17 UTC

10-30yr bonds specifically

2017-12-29 15:10:01 UTC

And there's so much money sloshing around in the stock market because all kinds of cattle are herded into it. Every schmo in corporate america gets like 10% of their pay tied up in government regulations forced into the stock market with the "5% contribution, 5% match" 401k nonsense. The corporations do it because the government taxes them less on payroll if a portion of it is forced into the market. And tax breaks on normal IRAs also forces more people into the market that otherwise would not be in the market.

2017-12-29 15:11:01 UTC

"I'm gonna steal your money unless you put it in the stock market" is what the government is doing over and over.

2017-12-29 15:11:27 UTC

They say they need tax breaks to drive saving, but only if it's channeled into the stock market, then they say they need lower interest rates to drive spending. It's nonsense.

2017-12-29 15:36:42 UTC

In the short term, the US will probably be ok, but in the medium and long term, what would you two say is the “best show in town” for passive investment? Is Europe really in better shape? What about world stocks overall? @Zyzz @Tanner - SC

2017-12-29 15:38:08 UTC

good question. i lack trust in china although it seems like their economy has the best potential for growth and to become a superpower

2017-12-29 15:38:40 UTC

i think europe falls tbh. you cannot import low IQ people and expect your human capital to remain as great as it was in previous generations

2017-12-29 15:40:13 UTC

my mom was on the phone with someone from verizon yesterday. she said it was some haitian woman. needless to say but the lady was as dumb as a box of rocks. my mom was on the phone with her for 2+ hours trying to get something done that should have taken perhaps 30 mins. as soon as she got off the phone with the haitian woman she tells me about it. those are the types of people who are replacing us

2017-12-29 15:42:08 UTC

perhaps switzerland will do well in the long run. also australia/new zealand maybe

2017-12-29 15:43:47 UTC

i am waiting for the moment when soverign debt investors start looking at a countries demographics and demographic projections (by race), look at avg IQ by race, and consider those varibles when pricing a country's debt

2017-12-29 16:08:33 UTC

They probably already are

2017-12-29 16:09:26 UTC

ok well in 20yrs the risk premium on US treasuries will go way up

2017-12-29 16:13:38 UTC

So on the question of where to put money for long term investment, will we beat the rest of the world or will the rest of the world as a whole beat us? In your opinion of course, just want to see your perspective as someone on the ground

2017-12-29 16:15:35 UTC

the US has had tremendous growth since 1980. it will be hard to top that over the next 40 years. and that includes the financial crisis. the US is a mature/developed economy so we have that working against us as well

2017-12-29 16:16:24 UTC

there are certainly other parts of the world where it'll be far easier to have +4% GDP growth simply if their govts would get out of the way

2017-12-29 16:17:17 UTC

Argentina used to be one of the world's best economies in the early 20th century (look at demographics and you'll see why). It fell in the 60's due to corruption from the Peron family and hasnt really recovered

2017-12-29 16:18:17 UTC

if argentina's govt could get out of its own way they most certainly have the human capital to grow at an above avg rate over the next few decades

2017-12-29 16:21:18 UTC

the question is what will cause these countries to implement the needed reform to have fully functioning economies

2017-12-29 16:23:12 UTC

Thanks for the analysis 👍🏻

2017-12-29 17:19:36 UTC

I'm a firm believer in keeping a portion of your assets outside of the banking/equity system.

2017-12-29 17:47:44 UTC

@Tanner - SC what do you own outside of the banking/equity system? Gold? RE?

