Investments Trade Log

Ask your investment, budget, and other money related questions here
2Birds1Stone
Posts: 1085
Joined: Thu Nov 19, 2015 11:20 am
Location: Earth

Re: Investments Trade Log

Post by 2Birds1Stone »

Mister Imperceptible wrote:
Fri Jul 31, 2020 11:54 am
Pretty sure global GDP is collapsing, not just USA
Looks like EU's contraction was 1/3 the USA's....if you believe the reported figures.

The problem I see, is while economic activity dropped drastically in many sectors, the smaller mom and pop shops suffered, while many of the Megacrorps flourished because that is where people parted with their dollars.....so most of the large cap stocks were neutral or even benefited from this (a la Costco/Walmart/Amazon etc).

Seppia
Posts: 1457
Joined: Tue Aug 30, 2016 9:34 am
Location: Italy

Re: Investments Trade Log

Post by Seppia »

2Birds1Stone wrote:
Fri Jul 31, 2020 2:49 pm
Looks like EU's contraction was 1/3 the USA's....if you believe the reported figures.
Usually the USA system crashes harder but restarts faster. Europe, with all the safety nets, usually is able to soften the blow of sudden crisis in exchange for lower long term growth/some inefficiency.

It's better to be in the USA during boom times, and in Europe in bad times.
Mister Imperceptible wrote:
Fri Jul 31, 2020 2:43 pm
Notice how slow the government is to agree to a new stimulus package when its plebs-only. Now suddenly the deficit matters again.
Sorry for the political tangent, but the Republican party has a history of caring about the deficit with... uh... erratic consistency. I'd say since 2008 give or take.

Spending to revive the economy after the GFC and with a D president --> ARE YOU CRAZY? WHAT ABOUT THE BUDGETS (see: Paul Ryan, fiscal conservative)
Massive deficit expoding tax cut after a 10 year economic expansion with a R president --> all cool!

and now the two completely incoherent attitudes in just a couple months

Hopefully the guys at the Lincoln Project succeed
/tangent

George the original one
Posts: 5353
Joined: Wed Jul 28, 2010 3:28 am
Location: Wettest corner of Orygun

Re: Investments Trade Log

Post by George the original one »

Seppia wrote:
Fri Jul 31, 2020 4:12 pm
Sorry for the political tangent, but the Republican party has a history of caring about the deficit with... uh... erratic consistency. I'd say since 2008 give or take.
Think you're off by a few decades ;)

It's a talking point that always loses to reality, since at least the Reagan years. Under Trump, it's not even a talking point.

shemp
Posts: 105
Joined: Wed Jun 12, 2019 11:17 am

Re: Investments Trade Log

Post by shemp »

Corporate profit = Corporate investment + Corporate dividends – Household savings + Government deficit – Trade deficit

Kalecki/Levy profits equation is accounting identity, so true by definition. Recent increase in government deficit outweighs changes in other factors. Equation doesn't distinguish private from public corporations. My impression is profit damage to smaller private corporations will be worse than average, so larger public corporations will do better than average, again by accounting identity. So late 2020 and early 2021 public corporation profits should be huge. It's possible all those profits will be hoarded, so continued big government deficits will be needed to keep the system going.

shemp
Posts: 105
Joined: Wed Jun 12, 2019 11:17 am

Re: Investments Trade Log

Post by shemp »

https://www.epsilontheory.com/the-grift ... r-1-kodak/

Great piece about Kodak. Lends support to Project Zimbabwe theory.

[Edit:] After reading the above, read the following, for a good laugh:

https://adventuresincapitalism.com/2016 ... o-hillary/

"...Almost everyone in Hillary’s inner circle—including her—is under some form of criminal investigation. She’s one of the most crooked people to ever run for President of this country, but where’s the reporting on this?..."

https://adventuresincapitalism.com/2016 ... ca-part-i/

"...There are going to be huge winners ... in Trump’s America. If you can figure it out before it happens, fortunes can be made...."

_bb_
Posts: 35
Joined: Thu Nov 22, 2018 7:58 pm
Location: Canada

Re: Investments Trade Log

Post by _bb_ »

@shemp - thanks for sharing. All I can do regarding Kodak is shake my head, non-recourse, non-secured loans and an 8 year time horizon?!?

There were many funny points of hindsight in both of the follow-up articles; related to the markets this line stood out to me, "Before the election, all asset classes moved in unison to Central Bank printing. Now policy changes will bring back prosperity—the Central Bankers will matter less."

Have we seen a change from the status quo? Within my limited scope of understanding, the CB's (at least the US Fed) has come to matter more. It seems like assets are still moving in unison with CB printing, however at a more accelerated rate. In my view, the role of the CB has been amplified in a negative way to bring more fragility to the system.

