11 hours ago, GCrites80s said:

None of this matters for TSLA if tech bros that already make too much money and haven't seen any decrease in their income continue to buy the stock though since they don't see these things. It doesn't matter if they don't sell cars if the stock price is fine if you are allowed to be in the stock business far more than you are into the car business.

 

TSLA is a cult/meme stock where "fundamentals" don't matter.  There's a reason I avoid trading it.

10 minutes ago, DarkandStormy said:

 

True - and I do think his series is probably good for folks perpetually in high APR consumer or credit card debt.  But if you want to buy a house, and you've followed Ramsey's advice to eliminate all lines of credit (credit score to 0), you'll never get approved for a loan.

 

If you throw a few points an underwriter's way they will probably be able to come up with a way to get you a loan. In addition to the points your interest rate will be higher.

41 minutes ago, Wally said:

United points don't expire.

Delta Skymiles don't expire.

 

I wouldn't know because I've never used airline points because I very rarely fly.  I only flew twice in the 2010s.  I have no plans to fly anywhere in the 2020s, but that could change. 

 

There is simply no question that people are looser with their spending when they use credit cards.  The more people insist that they aren't, the more that they are.  The thought that there is some pot of gold at the end - the points - reinforces this tendency. 

 

 

 

1 minute ago, jmecklenborg said:

 

I wouldn't know because I've never used airline points because I very rarely fly.  I only flew twice in the 2010s.  I have no plans to fly anywhere in the 2020s, but that could change. 

 

There is simply no question that people are looser with their spending when they use credit cards.  The more people insist that they aren't, the more that they are.  The thought that there is some pot of gold at the end - the points - reinforces this tendency. 

 

 

 

Yeah, if you don't fly even on a semi-regular basis, then there's no need to accumulate airline miles.  On my end, my family and I fly perhaps one time per year.  Some years, maybe it's twice a year, but most years, it's only one trip.  And in our case, I've paid for our flights using airline miles 90% of the time over the past decade.  Airline miles have lost value over the years (and have gotten harder and harder to redeem), but at the same time, the cost of a basic airline ticket hasn't gone up much at all over the past 15 years. 

 

And in terms of being looser with your money if you are paying with a CC versus cash, there's definitely merit with this argument. It all comes down to self-discipline with this.  Some folks are able to do this, and others, well, they're not so good at it. 

Quote

Hartman said that she is underwriting her business with a large home equity line, “meaning that the state’s forced closure of her business needlessly threatens her home as well as her livelihood.”

 

Groan.  If you opened your business with a HELOC, you're not ready to go into business.  This is 08-09 all over again.  

 

https://www.cincinnati.com/story/news/2020/04/17/coronavirus-lawsuit-bridal-shop-owner-sues-acton-ohio-over-coronavirus-shutdown/5150986002/

On 4/16/2020 at 5:03 PM, Pugu said:

But isn't the typical way to do this is to do a reverse split?  So if you have 100 shares at 3.75 and a company wants to lower it to 2.50 and float more shares, you now have 100x(3.75/2.50) or 150 shares?

 

By total chance an ETF I bought and sold this month had a 10-1 reverse split.  TD Ameritrade charged me $38 to "reorganize".  These are the lows they've stooped to now that they don't charge to trade.  BTW, OAS surged to 90 cents soon after I sold it, so I could have tripled my money rather than doubled it if I had simply pushed the button a few hours later than I did.

 

 

 

 

On 4/17/2020 at 8:51 AM, DarkandStormy said:

 

The only points I have with airlines are Southwest (which don't expire, and we already made BANK off them signing up for two credit cards and getting the Companion Pass - points left are like 8k but we burned through >150k the last two years flying to a bunch of domestic locations) and United (~150k -> trying to save up for a big international flight, though our timetable is now likely to move back considerably).  Neither Southwest nor United miles ever expire (for now).  The rest are stored with a bank - Chase, Barclays, Capital One, etc.  We can either transfer them to an airline/hotel if it makes sense, or just use the points within the bank's system.