2017-12-30 07:11:33 UTC

@ThisIsChris ^ "govt student loan portfolio $1.37 trillion"

2017-12-30 11:52:15 UTC

@Zyzz that is bad for students, but is that bad for the overall economy in terms of stock market or whatever? This is going to sound supremely Jewish, but only looking at it autistically from an investment standpoint, it looks like this student loan debt will pressure people to take jobs on terms they might otherwise turndown or renegotiate because they are more at the mercy of their student loan payments. This lack of negotiating power on the part of labor would be beneficial for companies. Thus while student loan debt is bad for working people, I'm trying to understand if it is bad from the POV of hurting investments like stocks

2017-12-30 15:18:01 UTC

@ThisIsChris I think you are right. The only impact this has is people with debt will not be able to consume as much (need to pay debt) and will be unable to buy homes (which isn't always a bad thing). They will just end up renting rather than buying a home. From an investors standpoint, this will not cause a bubble as they are not allowed to discharge debts in bankruptcy and there are plenty of ways for lenders to garnish wages.

2017-12-30 15:19:22 UTC

I can see people with debt having less flexibility which will lead to them taking less risks from an employment standpoints (turning down job offers, quitting jobs, entreprenuerial endeavors, etc.)

2017-12-30 16:26:32 UTC

savings rate is 2.9%

https://cdn.discordapp.com/attachments/352760194775777282/396700593583947778/Screen_Shot_2017-12-30_at_11.26.01_AM.png

2017-12-30 16:54:32 UTC

@ThisIsChris Entrepreneurship is way down partly because of student loan debt, and that’s not helpful for the market.

2017-12-30 16:57:20 UTC

Also, that’s a lot of capital that would have gone to other more productive uses had the market manipulations not channeled so much of it into overpriced academia.

2017-12-30 16:58:28 UTC

Every market manipulation has an easily observable benefit for a small sliver of the economy, and a larger unseen detriment.

2017-12-30 16:59:44 UTC

I highly recommend this book for everyone in this channel, it’s a short easy read:
https://www.mises.org/library/economics-one-lesson

2017-12-30 17:01:12 UTC

@Zyzz great chart, shows we are at the peak of the boom-bust cycle. We should prepare ourselves while times are good.

2017-12-30 17:02:43 UTC

Everyone make sure you have enough saved to last a minimum of 6 months of unemployment.

2017-12-30 17:03:49 UTC

And don’t expect unemployment payments from the government to be a fall-back plan.

2017-12-30 17:04:46 UTC

Also, the FDIC only has less than 1% reserves for the FDIC insurance on your bank account, so in a crisis, your money will not be protected.

2017-12-30 17:24:23 UTC

@Tanner - SC#6686 i agree. I have only small credit card debt that i pay off every month and a lot of cash on hand

2017-12-30 18:25:45 UTC

@Zyzz WTF, you have credit card debt and you're giving investment advice? What's the APR on that, 15%?

2017-12-30 18:36:07 UTC

as i said, i pay it off every month. ie: i do not carry a balance

2017-12-30 18:36:57 UTC

also, even if i did carry a balance, not sure how thats relevant to my ability to give investment advice/analyze the current environment

2017-12-30 20:24:14 UTC

It’s not debt if you don’t carry a balance. I thought you meant you were making payments against a carried balance.

2017-12-30 20:25:42 UTC

As for advice, anyone who is paying 15%, 20% on cc debt obviously doesn’t understand finance, like a fat man giving diet advice. But that’s not the case for you.

2017-12-30 20:26:59 UTC

I figured it wasn’t, given your analysis earlier was too sharp to be someone carrying a balance.

2017-12-30 22:51:43 UTC

A lot of people get tricked into playing the stupid games the credit agencies have you play. They get a credit card and pay off 3/4 of it every month because having a small balance to charge interest to gives you a small 20 point boost. Just pay off the whole debt every couple weeks. That's what I do, and my credit is near perfect (or as close as you can get)

2017-12-31 02:10:45 UTC

This looks ugly, where has all this money gone? Straight from the fed into bonds? Is there really 3x as much currency units today as existed 10 years ago?
https://fred.stlouisfed.org/series/M1SL

2017-12-31 02:14:13 UTC

QE Infinity....

