Early Retirement Extreme Forums

Quantity of money is only one part of inflation, you also have to take into account velocity of money and quantity of goods or services.

I would hedge with puts to protect from a black swan event. SPY has very liquid options. Figure out what percent of the dividend you would like to spend on puts. For 20% of yearly dividends you could hedge for a year at the 110 strike. Might help psychologically knowing your max loss would be a ...

bought IBM. 7+% free cash flow yield. Next year earnings estimates fell to 16.83 after last earnings release. Even so it still trades with a PE of 9.6 next year estimates. Net income before extraordinaries has been flat last few years. EPS have still gone up though because of the buybacks. Recently ...

I'd go with paying off the loan.

I'm guessing banks and energy will outperform in 2014/2015 period. They should hold up better in a tightening environment.

@workathome Does that pe of 18 take into account that the larger companies represent a much larger percentage the s&p? Seems to me the market cap weighted pe would be lower.

@GandK

printing money = fed buying securities
destroying money = fed selling securities

When the FED sells securities into the market that is considered destroying money since they are taking dollars out of circulation.

This book is spot on. I've known most of it for some time now.

@jennypenny It's my understanding that in order to keep the system going, the total credit market debt needs to keep growing. http://research.stlouisfed.org/fred2/gr ... cales=Left

Just found you can buy KMR instead of KMP and avoid tax hassles also.

Been looking into MLP's, specifically KMP and WPZ. So far they look pretty ideal for an ERE person looking for current income. One downside I keep seeing people bring up is the distributions are reported on a k-1. According to this page, http://b-i.forbesimg.com/phildemuth/files/2013/08/MLP-Tax.jpg ...

@thebbqguy

Obviously the fund would drop in price but won't the distribution payment go up over time as the fund re investments principle in new debt?

The problem with a balanced budget in a debt based money system is that eventually you need to create more money just there is enough money in the system to pay interest on debt.

Even in a perfect scenario where all the base money is lent out 10 to 1, a balanced budget will only make it so far ...

@Riggerjack

Most likely not raising the debt ceiling would cause the economy to go back into contraction. Since we have a debt money system the total debt in the system needs to keep growing. Right now I don't believe that debt is expanding enough in private sector to offset a balanced budget at ...

Ok, lets say I agree with his hypothesis 100%. That still doesn't answer how we get out of the spiral of growing debt. There has to be a ceiling, it can't possibly go on forever. At some point, even if we're borrowing at 0%, there will reach a time when our bond payments will be larger than the ...

Felix you are absolutely correct. Nicely summed up

Just sold a put on POT. September 36 for .74 Wouldn't mind the shares at $35.26 anyways, would be 4% yield in a solid company. Otherwise the $74 in premium just about takes care of property taxes for a month.

@chicago81 that's true, but if you are long the stock you have more downside risk anyways without the covered call.

@workathome I keep track of everything and I've definitely made more off premiums collected than missed out on capital gains.

I'm more of a fan of doing bull put spreads on sector ...

Been doing this for years and it has been working very well to generate extra income. Missed out on some big capital gains a few times though but that's the risk you take.

Just bought some OXY. Kinda hoping for the market to come down more to buy back in.