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Markets still falling like whoa

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4thgenhorn

4thgenhorn 42

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41 minutes ago, ChiTownDoc said:

Love puts as a hedge.  Let’s you stay aggressive and not worry as much.  

All I know about puts is they cost a lot more than calls. I’ve sold puts, but in hind sight that was a lot of risk for small reward.   Let me know how you model a reasonable trade as I’m always interested in learning. 

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Bozo_Casanova

Bozo_Casanova 26898

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See I don’t see selling puts as risk. I see it as the lowest risk thing I can do, because in the worst case scenario I wind up with an equity I was willing to buy at that price. It’s insurance. I’m underwriting low probability events. It’s not a question of risk it’s a question of capital reserves.

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ChiTownDoc

ChiTownDoc 21347

Posted
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16 minutes ago, 4thgenhorn said:

All I know about puts is they cost a lot more than calls. I’ve sold puts, but in hind sight that was a lot of risk for small reward.   Let me know how you model a reasonable trade as I’m always interested in learning. 

See below. 

6 minutes ago, Bozo_Casanova said:

See I don’t see selling puts as risk. I see it as the lowest risk thing I can do, because in the worst case scenario I wind up with an equity I was willing to buy at that price. It’s insurance. I’m underwriting low probability events. It’s not a question of risk it’s a question of capital reserves.

Bozo is the whizkid.  He just plays dumb to make us feel better.  

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ChiTownDoc

ChiTownDoc 21347

Posted
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34 minutes ago, hornbri said:

Yep - I am starting to feel bad for everyone that jumped out of the market. Just goes to show you cannot time it. 

Can call this luck but it’s worked nearly every time.  Run it to highs, set some puts as you climb.  If it doesn’t fall great.  If the puts hit add all that money back in as it falls 1% at a time.  Scared money don’t make money.  You’re not buying huge puts so if they never hit and your money keeps running it’s still a win.  But there’s always good chance you cover.  Then on way down below the put add UPRO (3x leverages s/p index fund).  When you hit prior highs you’re actually way up.  

Again this is on side with fun money.  The pros who handle my money laugh at how crazy I get but it’s bought me a lot of nice toys. 

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52-80

52-80 19377

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52 minutes ago, hornbri said:

Yep - I am starting to feel bad for everyone that jumped out of the market. Just goes to show you cannot time it. 

remember when sushi said the apocalypse was coming?

pepperidge farms remembers

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Johnny Sack

Johnny Sack 8397

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I have a decent amount of stock in one company that was restricted, but now is not.  I don't love the stock market and don't mess with it much outside of this one stock and my IRA accounts (I like investing in real estate rental properties, storage, and boat/rv storage -- because I understand them).  I have been using covered calls to sell out of that stock.  Generates some cash and allows me to sell it over time.  Not sure if it is the best move from a tax standpoint, but I like getting those checks.

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SDG

SDG 3336

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2 hours ago, 52-80 said:

remember when sushi said the apocalypse was coming?

pepperidge farms remembers

The apocalypse wont happen overnight (it didn’t in 07-08 or late 90’s either).  Im still pretty much 90% equities and luckily my largest single holding is SBUX (up 65% after i bought during the pr nightmare). That being said i recently started moving more funds into a managed portfolio that has more fixed income and derivative knowledge than im capable of keeping up with.

Ive noticed there’s a growing volume of houses on the market, here in AZ, that are reducing prices even in our current interest environment.  A year ago that wasnt the case, so im being cautiously optimistic. 

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David Dennison

David Dennison 19567

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57 minutes ago, Incredulity said:

Own your house

cook your own meals

take small vacations 

dont have multiple kids(or kids that get everything they ask for)

drive a paid for 5-10 year old car.

dont try to keep up with the jonses on house amenities or personal amenities

dont play the lottery 

This doesn't help capital at all.

Shame on you.