2017-12-31 02:19:16 UTC

Everyone should be incredibly careful about giving personalized investment advice on here

2017-12-31 02:39:00 UTC

@Darth absolutely, just yesterday pinned a notice to only invest money you can risk losing. Feel free to @ everyone to repeat every once in a while, I will try to do it every few days. See pins for an example

2017-12-31 02:49:12 UTC

Yeah, just making sure, brother. :-) With being an attorney, I can be a little anxious...hahaha

2017-12-31 02:53:04 UTC

We don't need FINRA and the SEC up in our grills...haha

2017-12-31 19:10:12 UTC

"The Fed's "balance sheet normalization" will accelerate as 2018 progresses: In Q1, the Fed is scheduled to shed $60 billion in securities, in Q2 $90 billion, in Q3 $120 billion, and in Q4 $150 billion, for a total of $420 billion. This is scheduled to increase to $600 billion in 2019."

2017-12-31 19:14:16 UTC

What does this mean really? We don’t really have reserve requirements anymore so this will just reduce the money supply by that much every quarter correct?

2017-12-31 19:15:26 UTC

a quick google search tell me the reserve requirement is 10%

2017-12-31 19:15:38 UTC

the jist of the article was talking about the yield curve

2017-12-31 19:16:01 UTC

currently it is flat - ~50bp spread between the 10yr and 2yr

2017-12-31 19:16:28 UTC

an inverted yield curve (short rates greater than long term rates) is a leading indicator a recession is on the horizon. we had this in 2006

2017-12-31 19:17:01 UTC

the above quote shows that fed has ammo to keep the yield curve normal (short rates lower than long rates) which is a good thing

2017-12-31 19:18:36 UTC

Trying to find the report but apparently banks have gone on record saying that they will make loans without reserves and find the reserves later. Maybe they are referring to the discount window

2017-12-31 19:18:42 UTC

again, its importnt to watch cadence of fed rate increases.. too quick and it will trigger a recession i believe. 2-3 rate hikes it about right for 2018. 50-75bp increase puts us at ~2% fed fund rate

2017-12-31 19:37:07 UTC

The increases you are talking about are to the discount rate, correct?

2017-12-31 19:39:10 UTC

the federal fund rate is the minimum rate banks can borrow from other banks. the discount rate is the rate at which banks can borrow directly from the fed

2017-12-31 19:44:15 UTC

Right but the fed reserve only controls the discount rate directly where as the fed funds rate is indirectly controlled correct

2017-12-31 19:44:37 UTC

that is my understanding yes

2018-01-01 02:34:21 UTC

@Zyzz have you read Gottfried Feders "Breaking interest slavery"? and what do you think of his pronouncements, or generally the argument against usury or borrowing money at interest? is money only a measure and an exchange or should it be treated as a commodity?

2018-01-01 02:41:29 UTC

@REVNAT/PA I haven't read the book but my thoughts on charging interest on loans is as follows: no one in their right mind would give you money (for free) with the expectation that it'll be paid back at a later date. lending money has inherent risks (not being paid back) and a lender should receive adequate compensation for that risk(interest). additionally, if you are going to lend money out to someone, that means you are unable to use that capital. a lender deserves some form of compensation for being without his capital for that period. if usury were abolished i would not lend it out to anyone because there would be no payoff for me and i would be without my capital for whatever period of time i had lent it for

2018-01-01 03:24:42 UTC

What about state run usury like they had in Colonial Pennsylvania

2018-01-01 03:25:51 UTC

Usury is necessary, it is a market signal for the price of money's time value.

2018-01-01 03:26:47 UTC

I think there should be a separation of currency and state. The state should not be in control of the supply of money, nor the interest rate of money.

