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Tony Montana posted:There is nothing smug about what I'm saying, it's smug to you because you don't like it, I'm just stating the differences between the US and Aus but you take it as insult. I'm not insulted -- I'm Canadian, not American, and we are also facing a devastating housing bubble in the near future. We have plenty of real estate apologists here saying that Canada is unique (using arguments very similar to yours).
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Feb 25, 2014 00:16
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Tony Montana posted:One of the major players in Japan's collapse was the ease of obtaining credit, I guess it's a version of the sub prime. The Four Pillars talks about this as one of the ingredients of any bubble. Australia's banking and finance industry is well regulated. You are required to have a significant deposit and demonstrable earning capacity to get a home loan. That is one example where it is different from the US and Japan. I've never really looked hard into the current Aussie situation versus Japan in the late 80s/90s, I'll look into it more and see if I can find more differences. An ingredient, not the ingredient. Consider the commodities bubble after the housing collapse. That certainly wasn't caused by an ease of obtaining credit. quote:However, your assertion that Australia is facing imminent economic collapse I'd like to hear more of your 'evidence' about. I never made such an assertion. I was merely trying to highlight the similarities between your statements and those who bought into the US housing market not being a bubble. In hindsight the people flipping houses in 2007 were idiots, but it certainly didn't appear to be so to those doing it at that time. Tony Montana posted:I'm not ignoring anyone, which is perhaps the problem. I've read a lot of analysis on the Aussie property market in the last few months and come to the conclusion that it being a bubble isn't written in stone. I'm just interested to hear the reasoning behind this assertion. If you're embarrassed for me, that's fine, I'm more interested in learning and insight than my Internet credibility. Here's another analysis to read: http://www.amazon.com/Are-Missing-Real-Estate-Boom-ebook/dp/B000FCK0HG/
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Feb 25, 2014 00:19
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blah_blah posted:I'm not insulted -- I'm Canadian, not American, and we are also facing a devastating housing bubble in the near future. We have plenty of real estate apologists here saying that Canada is unique (using arguments very similar to yours). I'd like nothing more than for it to happen, the bubble burst. I've got some money and I'd love hear about it on the other side of the world, catch a plane back home and buy a place cheap while people (like my sister unfortunately) have a ridiculous debt they'll be paying off for decades. I guess ETFs mean I can hedge, get a return now and if it does happen then I've got money on hand to capitalize. ohgodwhat posted:stuff Thanks, I will certainly eat this stuff up  You know another thing about Aussie property is the ridiculous amount that has been bought by speculators as opposed to homeowners.. negative gearing is a very Aussie thing that if you can be bothered reading about is a unique and kind of hosed up way that Aussie property works. edit: \/\/ because you know it's the only one I've read yet. Japan book looks great, cheers. Tony Montana fucked around with this message at 00:30 on Feb 25, 2014 |
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Feb 25, 2014 00:22
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i am tired of hearing about the Four Pillars here's a Japan book: http://www.amazon.com/The-Holy-Grail-Macroeconomics-Recession/dp/0470824948
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Feb 25, 2014 00:26
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Tony Montana posted:Thanks, I will certainly eat this stuff up No worries. A lot of people are down on you, and honestly rightfully so. There were a ton of people saying "this time it'll be different!" and had equally reasonable explanations as to why back in 2006, but clearly it wasn't significantly different than past bubbles. That's why saying something that looks like a bubble, walks like a bubble and quacks like a bubble, has a pretty high standard to top if people want to take it seriously when you say it isn't a bubble.
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Feb 25, 2014 00:32
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semicolonsrock posted:
Bhaal fucked around with this message at 01:13 on Feb 25, 2014 |
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Feb 25, 2014 01:05
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The best place I found if you want to get downloadable fundamental data is YCharts, but it costs $200/mo for CSV export.
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Feb 25, 2014 01:09
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How much additional research do you do before buying options? What additional things do you do before determining how you'll purchase the option?