 

Dave Ramsey's advice is to take your credit score to 0.  I don't advise people listen to Dave Ramsey once they get beyond the "debt is bad, we should spend less than we make" portion of his series.

I think Ramsey overall gives good advice, especially to his audience, so I dont fault him on that. He is just one voice in the world of personal finance guru's and he gives solid advice to those and he has their interests at heart. I dont think it is for everyone, and his audience tends to be of the background with little financial education from a young age, so he helps them there. 

 

Like anyone, his is just an opinion and people do not necessarily have to follow Ramsey's advice to be financially successful and responsible. Personally, I disagree with taking the credit score to zero idea because even if you do not ever carry a balance, it is nice to know there is a credit safety net there if you need it. Also, discounts and airline points are all beneficial when saving and extending your money. However, I get it, that much of his audience is listening to him because they were not responsible with the credit card in the first place, so may be reasonable to remove the temptation altogether I guess. 

On 4/6/2020 at 12:29 PM, YABO713 said:

 

Marathon Oil is near its 52 week low, near $3.50 ... It's been as high as $18 this year and over $6 only a month ago. Might be a decent fluctuation buy

 

Thanks for the nice tip.  I shorted May $4 puts at 65 cents.

6 hours ago, Brutus_buckeye said:

I think Ramsey overall gives good advice, especially to his audience, so I dont fault him on that. He is just one voice in the world of personal finance guru's and he gives solid advice to those and he has their interests at heart. I dont think it is for everyone, and his audience tends to be of the background with little financial education from a young age, so he helps them there.

 

I first heard Dave Ramsey when I lived in Nashville and he was a local radio guy. The show caught my attention because he'd ask people their annual salary and they'd tell him without hesitation.  It was the first time in my life I had ever heard people share their earnings out loud.  I think his show is still just about the only place where you hear people describe their financial situations freely.  The fact that it's a radio show and people can hide behind their phones is what makes this possible. 

 

His demand that people pay cash for rental properties is a way to discourage people from buying rental properties.  There are obviously many accidental landlords out there and then "hobbyists" who dabble in single-family houses or duplexes.  He has seen so many people lose money in that realm that he doesn't want people involved at all. 

 

Maybe there is a correlation between being a "real" landlord and being an active trader.  You have to put a ton of time and energy into it if you really want to make money.  The professionals feast on the amateurs in both realms. 

16 hours ago, jmecklenborg said:

 

I first heard Dave Ramsey when I lived in Nashville and he was a local radio guy. The show caught my attention because he'd ask people their annual salary and they'd tell him without hesitation.  It was the first time in my life I had ever heard people share their earnings out loud.  I think his show is still just about the only place where you hear people describe their financial situations freely.  The fact that it's a radio show and people can hide behind their phones is what makes this possible. 

 

His demand that people pay cash for rental properties is a way to discourage people from buying rental properties.  There are obviously many accidental landlords out there and then "hobbyists" who dabble in single-family houses or duplexes.  He has seen so many people lose money in that realm that he doesn't want people involved at all. 

 

Maybe there is a correlation between being a "real" landlord and being an active trader.  You have to put a ton of time and energy into it if you really want to make money.  The professionals feast on the amateurs in both realms. 

I think the one thing that a lot of people who buy their single family rental dont realize is that life gets complicated and in the way many times. A lot of times, it seems that many callers into his show are active duty military and they are buying rental houses. Not that it is not a bad idea to have a rental house, but when you are likely to be transferred every 2-3 years, it is really hard to properly take care of the one property. The cash buying is a good strategy in that case because you can then afford to pay for proper management and then have some left over to pocket. 

 

He also seems like he likes or at one time liked getting the slum property. I have bought a few houses in my time for the $10-$30k range. They throw off a great income when you actively work it, but the maintenance costs tend to be a lot higher and the renovation costs are too, which, for me, made it harder to justify for the long term. 