2018-01-01 05:18:36 UTC

@Deleted User i am unfamilar with that or how hitler did it in Germany. i generally view state run anything as inferior. socialism/communism are inferior economic systems. not saying capitalism is perfect (especially in this country) but governments getting involved in business almost always results in inefficiencies

2018-01-01 06:21:09 UTC

I am as well but the colony of Pennsylvania had no taxes, just this bank. Sounds like a good deal

2018-01-02 01:52:09 UTC

Usury is an immoral act that was considered a mortal sin for European peoples for a good long time. Debt creates enslavement, it fosters free loading and parasitism of the monied elites, it promotes instant gratification, increases the cost of living for everyone, it punishes children through public and private debts of parents (treasury or student loan). Even if all the moral, societal, familial dire consequences were ignored in order to have 'economic growth', there is nothing preventing anyone from _investing_ in a new business as opposed to lending the money. That is how concerns were set up from time immemorial. There is not one good reason why usury should be legal. All money changers should have their assets stripped and clawed back.

2018-01-02 01:53:12 UTC

morality is for goyim, duh

2018-01-02 01:57:36 UTC

Interest rate is not price of money (I guess maybe in the world of Mises with gold backed blah blah). In our fractional reserve system, lending comes first then "reserves" are conjured up. Money is literally free for the banks. Yet you still pay 15% on your credit card or 5% on your car loan or 3% on your studen loan. They can lend to anybody anytime as long as they think they will get it back. To say that there is a price on an item that is literally (to steal sjw parlance) infinite is just absurd.

2018-01-02 01:59:33 UTC

His articles back during the 2008 recessions were very illuminating and explanatory to me.

2018-01-02 03:09:49 UTC

In regards to the comment about “nothing preventing anyone from investing in a business”. Equity and debt have different risk and return characteristics. So yes, if you are more risk averse and you do not want to bear excessive risk then yes that is stopping you from investing in the equity.

2018-01-02 03:12:42 UTC

Additionally, that is why mortgage securitization was such a great thing (invented by a Christian). It distributed risk to those who were most willing and able to bear it. Your community bank down the street does not necessarily want to hold your mortgage note for 30 years. Securitizing mortgages allowed him to sell off your note; freeing up his capital.

2018-01-02 04:41:30 UTC

I have nothing that could be presented as a counter argument to what you set forth. I agree with what you said: if you have capital it is much less risky and more advantageous to lend the money then to invest the money; receiving rent payments enforced through student loan, mortgage, till tap, garnishments, professional license forfeiture and other statues, laws and legal devices. That IS better and my advice to anybody looking to deploy their liquid assets would be to do it in a fashion where the individual or individuals that are the recipients of said debt will forever transfer to you a portion of their future earnings, hopefully in perpetuity with no or minimal ability to escape the contract. That is good financial advice. Furthermore, should anybody in this Discord chat be in such an entrepreneurial position, I hope they remember me and allow me to participate in the chicanery they happen to luck upon. I am not beyond praying on pensioners with reverse mortgages to ensure my sons can get bottle service at a club to impress the sluts.

2018-01-02 04:41:37 UTC

Since, this _is_ after all a practical investment channel, not an academic discussion so I don’t want to belabor the point but the question was raised by others. My intent was NOT to say that individuals should not chase yields or let their savings be eaten by inflation in order to prove to be the most righteous man standing. I have made substantial multi-year gains going short ABX indexes (betting against MBS) in 2008 and long precious metals. Financial speculation is a necessity today and no man can survive outside a monastery without taking a bit out of serpent’s apple. My intent is to say that it is a provable fact that usury besides being a sin is also an economically net negative policy, creating the very instruments like mortgages that have replaced a multi-generational asset accumulation and private ownership of homes into a system of perpetual renting where an average American today has almost no chance to ever own their own property whereas individuals throughout the world and throughout the history of this country prior to today were perfectly fine buying and owning property after a minimal period of saving. Even if it was not soul destroying, corroding practice, it is an economically destructive one whose merits and demerits would be open to argument some 100 years ago but today are open for all with eyes to see.

2018-01-02 12:07:29 UTC

I agree that the current fractional reserve system is a scam. My point about allowing usury is only when assuming a “world of Moses”, as you say.

2018-01-03 00:23:24 UTC

Anyone have and advice or experience selling call options on your long term hold Stocks for extra money?

