Talking stocks, trading, and investing in general

[idfnl]

Thinking about a stake in DD.... any holders?

 

[otc]



Thinking about a stake in DD.... any holders?

I hate to say it, but I'd be wary of investing in DDs. They grow rapidly early on (especially if inflated by artificial means), but the long term trend is always downward (unless there is additional manipulation).

 

[idfnl]

^ Thanks OTC. I needed a reality check.

Day trading EPZM is making me some tidy $.

And my good samaritan deed for the day is that I saved a good friend a **** load of money. He was going to go in on 200 shares of GOOG looking for an earnings bump. I told him it was a terrible move, surprisingly he listened.

 

[otc]

I find that things rated A may not put out big numbers, but they are much less likely to sag over time.

 

[SkinnyGoomba]

Nice results out of GE today and finally bank results are finally exciting investors, been a decent week for the lot of them.

 

[idfnl]

Wow, glad I'm not in the Potash sector, its getting murdered today.

I'm getting really skittish and starting to buy GLD/move into cash. All this currency being printed is either going to cause a ton of inflation or will raise interest rates a lot or some measure of both. I don't see a simple way out of it and the market will take the brunt.

Around late Sept/Oct, I am going to buy a short ETF. I sense a big correction, even a crash that could test the 7000 level.

Anyone else feeling this way?

 

[jbarwick]

7000 would take some sort of war or big company meltdown to get to. If I sense a little stress in the market, I buy TZA as a hedge and try not to hold it too long. Probably not for everyone but I like my odds with the small caps.

 

[idfnl]



7000 would take some sort of war or big company meltdown to get to.  If I sense a little stress in the market, I buy TZA as a hedge and try not to hold it too long.  Probably not for everyone but I like my odds with the small caps.

I don't think so. Seems like it would just take enough doubt in an overheated market. Not to mention next quarters earnings seem like they are going to be weak.

 

[indesertum]

If you had $100 million dollars what would be the most painless way to make steady gains on it without having somebody else manage it? ETFs?

 

[lawyerdad]



7000 would take some sort of war or big company meltdown to get to.

I don't think so. Seems like it would just take enough doubt in an overheated market. Not to mention next quarters earnings seem like they are going to be weak.

No, sorry. 7000? That's not even a reasonable-minds-can-differ thing. It would take a lot more than that.

If you had $100 million dollars what would be the most painless way to make steady gains on it without having somebody else manage it? ETFs?

I'm going to assume you're not a troll, since you have 10,000-plus posts.
But your question doesn't really make a lot of sense. First, you need to define what you mean by "steady gains" (and "painless"). Since nothing is going to assure you of risk-free, consistently steady gains - especially if you factor in inflation - is what you're really looking for something that has relatively little risk to principal with growth or income potential? Regardless, buying a bunch of ETFs seems like a terrible idea, for a variety of reasons. Your best bet would probably be a diversified portfolio of index funds, with maybe a few other things thrown in to cover areas where you want exposure but there's no index fund that fits. (I'm further assuming than an index fund fits your definition of "not managed by somebody else". If not, it's hard for me to see how ETFs fit.)
Although my real answer is that if I had $100 million I probably wouldn't worry about it all that much . . .

 

[seeldoger47]

I'm getting really skittish and starting to buy GLD/move into cash. All this currency being printed is either going to cause a ton of inflation or will raise interest rates a lot or some measure of both. I don't see a simple way out of it and the market will take the brunt.

A couple of things:

1. no money is 'printed', bonds are swapped for reserves
2. QE cannot cause real economic inflation; we have 5 years of data in the Western world and over 20 years of Japanese data confirming this
3. interest rates will rise 'a lot' when the Fed wants it to
4. Interestingly enough I agree with your gut feeling; QE has created significant dislocations in the credit and equity markets.

Around late Sept/Oct, I am going to buy a short ETF. I sense a big correction, even a crash that could test the 7000 level.

Anyone else feeling this way?

Buying a short ETF, let alone one that is leveraged two or three times, is quite possibly the most foolish thing you could do. If you are so bearish, why wouldn't you buy government bonds? In the event of a severe market beak, Treasury bonds act as a synthetic gamma with a positive carry. And who doesn't love a positive carry?