49 minutes ago, Brutus_buckeye said:

active duty military and they are buying rental houses. Not that it is not a bad idea to have a rental house, but when you are likely to be transferred every 2-3 years, it is really hard to properly take care of the one property.

 

Yeah the whole thing with the active military buying houses has always baffled me.  Unfortunately many in the military come from lower-income or immigrant households with low financial literacy. 

 

I have a friend who as moved three times and still owns and rents his first two homes.  One is in Pittsburgh and one is in North Carolina.  He claims that he has only had to make an emergency trip to one of the houses once in the 15 years he has rented them.  He's a smart guy and he and his wife each make good money but I personally would not keep a previous house as a rental if I moved more than 100 miles away.  Driving from Cincinnati to Dayton or Columbus or Indianapolis in an emergency is not a big deal, but the 200+ mile radius is, in my opinion. 

 

1 minute ago, jmecklenborg said:

 

Yeah the whole thing with the active military buying houses has always baffled me.  Unfortunately many in the military come from lower-income or immigrant households with low financial literacy. 

 

I have a friend who as moved three times and still owns and rents his first two homes.  One is in Pittsburgh and one is in North Carolina.  He claims that he has only had to make an emergency trip to one of the houses once in the 15 years he has rented them.  He's a smart guy and he and his wife each make good money but I personally would not keep a previous house as a rental if I moved more than 100 miles away.  Driving from Cincinnati to Dayton or Columbus or Indianapolis in an emergency is not a big deal, but the 200+ mile radius is, in my opinion. 

 

I had to manage a few houses in Dayton for a couple of years and it was a pain in the butt. for the most part they took care of themselves, but at least 2-3 times a year I had to make unplanned trips up there to take care of minor stuff that the maint team up there was not in position to handle.

The market has crept back up to January 2019 levels.  No way is this sustainable with 20% unemployment, waves of imminent defaults of all types, and no return to normal for various industries until this time next year.  

16 minutes ago, jmecklenborg said:

The market has crept back up to January 2019 levels.  No way is this sustainable with 20% unemployment, waves of imminent defaults of all types, and no return to normal for various industries until this time next year.  

 

Unless, of course, there isn't actually a wave of imminent defaults coming and the 20% unemployment will be back to <10% in two months and <5% in six.

17 minutes ago, jmecklenborg said:

The market has crept back up to January 2019 levels.  No way is this sustainable with 20% unemployment, waves of imminent defaults of all types, and no return to normal for various industries until this time next year.  

there's a theory in leftist/socialist thought that high unemployment can improve values of companies. the idea is that high unemployment puts downward pressure on labor costs. I don't give it a lot of credence because demand for goods drops in high unemployment environments. But it does have me thinking.

I feel that was the motivation behind pushing 2-income households starting in the '70s. It both depressed labor costs and increased consumer spending. Now you needed two cars, had to spend more on clothing, bought more gas, ate less at home etc.

5 minutes ago, GCrites80s said:

I feel that was the motivation behind pushing 2-income households starting in the '70s. It both depressed labor costs and increased consumer spending. Now you needed two cars, had to spend more on clothing, bought more gas, ate less at home etc.

although depressed labor costs from additional workers is small and only temporary. More workers = more demand for goods.

21 minutes ago, GCrites80s said:

I feel that was the motivation behind pushing 2-income households starting in the '70s. It both depressed labor costs and increased consumer spending. Now you needed two cars, had to spend more on clothing, bought more gas, ate less at home etc.

 

More house.  More stuff.  More big vacations.  More college.  More traveling youth sports.  More air conditioning.       

 

There is now speculation that the fed will buy junk bonds, thereby bailing out reckless operators.  We need real investment, not speculation.  Bailing out speculators encourages more speculation.  Which will require more quantitative easing to bail out.  