2018-01-03 00:33:09 UTC

@Belzec absolutely, one of my favorite things :) have any questions or looking for resources?

2018-01-03 00:35:35 UTC

@Deleted User I told you I would update you if I got interested in an options trade. End of last week I bought OTM NVDA calls expiring day after earnings report

2018-01-03 00:36:29 UTC

@ThisIsChris whats your thesis on NVDA?

2018-01-03 00:44:53 UTC

So I started following it last year, they have three target markets they get evaluated on: 1. Data Centers (like AWS or other cloud providers), 2. Gaming Computers, 3. Crypto mining. Most institutional investors (I understood from listening to their conference call) as of last summer were hyper focused on their datacenter growth, which they were OK on, and completely ignored their gaming computer and cryptocurrecy growth. My basic thesis is that NVDA is still king in crypto mining and the recent interest and legitimization on the futures exchanges may make investors finally wake up to that. On this thesis I'm also considering selling the calls going into earnings instead of after, since my experience is that it attracts lots of attention (read high premiums) and I think I got in a good spot with the strike.

2018-01-03 00:45:02 UTC
2018-01-03 00:45:52 UTC

sounds well thought out

2018-01-03 00:46:06 UTC

good luck

2018-01-03 00:53:40 UTC

Anybody know of any good dividend stocks to look into?

2018-01-03 00:55:36 UTC

@commonplebe - IN if yield is your focus and you do not care much about capital appreciation i'd look into preferred stock. some quality issues will yield ~6-7%. very few (if any) common equity dividend stocks will yield that. and if they do i'd be highly suspect

2018-01-03 00:57:31 UTC

I’m thinking more about long term while on a smaller budget right now.

2018-01-03 00:59:33 UTC
2018-01-03 00:59:39 UTC

look at VZ, T

2018-01-03 00:59:54 UTC

there are some utility stocks that have high yields

2018-01-03 01:00:24 UTC

same with REITs and BDC (business development companies) as well

2018-01-03 01:00:34 UTC

MLPs too

2018-01-03 01:01:06 UTC

Thanks. That gives me a good place to start for research.

2018-01-03 18:36:19 UTC

NVDA heck yeah

2018-01-03 18:36:30 UTC

Up 11 points today

2018-01-03 18:38:53 UTC

I've been reading about Nvidia recently when considering a GPU purchase. They seem to be killing it. They even said recently "we're in no rush to launch the next generation of consumer level products, we are already so far beyond our competition, our marketshare has no risk"

2018-01-03 18:39:31 UTC

That's a bizarre statement to make lol

2018-01-03 18:39:31 UTC

Is this the news that sent it up 11%?
"Nvidia GeForce EULA change prevents data centers from using consumer GPUs"

2018-01-03 18:40:25 UTC

"NVIDIA EULA Update Forbids GeForce GPUs In Data Centers To Protect Fat Margins"

2018-01-03 18:41:00 UTC

Hmm not sure if that's it, but could be. Their main competition, AMD, is also up today.

2018-01-03 18:41:03 UTC

Looks like their consumer level products have lower margins than their commerical level and they're forcing commercial customers to use the commercial level and the customers just shut up and take it because Nvidia is so far ahead of the competition.

2018-01-03 18:41:37 UTC

Oh that explains a lot @Tanner - SC

2018-01-03 18:42:56 UTC

>Strong November chip sales figures from the Semiconductor Industry Association were a catalyst for Tuesday's gains.

2018-01-03 18:44:19 UTC

>Nvidia, which has boomed as its chips have expanded from PC gaming to autonomous driving and artificial intelligence

2018-01-03 18:45:05 UTC

do you think GPUs being used for mining crypto is still giving them a boost?

2018-01-03 18:45:51 UTC

I've seen some emerging coins that use non-GPU mining systems but nothing that would affect current application too dramatically, if it's impact on sales isn't negligable

2018-01-03 18:46:20 UTC

but I do recall a pretty big spike in demand and price not too far back

2018-01-03 18:46:41 UTC

Yes. AMD getting more of a boost from crypto mining than Nvidia due to their hardware architecture being better suited for it, but Nvidia getting a boost too

2018-01-03 18:46:54 UTC

I see

2018-01-03 19:28:54 UTC

@ThisIsChris nice call on NVDA. Are you selling or holding the options you currently own?

