Message from @DCViking

Discord ID: 395717799487733761


2017-12-24 13:50:41 UTC  

@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

2017-12-24 18:12:48 UTC  

@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?

2017-12-25 01:14:22 UTC  

Also, 2008 is not as bad as it could get. It could get much worse.

2017-12-25 01:18:37 UTC  

True but hard to grapple with mentally, wasn't 2008 the biggest recession since the Great Depression?

2017-12-25 02:17:54 UTC  

@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.

2017-12-25 02:19:22 UTC  

Does anyone know why I cant C+P from word?

2017-12-25 02:19:39 UTC  

not trying to retype all of that

2017-12-25 02:23:31 UTC  

@Zyzz you're on your computer, right? From Word on your computer to Discord?

2017-12-25 02:24:54 UTC  

yes

2017-12-25 02:28:28 UTC  

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.

2017-12-25 02:28:41 UTC  

I was able to do it on my phone

2017-12-27 23:12:40 UTC  

@everyone if you have any interest in investing in 2018 read the below:

2017-12-27 23:12:52 UTC  

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.

2017-12-27 23:15:53 UTC  

Something to watch also, Dominion energy as a long play

2017-12-27 23:16:02 UTC  

whats your thesis?

2017-12-27 23:16:52 UTC  

new facility built in cove point that exports natural gas from fracking in PA

2017-12-27 23:17:20 UTC  

The pipelines already existed as import lines

2017-12-27 23:17:30 UTC  

but are now being used to export to Japan

2017-12-27 23:18:56 UTC  

Cabot Oil and Gas contracted with Sumitomo corp and Tokyo Gas

2017-12-27 23:19:48 UTC  

selling 350,000 million British thermal units of shale gas per day for 20 years

2017-12-27 23:21:15 UTC  

@Deleted User What’s the ticker symbol?

2017-12-27 23:21:19 UTC  

D

2017-12-27 23:21:37 UTC  

Thanks!

2017-12-27 23:34:50 UTC  

@here Just a generic but friendly reminder not to risk money you can't lose

2017-12-27 23:36:23 UTC  

2017-12-27 23:42:38 UTC  

@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?

2017-12-27 23:50:05 UTC  

@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?

2017-12-27 23:51:38 UTC  

in regards to options...

2017-12-27 23:54:00 UTC  

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

2017-12-28 00:12:30 UTC  

@Zyzz Thanks. Yeah just wondering.

2017-12-28 05:29:04 UTC  

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.

2017-12-28 05:29:46 UTC  

I’m concerned that they could manipulate the interest rate to take the wind out of Trump’s sails.

2017-12-28 05:30:46 UTC  

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.

2017-12-28 05:35:20 UTC  

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.

2017-12-28 05:41:50 UTC  

@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

2017-12-28 05:44:31 UTC  

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.

2017-12-28 05:45:14 UTC  

yes we will have to watch for the cadence of rate increases

2017-12-28 05:47:58 UTC  

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.

2017-12-28 05:49:08 UTC  

I’m always reminded of my favorite quote, “there are no markets anymore, only manipulations.”

2017-12-28 10:09:49 UTC  

I do feel lonely being the only one trading options here

2017-12-28 10:10:26 UTC  

If you like thinking about volatility and time value then they are very interesting.