31 minutes ago, freefourur said:

although depressed labor costs from additional workers is small and only temporary. More workers = more demand for goods.

 

That is, until only a few years later when robots and computers came along and depressed it again. And in the years between double-digit inflation took hold.

Just now, GCrites80s said:

 

That is, until only a few years later when robots and computers came along and depressed it again. And in the years between double-digit inflation took hold.

Yep and throw outsourcing and union busting into the mix for good measure.

I'm just as much of an advocate for keeping people's mandatory bills down as I am for increasing income. It shouldn't take $3500 a month just to keep a person alive, sheltered and clothed when it only cost $250 to do so in 1972.

^ I agree.  Keeping fixed costs below ones means is an important part of budgeting. I am amazed at the amount of people with nig fancy houses on Facebook who were freaking out about money after like 2 weeks of not working.  That's not a good way to live.

24 minutes ago, GCrites80s said:

I'm just as much of an advocate for keeping people's mandatory bills down as I am for increasing income. It shouldn't take $3500 a month just to keep a person alive, sheltered and clothed when it only cost $250 to do so in 1972.

 

Then there was $250 per year...

 

While it certainly is fun to make fun of middle-class and up overspenders and their SUVs, unnecessary bigass trucks, McMansions (or the mini version), driving from Columbus to Cambridge all the time over an 8-year-old's soccer game and Jet Skis, I do want to focus more on all the outsize bills that low- to middle income individuals and families receive due to no fault of their own.

4 hours ago, GCrites80s said:

I'm just as much of an advocate for keeping people's mandatory bills down as I am for increasing income. It shouldn't take $3500 a month just to keep a person alive, sheltered and clothed when it only cost $250 to do so in 1972.

Keeping bills down and living within your means is a good thing. Placing price ceilings on things is not the way to go about it and leads to scarcity. Things like rent control, or other price controls end up driving down the available supply and quality.

 

 

Stop flipping out about your own industry and think about the greater good of society. My industry is constantly under attack way worse than yours and I don't bitch about it all the time. 

Without rent control, only quants, the already rich and actors would live in NYC. That means nobody is willing to operate the trains, clean the toilets, tend bar or feed people. That breaks the city and everyone leaves.

16 hours ago, Gramarye said:

 

Unless, of course, there isn't actually a wave of imminent defaults coming and the 20% unemployment will be back to <10% in two months and <5% in six.

 

Is there any evidence that this is a likely scenario?  The impact on travel, tourism, and general entertainment / service sector spending will last much longer than 6 months.  The airlines are talking about a 2-3 year recovery and a seismic shift in the way they do business going forward.  They can't be the only ones.  We're already starting to see long term workforce reductions at Boeing, GE, and Spirit Aerosystems.  And if business travel doesn't rebound quickly, which it won't (my company (Fortune 500 global manufacturing) has already restricted business travel for the entire year), I don't see how we avoid significant hotel and restaurant closings in major business centers.

 

Are we also not concerned about how this pandemic could accelerate the work from home movement thereby decimating office rents and building values?

 

Honestly guys, are we just riding high on the government bailouts and hoping that this will all blow over within 2 months?  GDP shrank by 4.8% in Q1 and it will be much worse in Q2.  The stock market is massively over valued right now...

Edited April 29, 20205 yr by Hootenany

For anyone else living in Cleveland proper - 

 

I had a bit of a rage episode yesterday... My mortgage payment increased $300 on a fixed rate, due to an error in transfer that my realtor and mortgage provider didn't catch ($2,400 lien on the property ? from previous owners)

 

My mortgage was locked in at 4.8%, so I refi'd to 3.35% yesterday to a 30 year fixed and got my payment down nearly $400/mo. Given the way our property taxes swing year by year, it might be worth looking into. 