 

[indesertum]



No, sorry. 7000? That's not even a reasonable-minds-can-differ thing. It would take a lot more than that.
I'm going to assume you're not a troll, since you have 10,000-plus posts.
But your question doesn't really make a lot of sense. First, you need to define what you mean by "steady gains" (and "painless"). Since nothing is going to assure you of risk-free, consistently steady gains - especially if you factor in inflation - is what you're really looking for something that has relatively little risk to principal with growth or income potential? Regardless, buying a bunch of ETFs seems like a terrible idea, for a variety of reasons. Your best bet would probably be a diversified portfolio of index funds, with maybe a few other things thrown in to cover areas where you want exposure but there's no index fund that fits. (I'm further assuming than an index fund fits your definition of "not managed by somebody else". If not, it's hard for me to see how ETFs fit.)
Although my real answer is that if I had $100 million I probably wouldn't worry about it all that much . . .

Not a troll just very very ignorant

Painless to me means as little time managing as possible. Not looking for risk free gains.

I was thinking a mixture of equity and fixed income assets and a small proportion of cash equivalents (like 45/45/10). Equity investments would be centered on ETFs and index funds and individual equity focused on blue chip companies with undervalued P/E ratios, but relatively high dividend yields, and a history of consistent growth. Fixed income assets would include 10-year Treasuries, investment grade corporates, and investment grade municipals. Cash equivalents would include money market holdings and treasury bills.

This is the limit of my finance knowledge. I know I probably sound like an idiot, but was simply wondering what I would do

 

[idfnl]



No, sorry. 7000? That's not even a reasonable-minds-can-differ thing. It would take a lot more than that.

Look at the chart since '95. Its tested that range a number of times.

 

[idfnl]



A couple of things:

1. no money is 'printed', bonds are swapped for reserves
2. QE cannot cause real economic inflation; we have 5 years of data in the Western world and over 20 years of Japanese data confirming this
3. interest rates will rise 'a lot' when the Fed wants it to
4. Interestingly enough I agree with your gut feeling; QE has created significant dislocations in the credit and equity markets.

Buying a short ETF, let alone one that is leveraged two or three times, is quite possibly the most foolish thing you could do. If you are so bearish, why wouldn't you buy government bonds? In the event of a severe market beak, Treasury bonds act as a synthetic gamma with a positive carry. And who doesn't love a positive carry?

Ok, help me out here because I'm a bit confused.

Lets consider it money supply, I use printed generically, its not in circulation per se unless it is lent. So isn't that money sitting there in reserve? You call it swapping, but in reality isn't the Fed buying bank assets and its own bonds? This money exists on balance sheets. You can't just snap a finger and it disappear. I think what you are saying is that unless that money is released into the money supply it won't trigger inflation.

I have the feeling that they want inflation, though. I believe they want to use it to water down the deficit. Interest rates jumped very recently, how did the Fed want that? It seemed like a market force to me.

If the market tanked, you'd be rolling in a short ETF. I wouldn't put much in it and it would be a short term trade of a matter of days, I want to stay in cash and GLD.

 

[lawyerdad]



Not a troll just very very ignorant

Painless to me means as little time managing as possible. Not looking for risk free gains.

I was thinking a mixture of equity and fixed income assets and a small proportion of cash equivalents (like 45/45/10). Equity investments would be centered on ETFs and index funds and individual equity focused on blue chip companies with undervalued P/E ratios, but relatively high dividend yields, and a history of consistent growth. Fixed income assets would include 10-year Treasuries, investment grade corporates, and investment grade municipals. Cash equivalents would include money market holdings and treasury bills.

This is the limit of my finance knowledge. I know I probably sound like an idiot, but was simply wondering what I would do

No, that sounds pretty well thought-out. With ETFs you need to be careful of embedded fees, among other issues. If you're looking for a classic diversification strategy, my opinion is that you can generally accomplish that more efficiently with index funds (that's just a general bias - there are perfectly good ETFs out there). That said, when you mix in individual equities you need to be careful not to skew the balance you're trying to achieve with the index funds or ETFs. Although with $100M to throw around, you can afford to choose enough individual equities to diversify within that basket. But it probably does move you a bit further away from from your goal of pain-free. There are lots of books out there about passive, diversity-based portfolio building, although I haven't paid enough attention in recent years to know which are considered the "best".