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Clothing and the rich - Page 9

post #121 of 157
Actually, a pip is the tiniest increment at which a currency pair will trade, essentially. With the EUR/USD, currency may look like 1.2775. So, if the pair were to move to 1.2770, you have seen a movement of 5 pips. With the USD/JPY, the pair looks like 103.75 for example. If it were to increase to 103.76, that has been an increase of 1 pip. The value of a pip is determined by the number of lots in your contract, or leverage. If you were to buy 1 lot of 100k, each pip movement in your favor would gain you $10. If you were to buy 5 lots of 100k, each pip would gain you (or cost you) $50. The contracts I had open were anywhere from 4 - 8 lots each (averaging approx. 5 lots per position). So, with that in mind, here's the math: 5 lots of 100k = $50 per pip. +820 pips * $50/pip = $41,000 Most brokers offer software that will translate your net P/L into your local currency for you so that you do not have to do the math in your head (along with subtracting/adding interest on the pair). The general rule is to never expose more than 2% of your capital at any given time on a position. The returns I just mentioned (820 pips) are extremely unusual. It is worth noting that 3 of the positions that hit limit last night had been open for 3-4 weeks, and at times were down by 50 pips or more. Also, I got extremely lucky in experiencing strong breakouts in multiple pairs that were in my favor. That rarely happens. As my friend Eric likes to say, "Forex is like a beautiful woman who will f**k you senseless one second, and castrate you the next." If you can stand the occassional punishment, it can be very rewarding. The forex is open 6 days a week, trading is done 24 hours a day, and the amount of daily activity vastly exceeds securities (I believe it is around $1 trillion a day). There are 3 great websites for forex data:
post #122 of 157
drizz - Well, the Fed has stated that they will continue to slowly increase interest rates until it's back up around 6 points (possibly higher). I believe their current policy is +0.25% each increase. Greenspan said with the last increase he thought this would work best and that they plan on sticking with it unless all hell breaks loose, something along those lines. I'd say the USD and int rate has a good near to mid term outlook based on that info.
post #123 of 157
Right, now would be a good time to borrow but the issue has more to do with the underlying value of these properties going forward and how that affects the amount of equity (at least for me) I haven't decided if I want to aggressively borrow at this time.
post #124 of 157
What would make me nervous about borrowing right now on real estate would be some of the comments I've heard regarding the housing index, i.e., a little off-mark, correction measures being considered, etc. I'm not a real estate guy though, so my feedback is silly. Last night, my girlfriend's father was saying (and he owns a realty business) that housing prices in urban markets have never receded in the last 40 years, regardless of what happened with the economy, wars, pestilence, disease, famine, what have you. heh heh. He was again trying to get us into real estate, saying urban properties especially are bullet-proof ways to grow capital, no matter what. He made some valid points. I don't know though. It just seems so slow growth, and I don't like the idea of tying up so much capital. Plus, my own father owns a handful of properties (in Southern Cali if you can believe it... Pomona, San Diego, Carlsbad, etc), and he has told me it's really a stupid investment if you don't have the resources to deal with property management and taxes. He said he won't buy properties unless he has at least 4x the required capital available. I have no idea if this is a good plan or not. Once again, I have no experience. But speaking of equity, the idea of putting some of my liquid capital into some solid equity sounds very attractive and is the whole reason my girl and I are considering it now. After getting beat up a few times on the markets, having some hard equity just sounds like an oasis of sorts.
post #125 of 157
I think it really depends on what you're doing. I have pretty good contacts in property management so it's not too bad, and in this area, property taxes are very low. I mostly buy properties that are easily rented (condos, duplexes) in orange county and long beach, with a few other properties in the east LA area. I'm debating whether to leverage and pick up as many as 20 units while interest rates are low, mainly because I think demand for rental housing will increase dramatically with increases in the interest rate (simple microeconomics) I have a little while to decide so we'll see what happens. Obviously the beauty of real estate is that if you are set up correctly and are able to rent all of your properties out, you can have your rental income not only pay your mortgages but your salary as well
post #126 of 157
If you don't mind my asking, what was your initial investment going in to real estate? What can one expect to invest in order to see some decent income from the investments, as you have described? I understand your experience would be with the LA market, but that would probably still help me a bit. Taxes in the Seattle region are floating right around 3-4%, which is pretty steep when you consider that the lowest-priced housing in the low-income areas is about $350,000 for a 2 or 3 bedroom fixer.