8 minutes ago, YABO713 said:

For anyone else living in Cleveland proper - 

 

I had a bit of a rage episode yesterday... My mortgage payment increased $300 on a fixed rate, due to an error in transfer that my realtor and mortgage provider didn't catch ($2,400 lien on the property ? from previous owners)

 

My mortgage was locked in at 4.8%, so I refi'd to 3.35% yesterday to a 30 year fixed and got my payment down nearly $400/mo. Given the way our property taxes swing year by year, it might be worth looking into. 

Take a look at your title policy and see if they mentioned the lien. I belief the title insurance should cover the lien if it wasn't discovered during the title search.

52 minutes ago, Hootenany said:

Honestly guys, are we just riding high on the government bailouts and hoping that this will all blow over within 2 months?  GDP shrank by 4.8% in Q1 and it will be much worse in Q2.  The stock market is massively over valued right now...

 

I bought Vanguard's VOO for my independent IRA on March 24, one day after the lowest day of the crash,  at $216.  It's now at $267, the same price as October of 2019.  That's...insane.

 

This same S&P index fund was at $100 back in 2010. 

 

 

17 hours ago, Gramarye said:

 

Unless, of course, there isn't actually a wave of imminent defaults coming and the 20% unemployment will be back to <10% in two months and <5% in six.

 

Employment could pick back up, but word on the street is ZERO retail or restaurant tenants are paying their rent currently.  The next financial crisis is going to come in the form of bundled securities in the commercial sector.  

9 minutes ago, jmecklenborg said:

 

I bought Vanguard's VOO for my independent IRA on March 24, one day after the lowest day of the crash,  at $216.  It's now at $267, the same price as October of 2019.  That's...insane.

 

This same S&P index fund was at $100 back in 2010. 

 

I threw in like ~$200 into UPRO when it was $21.75 at the end of March.  That's paid off nicely so far.

 

I like VGT for a little extra towards tech.  That index fund has taken off since 2010.  Fun to do these backdate tests lol.

17 hours ago, Gramarye said:

Unless, of course, there isn't actually a wave of imminent defaults coming and the 20% unemployment will be back to <10% in two months and <5% in six.

 

1 hour ago, Hootenany said:

17 hours ago, Gramarye said:

 

Unless, of course, there isn't actually a wave of imminent defaults coming and the 20% unemployment will be back to <10% in two months and <5% in six.

 

Is there any evidence that this is a likely scenario?  The impact on travel, tourism, and general entertainment / service sector spending will last much longer than 6 months.  The airlines are talking about a 2-3 year recovery and a seismic shift in the way they do business going forward.  They can't be the only ones.  We're already starting to see long term workforce reductions at Boeing, GE, and Spirit Aerosystems.  And if business travel doesn't rebound quickly, which it won't (my company (Fortune 500 global manufacturing) has already restricted business travel for the entire year), I don't see how we avoid significant hotel and restaurant closings in major business centers.

 

Are we also not concerned about how this pandemic could accelerate the work from home movement thereby decimating office rents and building values?

 

Honestly guys, are we just riding high on the government bailouts and hoping that this will all blow over within 2 months?  GDP shrank by 4.8% in Q1 and it will be much worse in Q2.  The stock market is massively over valued right now...

 

You said it yourself.  For all the talk of absolute economic collapse, GDP shrank by 4.8%.  Now that of course reflects only one real month of stay-at-home orders (March).  But from the way some people in the media and markets are panicking, you'd think it had dropped by 30%.  The stock market did drop by 30% from its February high to its March low.

 

You say Q2 will be worse.  I concede April will be as bad as March.  But will May and June?  And for that matter, will Q3 and Q4?  I'm not buying now with the intention of selling in a week.

 

We talked upthread about how the stay-at-home orders affect primarily the most visible, public-facing portions of the economy: brick-and-mortar retail, restaurant & hospitality, travel, live entertainment.  The real economy is vastly larger than that and most of it is almost untouched, though I'm closely monitoring stories from the heartland about things like the food processing plants that are not being affected.  Challenges to the food supply chain are much more disquieting to me than challenges to the MLB schedule.