2018-01-03 19:42:28 UTC

@Zyzz good question! Now I'm not sure since this is a lot more movement faster than I was expecting, but I will probably sell, maybe roll out or buy back in closer to earnings, not sure yet

2018-01-03 19:45:01 UTC

@Zyzz I just rolled them out to 220 strike for a credit

2018-01-03 19:45:59 UTC

Whenever my limit order goes through immediately I wonder if I should have asked more lol

2018-01-04 13:55:39 UTC

@here just a generic and friendly reminder to not risk money you can't lose. Also that no one here has a crystal ball and unforseen risks can arise.

2018-01-04 13:56:04 UTC

2018-01-04 18:03:04 UTC

@Why Tea How do you insulate your investments from crashes?

2018-01-04 18:06:24 UTC

Well you can't entirely insulate, but you can reduce the risk by diversifying across asset classes that are loosely coupled / correlated with each other.

2018-01-04 18:07:48 UTC

A bad year in the housing market or for commercial rents isn't tied to a bad year for long term bonds, and isn't connected directly with returns on non-cyclical industries, etc.

2018-01-04 18:08:11 UTC

"Own lots of different stuff."

2018-01-04 18:08:49 UTC

I can write/copypasta more about it later and I'm sure our professionals have excellent input to provide.

2018-01-04 18:11:08 UTC

I'm not a pro just an amateur byt one thing comes to mind about one particular sector: you can protect stock investments with "protective puts" which are just puts on stock you currently own.

2018-01-04 18:11:48 UTC

We could definitely benefit from someone giving an overview on options and strategies like covered calls and protective puts.

2018-01-04 18:13:27 UTC

I saw that in here earlier. I've used covered calls with success on some big, slow moving, high-dividend blue chips, etc.

2018-01-04 18:15:17 UTC

Oh yeah I like covered calls, for that

2018-01-05 01:31:00 UTC

Here's a nice slideshow from investopedia with 10 common option strategies, I think it's good and concise if you already know what an option is. https://www.investopedia.com/slide-show/options-strategies/

2018-01-07 01:58:13 UTC

@ThisIsChris Congrats on the awesome NVDA play and thanks for sharing! I've been busy with the kids, but I would have totally jumped on that too.

2018-01-07 01:58:55 UTC

@Belzec if you still want a rundown on covered calls LMK.

2018-01-10 04:03:40 UTC

Oh yeah, the recession is coming. We are nearing peak euphoria.

2018-01-10 04:06:47 UTC

It may be, but ZH is a pretty doomsayer-y site.

2018-01-10 04:16:26 UTC

https://www.youtube.com/watch?v=p5Ac7ap_MAY This shows some striking examples of how bubbles can be artificially created and deliberately popped, while also alluding to benefits of economic fascism or at least "productive lending."

2018-01-11 14:45:49 UTC

@Deleted User @Zyzz I sold my NVDA calls yesterday because NVDA covered all the gap I felt I could reasonably expect in the time window I was looking at and I was losing time value. Now I'm thinking of repositioning myself, NVDA has had nothing but good news lately and its competitors are falling behind, yet I don't think some recent news will be reflected in the next earnings report so I'm looking for a new position. I'm expecting trickling upward movements the rest of the month, which are making me think of buying some vertical spreads, but I'm not sure which ones yet. I'm thinking really near term, like this week or next week expiry, though I'm not sure if I want ATM, OTM, or ITM, that would probably depend on expiry date. Nearer term would make me lean towards ITM vertical call spread, longer term makes me think more OTM vertical call spread. Thoughts and opinions?