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Feb 25, 2014 01:11
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Tony Montana posted:I'd like nothing more than for it to happen, the bubble burst. I've got some money and I'd love hear about it on the other side of the world, catch a plane back home and buy a place cheap while people (like my sister unfortunately) have a ridiculous debt they'll be paying off for decades. I guess ETFs mean I can hedge, get a return now and if it does happen then I've got money on hand to capitalize. I don't know what you're trying to say now. It seems like you're willing to admit that Aussie properties are approaching bubble territory. Negative gearing sounds a lot like what dummies were doing in the mid 2000s here in the states: buying property they can't afford with the hope of flipping it to the next dummy. Honestly after your "The Australian dollar is real" and US dollar parity comments were called out, I'm shocked you're still posting. I'm far from an expert, but I've been involved in finance for over 7 years - and I still know there are times when I need to fold the tents and realize I'm out of my depth. You need to take a breather and really study what you're talking about. You've touched on Forex, real estate, stocks, bonds... no one has the expertise to make the kind of weirdly sweeping statements you're making in this thread on all of these topics. I'm actually bullish on Australia and think the housing bubble could inflate further because it's such a weird localized real estate market and a lot of the growth is fueled by the secular commodity bull market (which I think will resume sooner rather than later). But NO ASSET IN WORLD HISTORY sees the kind of price appreciation we're seeing in Australian RE without eventual major corrections to the downside. The fact that Australia is small and localized supports the idea that we'll see a huge downtrend as opposed to a general softening. Your major cities are all seeing Vegas/Miami 2006 era type price appreciation. I think we'll see Vegas/Miami 2009 type corrections too.
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Feb 25, 2014 01:35
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Are there good ways to hedge against real estate dropping off? My house represents a big commitment to Canadian real estate that I wouldn't be comfortable with other than the fact that I need to live in it. I notice some hedge funds popping up that attempt to bet against real estate indirectly - shorting companies they figure would lose the hardest, and what not. Any other options here, short of exiting (which isn't really viable)?
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Feb 25, 2014 02:39
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jmzero posted:Are there good ways to hedge against real estate dropping off? My house represents a big commitment to Canadian real estate that I wouldn't be comfortable with other than the fact that I need to live in it. This gets into the whole idea of "buying a house to live in it." A house shouldn't be looked at as an investment unless you're a professional real estate developer or landlord. My wife and I were lucky enough to buy in the fall of 2012, near the lowest of the lows in terms of price and borrowing rates - but we don't look at our house as an investment. It's not producing cash flow in the form of interest, rent, royalties or other distributions. It's a place to live. It's a liability. Taxes in Vermont (where we live) are expensive. Repairs from harsh Vermont winters are expensive. Heating this place when we get a -20 cold snap for a week at a time is expensive. With all those costs, our living expenses from when we were renting increased - but not by much. We plan on living here for the long term, so we kinda don't care if prices drop off a cliff. In fact, if prices do drop off a cliff, we'll get a re-appraisal and see our tax bill drop too. You hedge against real estate bear markets by buying a house at a price you can afford and living in it for a long period of time. You put down 20% or more. You don't treat your house like some kind of magical infinity piggy bank to leverage yourself.
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Feb 25, 2014 02:57
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A hedge bet on your house would be someone else buying your house now (and paying you now), but you not actually selling it to them until a later time, protecting you against drops in value. Its not practical. No one is going to give you hundreds of thousands of dollars and get nothing liquid in return.
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Feb 25, 2014 04:27
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Could you short some REITs?
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Feb 25, 2014 04:58
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Leperflesh posted:Could you short some REITs? I guess, but if you had serious money sitting outside of your house (and loan) to short REITs enough to hedge your house, you should probably just put it into your mortgage and not be paying interest on that.
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Feb 25, 2014 05:49
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Reverse mortgage. Historically housing has been a poor investment unless you specialize in it; a contractor flipping houses or investing in rental properties. It's only changed in the last two decades or so. Prices are still limited by wages. They can't move up unless wages are moving up or some specific event occurs to change the community dynamics. Why would you pay off a mortgage if you have one at anywhere close to present day rates? That's pretty much free money.