User avatar
Lemur
Posts: 682
Joined: Sun Jun 12, 2016 1:40 am

Re: Investments Trade Log

Post by Lemur »

Intel down 15% this morning. They basically declared they lost the chip war. In doing so, that is partially one of the reasons AMD shot up 10% today. If AMD stays above $65 today, then my shares get called away because I had some covered calls on them. My cost basis on AMD is $51 per share. I'll net a good profit and will probably want to buy back in by selling puts but also divesting some of the profits away to PLUG since I'm overweight AMD now and I want to build up my PLUG position.
How lucky :D
https://finance.yahoo.com/quote/PLUG?p= ... c=fin-srch

Up 17% today. I have covered CALLS at $9.50 and $10.00 expiring end of August. Stock is at $9.00 flat. I'm already up 25% by cost-basis.

User avatar
Lemur
Posts: 682
Joined: Sun Jun 12, 2016 1:40 am

Re: Investments Trade Log

Post by Lemur »

Another one of my portofilo's stocks popped again today. This time SQ. I'm trading away gains on that too with covered calls..but still will end up with 20% or so profits if gains are realized.

Personal Return January 1 to Today: 16.28%
S&P 500 Total Return YTD: 3.63%
https://www.ytdreturn.com/on-s-p-500/

Despite my strategy having a few unlucky holes (trading away gains), my gains in short-positions have vastly overcome those and I'm crushing it by this benchmark comparing to the S&P 500 total return.

User avatar
Lemur
Posts: 682
Joined: Sun Jun 12, 2016 1:40 am

Re: Investments Trade Log

Post by Lemur »

Decided not to let my SQ shares go because I'm still very bullish on this company that just had earnings. I've noticed in recent tech earnings calls that there is always a second pop that occurs the day after earnings as well. Lets see if I predicated this right... so this is the first time I have rolled up my options:


Square Price Today: $153.00
Buy to close $140.00 CALL Contract = $16.40 * 100 = $1,640 Loss
Sell Covered Call at $160.00 = $6.00 * 100 = $600 Gain
Net = -$1,040 Loss + 433 premium from $140 call = $-607
Gains protected from $140 to $153 = $1300.00
---------------------------------------------
Net = $693

Because that final net was positive, I'm thinking this is what they would deem a successful roll-up to be worth it to do this sort of transaction. Lets see how this one plays out.

Edit: This is actually very risky on second thoughts because if the stock falls, I will lose the amount that the stock could go down by plus the amount paid for the roll ($1,040). If anything, I would actually need SQ to reach $160.00 for this to have been worth the small $260 price gained or just stay above ~150 in the long-run via 140 + debit cost-basis. In the future, what I should've done is try to roll-out to the same strike for a net credit.

Edit 2:Also forgot to take into account the original premium made. More like I need the stock to stay above about $145ish.

Seppia
Posts: 1457
Joined: Tue Aug 30, 2016 9:34 am
Location: Italy

Re: Investments Trade Log

Post by Seppia »

I mean it’s only valued 150 times forward earnings and 12.5 times sales so no way it’s overvalued.
There are many things I know I don’t understand, but the USA stock market in 2020 really leaves me with a massive “????????” above my head

Seppia
Posts: 1457
Joined: Tue Aug 30, 2016 9:34 am
Location: Italy

Re: Investments Trade Log

Post by Seppia »

Would you pay a lemonade stand that’s making $1 per year $150?

If the answer is no, and still you’re willing to buy the business, you’re speculating. Which is ok of course.

Mister Imperceptible
Posts: 1340
Joined: Fri Nov 10, 2017 4:18 pm

Re: Investments Trade Log

Post by Mister Imperceptible »

But as soon as the highest bid for the lemonade stand drops to $110, Daddy will step in and offer to buy it for $155 to maintain price stability so let me buy at $150 to front run Daddy. As long as Daddy is there forever and never loses his job or runs away with the babysitter or dies it’s ok.

User avatar
Lemur
Posts: 682
Joined: Sun Jun 12, 2016 1:40 am

Re: Investments Trade Log

Post by Lemur »

@Seppia

Doesn’t make sense to me either but the sentiment is going to keep driving up the price so I’m gonna ride the roller coaster up. Sure it might come crashing down but I still will be ahead then if I just sat on the sidelines holding cash.

Market is being driven by...

1.) No where else to put money.
2.) Cheap borrowing.
3.) Recession already priced in.
4.) Money printer go brrr.
5.) Probably another tech bubble.

My finance degree says nothing is worth buying in this market. But school is not reality...