 

You ask if we're concerned about how this pandemic could accelerate the work from home movement and negatively impact office rents and building values.  First, only rents factor into GDP; building values are only balance sheet changes.  Second, do you not see the potential upside of accelerating work from home movement (even just economically, let alone socially)?  I think that that will absolutely be a net positive for GDP; the rent savings don't just vanish into thin air.  The work from home movement was accelerating anyway.  My wife has worked from home since December of 2018, for a company based out of Dallas, using technology that really wasn't mature when she started her previous job in 2012, let alone when I started my previous job in 2009.  The maturation of work-from-home technology enabled her to say "yes" to a job that gave her a major pay increase (and a quality-of-life improvement) without putting our family in the position of having to decide whether to pull up roots and move.  Woe to the landlord that might have wished that they needed to find her office space somewhere, but hardly woe to the company or the employee or the employee's family.  Multiply that times however many more times that story might play out now that employers have found the nudge to be more flexible and I have no doubt whatsoever that this will be a net positive for the economy.  GDP is based on the value of your work, not the location of it (other than "America").

 

As for the airlines talking about a seismic shift in the way they do business--if that involves reducing routes and frequencies (and concomitantly being forced to increase prices significantly on the remaining customers), well, that opens the door for a renewed conversation about regional high-speed rail, regarding which I could also point you to many other threads on this site.

 

It is possible that I live in a bubble, with my portfolio dominated by AMZN and NFLX and my wife's dominated by MSFT and COST, very few companies that have taken it on the chin here.  But I don't think so.  We are weathering this pandemic well, and DeWine said it well when he said "we save the economy by first saving lives, and we do it in that order."  Total fatalities have been low and (I know this is crass, but for a finance thread, this is true) total working age fatalities have been even lower.  We will have work to be done and workers to do it as we gradually reopen.  And time flies.  A vaccine is 12-18 months away, but even that day, distant as it sounds, will be here before we know it--and basically no one, not even the most alarmist, is suggesting that we will never have a vaccine for this coronavirus.  People can price their expectations accordingly.  If I'm investing with 5-year time horizons, 4 of those years are going to be years in which a vaccine exists.

2 hours ago, freefourur said:

Take a look at your title policy and see if they mentioned the lien. I belief the title insurance should cover the lien if it wasn't discovered during the title search.

 

It's not mentioned - it was missed by all parties... 

 

Which, as a lawyer, had me thinking "holy sh** the transfer was illegal", but instead of the headache, if there's ever an issue down the road, the house will be ours by adverse possession anyways lol 

6 hours ago, Gramarye said:

 

You said it yourself.  For all the talk of absolute economic collapse, GDP shrank by 4.8%.  Now that of course reflects only one real month of stay-at-home orders (March).  But from the way some people in the media and markets are panicking, you'd think it had dropped by 30%.  The stock market did drop by 30% from its February high to its March low.

 

You say Q2 will be worse.  I concede April will be as bad as March.  But will May and June?  And for that matter, will Q3 and Q4?  I'm not buying now with the intention of selling in a week.

 

I agree with most of your points with this one exception.  The 4.8% drop in March was during an effective 2 week (maybe 3 max) period of reduced economic activity.  Most sports cancellations and bar closures started in mid-March and the stay at home orders didn't really start until the last full week of March.  Most of the country has been in lock down for the full month of April and I simply don't see the rapid bounce back post-lock down that some expect.  I'd love to be wrong, but based on the Q1 numbers it appears that Q2 is going to be shockingly brutal.  I think the best we can hope for is -10%.

 

Of course the stock market doesn't really care about today (until it does ?‍♂️) and it's trying to gauge the value of these companies long term.  I get that.  But I don't think we understand the long term impact this is going to have on the economy and I assumed that uncertainty would drive the market lower.  Of course I'm happy to admit that so far I've been wrong and I will never truly understand the stock market which is why I buy total market index funds on a regular schedule and let it ride.  