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Feb 25, 2014 06:47
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I know it's not really trading per se, but as most probably know Mt.Gox, the main bitcoin exchange, evaporated and several hundred million dollars worth of bitcoins went with it. If you need a reminder of why you should have stops in place, hedge, avoid leverage, and diversify your investments this thread of people who literally lost millions on this might be worth scanning through: http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_story_thread_how_much_did_you_lose/ the bitcoin thread is of course yukking it up but i feel pretty bad for people despite how stupid they were.
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Feb 25, 2014 09:29
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If someone wants to stand in front of a train and keeps doing it no matter how many times you pull them off or they see someone else get hit at some point I lose all sympathy.
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Feb 25, 2014 10:40
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nebby posted:I know it's not really trading per se, but as most probably know Mt.Gox, the main bitcoin exchange, evaporated and several hundred million dollars worth of bitcoins went with it. If you need a reminder of why you should have stops in place, hedge, avoid leverage, and diversify your investments this thread of people who literally lost millions on this might be worth scanning through: I lost sympathy for bitcoiners a long time ago. It was a disaster waiting to happen.
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Feb 25, 2014 10:54
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Speaking of Australian housing, here's a great read: http://www.smh.com.au/business/the-history-of-australian-property-prices-20130213-2ec85.html The conclusion: quote:Unsurprisingly, the cause for the massive rise in housing prices and land values, along with net rental income losses, is the colossal increase in household debt, primarily composed of mortgage debt. It has more than quadrupled since 1988, rapidly accelerating during the '90s and 2000s. The ratio peaked in 2010, as did housing prices, which is clearly no coincidence.
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Feb 25, 2014 15:23
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LNKD going crazy this morning  and TSLA probably going to hit $250.edit: LNKD looking toppy and finally sold it, especially with S&P futures dropping. Acquilae fucked around with this message at 16:03 on Feb 25, 2014 |
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Feb 25, 2014 15:45
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Acquilae posted:LNKD going crazy this morning  (never got into the options  )
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Feb 25, 2014 16:42
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Haha Tesla. Year-to-date I'm up 20% on my stock portfolio. Since this is a guarantee that it will continue that way forever, extrapolating forward, I'll be rich in only a few more years! This plan cannot fail!
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Feb 25, 2014 16:47
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poisonpill posted:How much additional research do you do before buying options? What additional things do you do before determining how you'll purchase the option? Are you talking about buying options vs common shares, and what's the additional considerations? There's, um, a lot. Buying options introduces whole new elements of timing, extrinsic value (which is a function of time and antici....pation), and new margin risks plus assignment risk (assignment is when an option you wrote/sold to somebody gets called up to do the thing you wrote you would do). There are tons of things to consider, like: -If you are long an option, its extrinsic value (the "premium," sometimes inappropriately called the "time value") will decay over time -If you go short an option, margin and risk of assignment. Also watch out for dividend dates. -Extrinsic value might be inflated in advance of an event like earnings Position sizing is also a different animal because you have to imagine that you might lose it all. When you buy common shares, it's more like "okay if this drops like 10% I'll sell it and no big deal, I only lost 10% of my investment which I find acceptable." When you buy a call and the stock drops 10%, you might lose like 90% of what you invested. So you buy smaller positions, which works out anyway cause you get a lot more leverage on that smaller amount. All that being said, if you're bullish on a stock in the near/intermediate term, buying an appropriately sized position in calls that are far-out in expiration (like 1+ year) and at- or in-the-money... is not that much more complicated than buying the stock itself, except that you're putting a 6-12 month time limit on your bullishness. But the closer you get in expiration, the more "right" you have to be on the timing aspect. Anyway if I interpret your question right, it's a big enough question that there are entire books on it, I've just listed a few considerations here. Another way to learn some of this stuff is to play around in an options position simulator for some actual stocks you follow, and play around with things like "if I buy a May 70 call, and the stock just sits at its current price for another month, how much do I lose? Then what happens if in late April the stock price jumps to like 75?" You may be surprised at some of the results, like in that example you might still end up at a loss. Also play around with some simple option spreads, like vertical spreads and calendar spreads. Playing around with this for a while is a good way to at least introduce yourself to some of the stuff you have to consider about options.