User avatar
Lemur
Posts: 682
Joined: Sun Jun 12, 2016 1:40 am

Re: Investments Trade Log

Post by Lemur »

NKLA...A company with $30k quarterly revenues but valued at $12B. OTM Long Puts looking real tempting....

shemp
Posts: 105
Joined: Wed Jun 12, 2019 11:17 am

Re: Investments Trade Log

Post by shemp »

There's two markets. Regular market is driven by factors 1-4. Ordinary companies are reasonably priced, assuming economy eventually recovers. Maybe even cheap, given that fiscal stimulus will cause profits explosion if pent up demand is ever released. Nothing bubbly about KO (Coca-Cola) for example. Then there's tech, which has been bubbly since 2017.

I'm convinced there will be better treatments for covid-19 soon, which will allow some normalization. And I predict more fiscal stimulus and eventual consumer price inflation. Fiscal austerity to control inflation is politically difficult, so path of least resistance is allow 5% inflation for several years and use monetary policy (higher interest rates) to keep inflation from soaring higher. Higher interest rates will have negative impact on all long duration asset prices. Cash will not be much of a refuge because interest rates will be only slightly positive in real terms and most investors are subject to high tax rates on interest income.

I think low P/E and high dividend "value" stocks will fare best overall, and that's where I have most of my money. Lower P/E = shorter duration. P/E of 1 and dividend rate of 100% (business that is closing down) is equivalent to zero-duration cash. Gold equivalent to infinite maturity 0% coupon inflation-protected bond, so very long duration. High P/E stocks also very long duration.

ertyu
Posts: 1005
Joined: Sun Nov 13, 2016 2:31 am

Re: Investments Trade Log

Post by ertyu »

Lemur wrote:
Wed Aug 05, 2020 10:54 pm
NKLA...A company with $30k quarterly revenues but valued at $12B. OTM Long Puts looking real tempting....
They're literally running the same scam as tsla. it even says so on the name :lol:

User avatar
Lemur
Posts: 682
Joined: Sun Jun 12, 2016 1:40 am

Re: Investments Trade Log

Post by Lemur »

@Ertyu

We are in a new stage of irrational exuberance.....
https://www.cnbc.com/2020/08/05/nikolas ... idappshare

Seppia
Posts: 1457
Joined: Tue Aug 30, 2016 9:34 am
Location: Italy

Re: Investments Trade Log

Post by Seppia »

I really enjoy Kuppy's posts, here's the latest
https://adventuresincapitalism.com/2020 ... -zimbabwe/

User avatar
Lemur
Posts: 682
Joined: Sun Jun 12, 2016 1:40 am

Re: Investments Trade Log

Post by Lemur »

@Seppia

Thanks for that article. Its a great reminder of why not to SHORT. Companies can in fact remain fraudulent longer then one can remain solvent. Nothing makes sense in this market...the obvious doesn't seem so obvious anymore. I am on some sort of killer lucky streak though...Plug is up 7% before hours again and like I guessed the AMD party is still on. I'm past the strike price for covered calls AGAIN on PLUG. Ever since the AMD situation I've been doing a lot of reading into options again....AMD, SQ, and now PLUG I'm profiting greatly from but in every scenario I'm losing gains due to my CCs.

I understand now why stock traders use the vertical bull spread on growth stocks...a vertical bull spread is when one buys a call and sells a call at the same expiration date. The long position is the lower strike price, the short position is the higher strike price. In this way the cost of the long position is partially offset by the premium collected from the short position. There are 4 different scenarios that can happen:

Scenario 1 (Stock Trades Upwards): Stock price rises up to almost the short position strike price by expiration. One profits from the long call and keeps the premium from the short call.

Scenario 2 (Stock Trades Sideways): Stock trades sideways and ends up at the long call break-even price (Strike price of long position + Cost). You break-even on the long but keep the short premium.

Scenario 3 (Stock Trades down): Stock price tanks below long call strike price.Your long call expires worthless but your short-call premium is kept.

Scenario 4 (Stock Moons): Stock moons and blows past your short call strike price. You profit more off the long-call as the price rises but the short call caps gains. If one has covered calls, the shares get sold.

I would have made a lot more money had I used vertical spreads on AMD, SQ, and PLUG. Up until this point, I've only been selling CC. The extra money I would've made from those CALLS probably would have helped me more easily buy back in too or buy something else.

Note* You could do the vertical spreads without technically owning the stock if your brokerage allows you too. The benefit of owning the stock in a vertical spread is being able to profit greatly if you set the short position above your cost-basis; the profits from the long-call could help you buy back in when you sell for a profit and want to buy back in.

Edit: On further reading...there is bit more to vertical call spreads that I had originally imagined. One must read more on intrinsic vs extrinsic value in options.

biaggio
Posts: 10
Joined: Sun Apr 23, 2017 5:31 am

Re: Investments Trade Log

Post by biaggio »

What is your view on big oil as a long term investment (for dividends) at current prices? I don't see oil going away anytime soon; the shift away from fossil fuels will be gradual and the big companies will try to adapt.

Post Reply