6 hours ago, Gramarye said:

 

You said it yourself.  For all the talk of absolute economic collapse, GDP shrank by 4.8%.  Now that of course reflects only one real month of stay-at-home orders (March).  But from the way some people in the media and markets are panicking, you'd think it had dropped by 30%.  The stock market did drop by 30% from its February high to its March low.

 

You say Q2 will be worse.  I concede April will be as bad as March.  But will May and June?  And for that matter, will Q3 and Q4?  I'm not buying now with the intention of selling in a week.

 

Fed chair says this is the worst economy in history

 

How bad is the coronavirus economy? The worst ever, says Fed Chairman Jerome Powell.

 

"We are going to see economic data for the second quarter that is worse than any data we have seen for the economy," Powell said. "There are direct consequences of the disease and measures we are taking to protect ourselves from it."

 

https://www.cnn.com/us/live-news/us-coronavirus-update-04-29-20/h_20ffee0c7ad410075e8110c32442527c

Well, it's official. I suck at investing. I was holding on to about 5,000 thousand shares of MRO. But I watched the oil price drop and all the bad news about MRO. So I sold it when the stock rose back above $4 to about $4.20. Then the stock slipped back below $4. I felt vindicated. And then the stock shot up to near $6.40! I would have made a killing if I'd hung on to it for another week or two. Of course, knowing me, I would have held on to it hoping that MRO would return to its glory days above $40.

41 minutes ago, KJP said:

Well, it's official. I suck at investing.

 

I read on reddit last night about a guy who lost $100k of his $400k net worth in his first go at trading stock futures.  

 

Yeah I got out too soon.  I grossed $2,500 in April for clicking a mouse a few times so I can't complain, but I would have tripled that if I had held until today.

 

That said, I am out.  Whatever "V" was going to happen with specific stocks has already happened.  We're entering a murky era.  

5 minutes ago, jmecklenborg said:

 

I read on reddit last night about a guy who lost $100k of his $400k net worth in his first go at trading stock futures.  

 

Yeah I got out too soon.  I grossed $2,500 in April for clicking a mouse a few times so I can't complain, but I would have tripled that if I had held until today.

 

That said, I am out.  Whatever "V" was going to happen with specific stocks has already happened.  We're entering a murky era.  

 

Derivatives trading for most people is an absolute fool's errand.  It's like sitting down at a poker table with WSOP players and you just learned the rules of the game and had a few good runs with your friends' game.  I came to that conclusion after doing it on a small scale for many, many years, generally by selling puts and covered calls.  I did OK on the sold puts, but I had some positions called away that would have increased significantly in value thereafter (i.e., if I had just stuck to buy-and-hold investing).  I lost most of my ATVI position in the $15 range because of that, many years ago now.

 

The best way for a layman to bet on the future of a stock is to buy the stock.  

2 hours ago, Gramarye said:

 

Derivatives trading for most people is an absolute fool's errand.

 

I can't agree with you.  I love options trading and do almost all my actual stock trades by have the shares put to me if I'm buying or called away if I'm selling. In the case of MRO, I sold $4 puts at 65 cents, because I was perfectly willing to have the shares "put to me" and own the stock at a net of $3.35. And if it wasn't put to me, I'd just keep the 65 cents a share for my trouble.  Keeping the 65 cents has the added appeal of coming at no capital cost. The return is small in the quanitites I deal in (never more than 50 contracts); but the RATE of return is virtually infinite.

 

I confess the other thing I like about options trading is it's a zero-sum game. None of this 'piece of a bigger pie' b.s. ? 

Krugman makes the point that I assume most here already know - that stocks remain strong because low interest rates mean bonds are a weak alternative:

https://www.nytimes.com/2020/04/30/opinion/economy-stock-market-coronavirus.html?action=click&module=Opinion&pgtype=Homepage

 

In recent years we saw that many Wall St. people started dabbling in real estate since bonds have been so bad for 10+ years. 