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Feb 25, 2014 16:52
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Tesla, we hope to sell 30K cars a year, we have a market cap higher then FIAT and Mazda combined. Why do I ignore these bubble hype stocks instead of just riding the wave to piles of money. I have a dumbness problem.
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Feb 25, 2014 16:55
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alnilam posted:Another way to learn some of this stuff is to play around in an options position simulator for some actual stocks you follow, and play around with things like "if I buy a May 70 call, and the stock just sits at its current price for another month, how much do I lose? Then what happens if in late April the stock price jumps to like 75?" You may be surprised at some of the results, like in that example you might still end up at a loss. Also play around with some simple option spreads, like vertical spreads and calendar spreads. I would add that this is dangerous in the sense that in the real world there are a lot more variables that come into play, and a simulator can be misleading. Some of the complicating factors in particular are changes in implied volatility, fees (both in the form of commissions and bid/ask spreads), and margin requirements. None of these things will show up realistically in a position simulator. Sure you can play around with implied volatility changes, but the simulator will not be able to tell you what kinds of changes will occur in different situations. To give an example of this, an experienced options trader would understand that a calendar spread is dangerous to carry over the timeframe of an earnings announcement, because the implied volatility drop after such an event will crush much of the potential profit of such a trade. Looking at a simulator, such a factor is not intuitively visible. Depending on what you want to use it for, options trading is not always risky, but it can definitely be much more complicated.
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Feb 25, 2014 17:11
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I manually got out of TSLA at 212 from 61 instead of letting my trailing limit work as I used to. Past 3 times I was in Telsa there was always a large pullback that dumped me out with my trigger. The one time I decide to not let it ride and Im out $38/share profit on top of what I already had. Oh well, hindsight and all, still a healthy gain!
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Feb 25, 2014 17:13
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alnilam posted:Great answer Wow, that definitely answers my question. I was hoping to be able to leverage the high volatility I think is coming, but it sounds much, much more complicated than I was thinking. I know a guy who was a very good long term buyer who took a bath thinking he could do more buying calls; it sounds like a much bigger gamble. My thinking tracks what you were saying, that 12-month in the money calls (or puts) seems like a good way to make more if your predictions are right; but there is a lot more to it than I had anticipated. God, I hadn't even thought about factoring dividend schedules into calls. I've got a few books coming my way on the topic, but I'm not sure how much I want to lean on them, since as you and flowinprose said, it gets very complicated, which makes it much more likely that you'll miss something, which makes it much closer to gambling than I'd like.
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Feb 25, 2014 18:09
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poisonpill posted:Wow, that definitely answers my question. I was hoping to be able to leverage the high volatility I think is coming, but it sounds much, much more complicated than I was thinking. I know a guy who was a very good long term buyer who took a bath thinking he could do more buying calls; it sounds like a much bigger gamble. Options are a little more gambling-like than trading common stocks.\ As much as some posters here like to say "might as well go to vegas lol," neither stock nor option trading are akin to going to a casino IMO. But trading options is somewhat riskier, or at least entails a different kind of risk, than trading shares, and is more gambling-like in that regard. Anyway didn't mean to scare you off entirely, and honestly I got my start with buying far-out calls, which like I said are not much more complicated than owning common shares as long as you pay attention within a 6-month time frame. Then eventually I started looking at what other spreads were built in to my trading platform, and I'd look them up on the internet for some introductory reading, use the trading platform to simulate the profit/loss profiles over time (the "over time" part is important), and much later learned some of the nuances of how an event like earnings might affect that profit/loss profile. I guess my point is, it's complicated and you should read about it, and also dick around in a simulator thingy.