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Bozo_Casanova

Bozo_Casanova 26898

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I have a decent amount of stock in one company that was restricted, but now is not.  I don't love the stock market and don't mess with it much outside of this one stock and my IRA accounts (I like investing in real estate rental properties, storage, and boat/rv storage -- because I understand them).  I have been using covered calls to sell out of that stock.  Generates some cash and allows me to sell it over time.  Not sure if it is the best move from a tax standpoint, but I like getting those checks.

I used to go both sides of that on the regular- sell naked puts until assigned, sell covered calls until called. Capture premium.lLower basis, rinse, repeat.
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4thgenhorn

4thgenhorn 42

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On 7/2/2019 at 9:52 PM, Bozo_Casanova said:

See I don’t see selling puts as risk. I see it as the lowest risk thing I can do, because in the worst case scenario I wind up with an equity I was willing to buy at that price. It’s insurance. I’m underwriting low probability events. It’s not a question of risk it’s a question of capital reserves.

Let me expand on my statement for puts as more risk to reward than calls:

for selling the Put, assuming at-the-money, you may collect 3%. Max upside is 3%, downside theoretical risk is 97%. Also time-value of capital reserves. 

 

For buying a call, ATM, it may cost 2% (calls typically cheaper than puts).  So downside is 2%, with theoretical Infintity upside.  

Ergo, infinity > 3 % on the upside; 97% > 2% on the downside.  I’d hate to be waiting to invest while the market moves higher  

 

Or if you go with selling OOM calls, you might cap your gains, say 6-8%, while collecting 1-2%.  I like this strategy as it’s defined returns done quarterly; not too bad over a lifetime.

Bottom line though both are conservative strategies, and you are usually making money either way. Of course you can always pick a historical example which shows one beating the other. 

 

Markets up up this morning. Glad I’m in. Insert strippers-and-blow gif. 

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ChiTownDoc

ChiTownDoc 21347

Posted
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On 7/8/2019 at 1:38 PM, Nice Guy Eddie said:

the financial press is talking about the recent inverted yield curve being a strong signal of an upcoming recession.  What does the Surly money people say?

That recession is going to be 2020 Jan at earliest.  The corporate tax cuts are real.  Whether you think they were appropriate or not, earnings will stay strong.  

Watch what fb reports in few weeks for starters.

All like my opinion man.  

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Captainant

Captainant 28589

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3 minutes ago, ChiTownDoc said:

That recession is going to be 2020 Jan at earliest.  The corporate tax cuts are real.  Whether you think they were appropriate or not, earnings will stay strong.  

Watch what fb reports in few weeks for starters.

All like my opinion man.  

I'm trying to figure out how to time the market for house buying in Houston... We'd rather not buy at the top and then immediately be underwater (figuratively or literally because Houston). I think there's a chance the action may start before Jan 2020, especially if there's more tariff fuckery

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jdhorn92

jdhorn92 1599

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On 7/4/2019 at 9:29 AM, Incredulity said:

Own your house        - Own it , but really the bank owns it - Check/no check

cook your own meals - Check

take small vacations  - Check

dont have multiple kids(or kids that get everything they ask for) - No check 3 girls and a wife

drive a paid for 5-10 year old car. - Check

dont try to keep up with the jonses on house amenities or personal amenities - Check

dont play the lottery  -Check

Sounds like someone read "The Millionaire Next Door"    :)

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Johnny Sack

Johnny Sack 8397

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34 minutes ago, Captainant said:

I'm trying to figure out how to time the market for house buying in Houston... We'd rather not buy at the top and then immediately be underwater (figuratively or literally because Houston). I think there's a chance the action may start before Jan 2020, especially if there's more tariff fuckery

I'd buy in fall.  Seems to be when prices are lowest.

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Dbeasy

Dbeasy 15612

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I'm trying to figure out how to time the market for house buying in Houston... We'd rather not buy at the top and then immediately be underwater (figuratively or literally because Houston). I think there's a chance the action may start before Jan 2020, especially if there's more tariff fuckery


What part of town are you buying?
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Captainant

Captainant 28589

Posted
Posted (edited)
7 minutes ago, Dbeasy said:

What part of town are you buying?