2018-01-11 15:44:09 UTC

Hmm, I'm still looking at different expiries. The gorilla in the room is that earnings report is coming out 2/8. One thing I've noticed is that just before earnings the near-expiry spreads tend to approach 50% of their max possible payouts, which theoretically makes sense, and deviations from that reflect market expectations of going up or down. That makes me think the right move may be to look at the 2/9 spreads that are trading < 50% their max payouts, such as the 225/227.5 vertical call spread, which is currently trading around 1.10 and by this theory would approach 1.25 by 2/8.

https://cdn.discordapp.com/attachments/352760194775777282/401038583831724042/Screenshot_20180111-103905.png

2018-01-11 17:04:00 UTC

Let me know if you guys have thoughts. I'm starting to realize I have no theses I feel strongly about on NVDA anymore, so I will probably idle a while until something catches my eye again

2018-01-11 20:46:53 UTC

@ThisIsChris I’ll get back to you later today

2018-01-11 20:57:05 UTC

@Zyzz thanks. I keep checking the options chains. Sometimes things look like good opportunities, but then I start overthinking them and step back

2018-01-11 22:21:24 UTC

@ThisIsChris the only time I play options is when I have high conviction. Otherwise I don’t. I think you may have answered your own question in the last message. Also, I am unfamiliar with the spread strategy so I’m not too qualified to comment.

2018-01-11 22:22:57 UTC

Also what do you think would cause the stock to go up from where it’s at currently? It seems like the market has made a big move and you have made money. Why not take your profit and move on?

2018-01-11 22:37:01 UTC

@Zyzz yeah you're right. I still have some mild opinions which is why I have been reluctant to look away, but I agree it's probably a better habit for me to look elsewhere. I've done a lot of research on it comparing with it's competitors AMD and Intel and it has in my opinion good fundamentals, but I don't have any reason to expect sharp increases this quarter, thanks for second opinion.
As for vertical spreads and such, I love talking and thinking about these type of things, I should write something about it sometime. A vertical call spread is buying at a low strike and selling at a higher strike, with the same expiry. It's kind of like a covered call in that it's a limited payoff strategy. For high volatility stocks, at the money spreads are approximately like European binary options. For low volatility stocks they are more like leveraged covered calls.

2018-01-12 16:25:27 UTC

If the market finishes the day up I believe it will be 9/10 trading days the market has gone up

2018-01-12 16:25:53 UTC

Of the last trading days *

2018-01-12 20:17:49 UTC

@Zyzz looks like we're gonna make it

2018-01-12 21:21:22 UTC

I’m up 7% in my SSO position which is WAYYY more than what I was expecting at this point in time. I am thinking if it keeps ripping like this I will lighten up on my position if it gets to the point where I am up 10%

2018-01-12 21:22:11 UTC

I am also thinking of completely selling out by May along the old adage “sell in May and go away”

2018-01-13 00:30:26 UTC

@Zyzz SSO position?

2018-01-13 00:34:07 UTC

@ThisIsChris yeah thats the 2x S&P index fund i posted about at the end of Dec.

2018-01-13 00:34:26 UTC

ohh right. Good job man, you were right you called it!

2018-01-14 18:53:53 UTC

^that is an interesting article. Energy stocks have not done well since oil fell in 2014/2015 i believe

2018-01-14 18:54:16 UTC

the pitch is essentially a swing back to commodities based on dollar weakness

2018-01-14 18:55:23 UTC

to anyone who may not be aware, commodities are denominated in dollars. All else equal, if the dollar weakens, commodities increase in price

2018-01-14 18:56:48 UTC

i am assuming they are betting the dollar to weaken on the following: 1) larger debt/deficit and 2) higher expected inflation

2018-01-14 19:46:31 UTC

@Zyzz That's interesting. I traded stocks and options a lot on USO from early January to early July in 2015. It is an ETF that trades OIL futures.