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Feb 25, 2014 18:37
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Oh, no, I haven't been scared away. I've got a long time to invest before I retire so I don't mind high risk trades right now. I'll keep reading and come back with specific questions. Thanks again for the help.
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Feb 25, 2014 20:09
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alnilam posted:Options are a little more gambling-like than trading common stocks.\ Not to nitpick, but options are not inherently riskier than any other investment. Most people just don't understand the risks. With many options trades your risks are strictly defined. There's no hidden or complicated risk in buying a call or a put. You know (or you should) that you risk the entire cost of the option. When you're selling options, your risks are somewhat undefined, but are really no different than shorting a stock, or buying a stock on margin. The only way I see options as more "gambling-like" is that premium is generally more volatile than stock prices. That makes for faster payoffs - and losses. But people gamble with penny stocks in a similar way all the time. Otherwise, options aren't any riskier - if you are aware of the risks. For instance, you wouldn't advocate someone putting 20% of their net worth into shorting one stock, or buying one stock with tons of margin. But options traders can easily find themselves in a situation where they risking 20% or more of their portfolio - by selling naked puts, for instance. They only see the premium coming in, and forget that they're on the hook for hundreds (or thousands) of shares if price moves against them. That doesn't make options riskier - it just means some people ignore the risks or don't understand them.
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Feb 25, 2014 21:37
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Dipped my toes in some FSLR calls. edit: Blarg. Got greedy and made a directional bet instead of a strangle. Oh well. Josh Lyman fucked around with this message at 22:12 on Feb 25, 2014 |
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Feb 25, 2014 21:40
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Tomorrow will be a -2% day. J/K these bulls have proven their irrationality with all the new economic data and the constant buying. Thank god it is almost May.
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Feb 25, 2014 22:00
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This is a little late but this is a nice read on the Facebook/Whatsapp deal http://aswathdamodaran.blogspot.com/2014/02/facebook-buys-whatsapp-for-19-billion.html
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Feb 26, 2014 04:46
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TSLA - are you loving kidding me? I felt smug as all hell after I sold around $180, after the dip in January. Now I feel like I"m watching NFLX in 2011. Afraid to step in front of the train, but sure this thing has to pop. And also wanting to get in for the long term, but not at these prices.
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Feb 26, 2014 14:00
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Same, I got out at 212, and this morning it looks to open at $258. I know that if I bought in at these levels I would crash it for the next 8 months. But on the bright side, we did make profits and that isnt bad.
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Feb 26, 2014 14:26
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Hey no one went broke taking profits so dont feel bad. Look what happened to the bitcoin people due to greed.
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Feb 26, 2014 14:39
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They made >100% in 6 months? (and will never see any of it ahahahaha)
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Feb 26, 2014 18:42
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District Selectman posted:TSLA - are you loving kidding me? I felt smug as all hell after I sold around $180, after the dip in January. 
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Feb 26, 2014 18:45
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Here is another interesting perspective on the Facebook/Whatsapp buyout, from a defensive move perspective. More importantly, it gives thoughts on valuation for preemptive actions. http://aswathdamodaran.blogspot.com/2014/02/if-we-dont-do-it-our-competitors-will_26.html My personal motto is if you are interested in valuation and you aren't reading everything Damodaran writes you are a dick.
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Feb 26, 2014 20:52
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I've been having fun this week buying weekly 185 SPY puts any time the S&P dawdles above 1850, and then selling down in the 1840s. Been scalping a nice 20-30% each time, so even with small investments it's been nice. I think I'm gonna quit while I'm ahead on that front, it's been several days of the S&P consolidating at that 1850 resistance, so it could either break out real soon (Janet Yellen tomorrow?) or precipitously fall. Not confident enough about the latter, considering this bonkers bull market lately, so I'm just gonna wait and see.
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Feb 26, 2014 21:25
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