 

Ideally inside the loop to the west of downtown, first home for my wife and I. Looking in the 300k-ish range. We're renting an apartment in midtown and just re-upped our lease through April and not going to be ready to seriously look until early 2020 or so

Edited by Captainant
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swraith

swraith 348

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Ideally inside the loop to the west of downtown, first home for my wife and I. Looking in the 300k-ish range. We're renting an apartment in midtown and just re-upped our lease through April and not going to be ready to seriously look until early 2020 or so


That is a broad area, but I wish you good luck. My brother has been renting a tiny old house in the Heights for years while looking to buy inside the loop. Budget of $300k to $325k.

He ended up buying a house in Spring Branch, north side of I10 and Gessner, outside of the loop. Schools are ridiculously bad.
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Captainant

Captainant 28589

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Just now, swraith said:

That is a broad area, but I wish you good luck. My brother has been renting a tiny old house in the Heights for years while looking to buy inside the loop. Budget of $300k to $325k.

He ended up buying a house in Spring Branch, north side of I10 and Gessner, outside of the loop. Schools are ridiculously bad.

 

Cheers, we've seen some great looking townhomes that checked 80% of our boxes without seriously looking, so we're feeling hopeful. Here's hoping shit doesn't hit the fan before I'm able to cash out a big stack of RSU's that mature in January lol. I know it's poor form to sell RSU's, but I figure putting it into a downpayment on a house is a rare exception to that rule, since it'll get us out from under PMI more quickly

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Storm the Field

Storm the Field 5367

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Just now, Captainant said:

Cheers, we've seen some great looking townhomes that checked 80% of our boxes without seriously looking, so we're feeling hopeful. Here's hoping shit doesn't hit the fan before I'm able to cash out a big stack of RSU's that mature in January lol. I know it's poor form to sell RSU's, but I figure putting it into a downpayment on a house is a rare exception to that rule, since it'll get us out from under PMI more quickly

I was going to say that your price range in that target area puts you in "Older Townhouse in Heights or Rice Military"  market but it sounds like that's exactly what you're been looking at.

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Bozo_Casanova

Bozo_Casanova 26898

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Cheers, we've seen some great looking townhomes that checked 80% of our boxes without seriously looking, so we're feeling hopeful. Here's hoping shit doesn't hit the fan before I'm able to cash out a big stack of RSU's that mature in January lol. I know it's poor form to sell RSU's, but I figure putting it into a downpayment on a house is a rare exception to that rule, since it'll get us out from under PMI more quickly

Poor form? Maybe for you. I will take it now. I’ve already got my income tied up with my company, so having wealth in it is too much risk in one issue for me.

It’s worth mentioning that my company is in the top 1% of equities over the last 5 years, so I’ve not benefitted from significant post vesting appreciation. On the other hand, as long as they keep giving me more ill continue to gratefully soldier on. So the golden handcuffs are pretty tight as it is.

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DCA_HORN

DCA_HORN 725

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I was going to say that your price range in that target area puts you in "Older Townhouse in Heights or Rice Military"  market but it sounds like that's exactly what you're been looking at.
Yeah it's not impossible but ITL you are pretty much looking at 500 minimum. We have to be at the top of the market also. There's at least 10 houses under construction in a 3 block radius from my house.
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52-80

52-80 19377

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8 hours ago, Captainant said:

Cheers, we've seen some great looking townhomes that checked 80% of our boxes without seriously looking, so we're feeling hopeful. Here's hoping shit doesn't hit the fan before I'm able to cash out a big stack of RSU's that mature in January lol. I know it's poor form to sell RSU's, but I figure putting it into a downpayment on a house is a rare exception to that rule, since it'll get us out from under PMI more quickly

Sold a wad of RSUs for the house 2 years ago and if I hadnt it would be half its value today