post #127 of 157
Oh, and condos in the area are running about $300k for 2br's in the 800-1000 sq ft range.
post #128 of 157
I think you could do fairly well by starting with $100-200k of cash, the first investment I made was a 4 unit, in the $700k range (in the mid 90s) for which I put down $150k. Depending on the loan you get, and the way you structure it, you could get by with less than that, but it's better to have more cash just in case.
post #129 of 157
Well, I don't no nothin' bout no pips, but I do know about pairs, and it seems you should invest in a couple of new ones - at least before Thursday .
post #130 of 157
Heh heh, I will be doing that Rider.. Do you already have the new Marteganis on the site? Is that what I was seeing there? I really like those wingtips. There's just something about wingtips that says "class" to me. I think maybe it's because my father always wore a pair of wingtips, never anything else, and he was quite a gentleman, IMHO. So now wingtips remind me of overstuffed chairs, great chat about Decline and Fall, a good game of chess, etc. Yeah, I'll be picking up a pair. And my size in Allen-Edmonds is an 8.5, I don't know the width, I just bought the 8.5 US, so I would assume it's a standard width, C or whatever. What does that equal in the Martegani lineup?
post #131 of 157
820 bps, hey. Very nice move, I guess you shorted the EUR when it was in the 1.35 range. What made you think it was about to head to a significant slide?
post #132 of 157
I saw 820 pips on multiple pairs, the USD/CHF, GBP/USD, USD/JPY and EUR/USD. I had multiple open positions on all pairs, so the combined returns were approx +820 pips. What made me think the EUR would start sliding against the dollar was a lot of information I was getting from all over the place - the news, friends, analysts, etc, saying there was too much resistance for the EUR/USD to hit 1.40 anytime soon. It might sometime, I don't know. But when Trouchet, or whatever his danged name is, had that conference with Bush about a month ago, there was huge talk that they had agreed to bring the EUR/USD to 1.10 or 1.20, and that was even printed in the papers and on the news. I saw it, didn't think much of it at first, and then a friend told me he had very good word that the central banks were making moves to weaken the pair, and were pulling previous 1.30 stops. I wasn't sure how much of that was rumor, but the trend developed, and I jumped on it at about 1.3200 I think. When the pair was range-trading last week (along with every other major pair the USD was in), I got all wacky, wondering if I f**ked up, and started opening some stupid positions. I backed off that though, and Friday opened some very agressive positions which had hit their limits when I came in to the office this morning (along with the long-term positions that had been open... I just couldn't believe EUR/USD was in 1.2700 range, I hadn't expected it for another month or two). Problem is, it was pure luck really. That's the thing with forex - markets can go crazy in your favor, and you feel like a genius until you get hammered on the next 4 or 5 positions. I get sick of all the flux sometimes. It's just nerve wracking. I had no idea EUR/USD would be near 1.2700 so soon. If you had told me that three weeks ago I would not have believed you. Frankly, I thought it would stay in range for a few more weeks, at least until Bush had presented his budget. I think the budget might push the pair back up (and currently have a long position open on the pair) this next week. But who knows. Forex can be so nice one second and so damn brutal the next.
post #133 of 157
I should mention here that my methods on forex do not rely on heresay. I did some pretty heavy tech analysis (fibonnaccis, etc) on the 15m, 4h, 1d charts and so on to find my entry/exits. But, I have put hundreds of hours (or more) into studying tech analysis and refining my systems, and the current USD strength just proves to all those tech freaks that sometimes a little fundamental doesn't hurt. Especially with long-term positions. I find that on the long-term positions, fundamentals have always proven more successful than tech analysis, and quite rarely does the forex follow the support/resistance patterns my fibonnaci fans say it should.
post #134 of 157
For those of you into real estate investing, there was an interesting article in our paper about this topic on Sunday. It seems that Phoenix is definitely one of the hot markets for investors and there is some concern that it is leading to a bubble. Arizona Republic Article We are definitely still cheaper than other markets. You said that condos in Seattle are running 300k for a 800-1000 square foot two bedroom - meanwhile here in Phoenix, my wife and I just sold our condo (900+ square feet, 2 bedrooms) for $125,000 and that was $15,000 more than any other unit in our complex had ever sold for. We bought a 3 bedroom, 1,800+ square foot house for just under $200k. Bradford
post #135 of 157
Rider, are you liquidating your Santoni's? They all seem to be on sale (are they Blake stitched?)
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