2018-01-14 23:16:20 UTC

https://www.kreditopferhilfe.net/docs/S_and_P__Repeat_After_Me_8_14_13.pdf
Paper by Standard and Poor’s about QE and Bank Reserves I found interesting. Academic, not investment advice

2018-01-16 21:16:36 UTC

OMG the blood across the board. Oh the humanity!

2018-01-17 01:22:33 UTC

Does anyone have a good review sheet for the Series 66? :)

2018-01-17 04:55:37 UTC

@SamanthaM no I don't but are you taking it? That would be very cool, my dad wound up taking it, it wasn't his job but trading has always been a passion of his

2018-01-17 05:59:51 UTC

Anyone here have thoughts on XLK vs SPY?? Right now I have SPY buy I'm thinking of selling it all and getting XLK instead. They move pretty similar except XLK goes up more

https://cdn.discordapp.com/attachments/352760194775777282/403065866251534336/Screenshot_20180117-005931.png

2018-01-17 06:00:01 UTC
2018-01-17 13:10:13 UTC

@ThisIsChris I dont have a firm convictions on Tech one way or the other. Generally speaking it is a good sector to get into as I think productivity gains in the economy (something we really havent had much of since pre-recession) are long overdue and lower amounts of immigrants (esp. in low skill occupations) will drive that. Sectors I think will do well are financials, industrials, and energy amongst others

2018-01-17 15:57:38 UTC

@ThisIsChris I'm taking it on Friday. Feeling ok about it because it's mainly the same info as the 7. Stuck on requirements for registration and termination. Was your father a day trader?

2018-01-17 19:55:45 UTC

@SamanthaM No, and now that I think of it he may have just taken the 7, I don't remember. It was something he did about 15 years ago just because he's been passionate about the stock market, but he was a school teacher. Idk if it's weird to not be a professional trader and be active in the stock market, but I remember sitting on his knee as a kid and he'd show me the charts and stuff on Ameritrade or something at the time. Ameritrade, TD, not sure now

2018-01-17 19:56:12 UTC

He's actually retired now and does a little currency trading for a few hours in the morning

2018-01-18 00:39:26 UTC

@Zyzz >I dont have a firm convictions on Tech one way or the other. Generally speaking it is a good sector to get into as I think productivity gains in the economy are long overdue and lower amounts of immigrants

Also, tech is the least regulated sector by far.

2018-01-18 00:40:10 UTC

The equity market P/E ratio keeps climbing higher and higher

https://cdn.discordapp.com/attachments/352760194775777282/403347803176435714/unknown.png

2018-01-19 17:46:08 UTC

NVDA hit 230 today. I was reading a bunch of analyst reports on NVDA, the highest prediction I read was 230. I'll have to go back and see if the reasoning looked sound or if it was just dumb luck

2018-01-19 19:06:23 UTC

@here just a generic and friendly reminder to not risk money you can't lose. Also that no one here has a crystal ball and unforseen risks can arise.

2018-01-19 23:10:51 UTC

What banks don't echo?

2018-01-19 23:11:09 UTC

lehman brothers used to be known as the catholic investment bank

2018-01-19 23:15:25 UTC

Wells Fargo looks safe

2018-01-20 00:09:07 UTC

@Zyzz are you sure you aren’t talking about Merrill Lynch

2018-01-20 00:09:38 UTC

@Rogue#0890 join a credit union that’s part of the co-op network

2018-01-20 00:09:44 UTC

@Rogue#0890

2018-01-20 01:56:35 UTC

@Deleted User I could be mistaken but I do believe it was Lehman

2018-01-20 02:33:25 UTC

I do all of my banking online with Fidelity Investments.

2018-01-20 02:33:39 UTC

Their debit card waives all ATM fees

2018-01-20 02:34:14 UTC

And I use AmEx BlueBird if I ever need to do cash deposit (rarely)

2018-01-20 02:36:00 UTC

Fidelity was founded by Edward Johnson and still maintained by the family.

2018-01-20 05:37:46 UTC
2018-01-20 18:31:24 UTC

@Deleted User Could you explain the pros and cons of a Credit Union over a bank?

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