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Dbeasy

Dbeasy 15612

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Posted
Cheers, we've seen some great looking townhomes that checked 80% of our boxes without seriously looking, so we're feeling hopeful. Here's hoping shit doesn't hit the fan before I'm able to cash out a big stack of RSU's that mature in January lol. I know it's poor form to sell RSU's, but I figure putting it into a downpayment on a house is a rare exception to that rule, since it'll get us out from under PMI more quickly


I’m not sure why you say it’s poor form to sell RSU’s. You are taxed on those at vesting. Since they are already taxed, you are basically making the decision to put that money into that particular company over any other stock investment. That’s not particularly wise. You might want to get some financial advice.
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troph

troph 25242

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Posted
Own your house cook your own meals take small vacations 

dont have multiple kids(or kids that get everything they ask for)

drive a paid for 5-10 year old car.

dont try to keep up with the jonses on house amenities or personal amenities

dont play the lottery 

 

 

And you’d still need a minimum of $250,000 gross to pay for income taxes and have about $50,000 to live on and still save 70%. And that’s after owning your home. So saving 70% is out of reach for 97.5% of folks without question. I’m at 27-30% savings of gross not counting principal pay down on my mortgage and I feel broke. Of course I like nice cars, a tricked out boat, frequent and nice vacations and a hot woman by my side. Oh and those three boys!  

Wheretofore thankfully I have mastered this move...

 

49f59a37a92234405c93d496afafdaa6.jpg

 

 

 

But I’m also uninterested in the classic retirement. I’m 43 and working toward a part time schedule by the time I’m 55 without geographic constraints and possibly even outside client related work. If I can get there, then I’ll go until I can’t function at which time I will take myself out to the pasture and do it myself if I have to. Very little years not working in some capacity. So fuck it, spend what you’ve got as long as you’ve got enough for 10 years if shit starts going down and you don’t realize it yet.

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ChiTownDoc

ChiTownDoc 21347

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Posted
On 7/10/2019 at 1:04 PM, Captainant said:

Yeah, fuck me for trying to make decisions based on historic market indicators right?

Most important part is probably timing the rates - they're dropping, so I'd wait. 

 

 

Also, this fucker keeps running.  Shame so many are missing out on the sidelines.  I'll never understand trying to time like that.  Going overweight bonds, sure, but just completely jumping out then trying to time re-entry is impossible in the long term.  Also if over 10 years the market is not up, we have MUCH bigger problems than money and the market.  

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troph

troph 25242

Posted
Posted
Most important part is probably timing the rates - they're dropping, so I'd wait. 

 

 

Also, this fucker keeps running.  Shame so many are missing out on the sidelines.  I'll never understand trying to time like that.  Going overweight bonds, sure, but just completely jumping out then trying to time re-entry is impossible in the long term.  Also if over 10 years the market is not up, we have MUCH bigger problems than money and the market.  

 

I listened to doomsayers in 2008-2012 and lost out. Then waited in cash for a drop and lost out again and finally said fuck it I’ll dollar cost average and just go in now. Don’t regret it and when it drops I’ll buy then too.

 

And to your 10 year we are fucked if the market isn’t up point ... back to fast cars, tricked out boats and hot women.

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ChiTownDoc

ChiTownDoc 21347

Posted
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4 minutes ago, troph said:

 


I listened to doomsayers in 2008-2012 and lost out. Then waited in cash for a drop and lost out again and finally said fuck it I’ll dollar cost average and just go in now. Don’t regret it and when it drops I’ll buy then too.

 

Well at least you learned.  I have family/friends who keep insisting on timing all this shit.  

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hornhorn

hornhorn 100

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Posted
33 minutes ago, Captainant said:

Fed's data shows that US manufacturing in recession due to the trade war. Makes me curious if this is the first crack that starts to form, especially since they're already wanting to lower interest rates in response 

Its contradicted by consumers data being strong. So even if they wanted to get multiple rate cuts, its less likely to happen as long as the consumer(and job/unemployment) data keeps posting strong numbers. 

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