 

Meanwhile, those who are still employed are still plowing tens of millions if not billions each week into their 401k's, which are overwhelmingly stocks.  

19 minutes ago, Dougal said:

 

I can't agree with you.  I love options trading and do almost all my actual stock trades by have the shares put to me if I'm buying or called away if I'm selling. In the case of MRO, I sold $4 puts at 65 cents, because I was perfectly willing to have the shares "put to me" and own the stock at a net of $3.35. And if it wasn't put to me, I'd just keep the 65 cents a share for my trouble.  Keeping the 65 cents has the added appeal of coming at no capital cost. The return is small in the quanitites I deal in (never more than 50 contracts); but the RATE of return is virtually infinite.

 

I confess the other thing I like about options trading is it's a zero-sum game. None of this 'piece of a bigger pie' b.s. ? 

 

And as I noted, the best options trading I generally did was selling puts (including as part of straddles and strangles).  But that still doesn't make up for the losses (in opportunity costs) I took on having positions called away when the market rose.

 

That said, also, the thing you like about options--the zero-sum game nature of it--is another reason most people are better advised to stay away from it.

So how is everyone doing this year. Excluding 401k which I don't bother tracking, I'm down 3.5 percent. 

3 hours ago, TBideon said:

So how is everyone doing this year. Excluding 401k which I don't bother tracking, I'm down 3.5 percent. 

 

My 401k portal has a grim "will this be enough?" message.  My answer is always "hell no". 

 

 

On 5/8/2020 at 6:57 PM, TBideon said:

So how is everyone doing this year. Excluding 401k which I don't bother tracking, I'm down 3.5 percent. 

 

I'm down about 4.5%, thanks to making proportionately big sales and moving into about half cash in December.  Had a good April, though, and May is looking good as well.

On 5/8/2020 at 6:57 PM, TBideon said:

So how is everyone doing this year. Excluding 401k which I don't bother tracking, I'm down 3.5 percent. 

 

 

This might be slightly off as I don't think Personal Capital tracks my HSA ROI at all, though it's pretty minimal overall.

On 5/8/2020 at 6:57 PM, TBideon said:

So how is everyone doing this year. Excluding 401k which I don't bother tracking, I'm down 3.5 percent. 

 

I've withdrawn significant funds from my investment accounts since the start of the year. Had I not, I would be right where I started on Jan. 1.

 

However, I've netted about 6% on two condo flips that sold last month. I had one for a year and lost a little bit of money on that, but overcame it with a nice a penthouse unit that I bought for a bargain and resold for my asking price.

Edited May 11, 20205 yr by KJP

On 4/25/2020 at 11:51 AM, Brutus_buckeye said:

I think Ramsey overall gives good advice, especially to his audience, so I dont fault him on that. He is just one voice in the world of personal finance guru's and he gives solid advice to those and he has their interests at heart. I dont think it is for everyone, and his audience tends to be of the background with little financial education from a young age, so he helps them there. 

 

Like anyone, his is just an opinion and people do not necessarily have to follow Ramsey's advice to be financially successful and responsible. Personally, I disagree with taking the credit score to zero idea because even if you do not ever carry a balance, it is nice to know there is a credit safety net there if you need it. Also, discounts and airline points are all beneficial when saving and extending your money. However, I get it, that much of his audience is listening to him because they were not responsible with the credit card in the first place, so may be reasonable to remove the temptation altogether I guess. 

I don't agree with Ramsey all of the time, but my high school personal finance class was run on his curriculum and it gave me such a great footing compared to my peers who did not get any financial education in high school. His anti-debt stance also made a lot more sense at that time because credit card debt was a bigger problem than it is now. And as I understand it, debit cards were a rarity 20 years ago and didn't become very common until about 10 years ago. https://www.statista.com/statistics/245399/number-of-debit-cards-in-the-united-states-in-millions/