The Ups And Downs Of The New TVIX Premium [View article]
Here's a somewhat theoretical question: since the suspension of TVIX unit we've seen a crash in the March VIX futures. Do you think that the decoupling of TVIX from the futures had anything to do with this move? It makes sense that since CS is no longer pushing the TVIX moves through to the futures, that the futures would at least stabilize and not exhibit the crazy up and down moves we saw last week versus a relatively calm underlying market.
A Return To The Gold Standard Could Destroy The Modern Economy [View article]
This is a great article, and I've been saying the same thing to my friends for years. Since the amount of gold grows slower than the population, the long-term result is deflation.
And although your article doesn't cover this, I don't see how your conclusions lead to a short on GLD. The price of GLD is often divorced from reality, and it could go anywhere at any point. It's a "risk on" asset one day and a safe haven the next. It's an inflation hedge one day and a deflation hedge the next day.
I don't trade GLD, so I don't have a horse in this race, but it does not seem that it submits to any type of fundamental analysis.
Billionaire Phil Falcone's Top Stock Picks [View article]
Isn't this the same Phil Falcone who lost billions on LightSquared networks, whose fund was down 47% last year, and is under SEC investigation? I'd be inclined to bet against him at this point.
What The Market Wants: It's A Conundrum [View article]
At the time of the afternoon weakness, oil was up $2.65 per barrel. Each $1 increase is X billions out of the pockets of consumers. Gasoline is already above $4/gallon, and when producers switch to their summer mix, prices will increase even further. And this at a time when the gasoline demand is lower than the summer of 2008 when prices skyrocketed.
So today's midday selloff was easy to explain, IMO.
Much of the news you describe was already priced in.
Oil prices and Iran (different but related factors) will take weeks to play out. Even though I'm long VXX, I think these factors will play out over weeks rather than days. Actual volatility is starting to creep up, but the days will be quiet for a while. I don't foresee any radical moves for tomorrow, either up or down.
The market feels to me like it's waiting for something. Personally, I don't think it's yet priced in Iran's brinkmanship. So if something does happen there, it will be a shock and a catalyst for a selloff. We've had generally good news for the last 2 months, with no pullbacks to speak of. It's just a matter of time.
Contrarian Idea: Buying Natural Gas When Everyone Hates It [View article]
Despite the contango issues in UNG, it's good for short term speculation, especially when the price is low. I bought at an average of 5.08 last week, already sold for 5.38 earlier this week. But you're right, you do not want to hold this for months.
The contango issues are going to be most severe when the price is at its lowest. What it's telling you that the futures are expecting a big price jump between this month and next month. And that's a good sign.
Long options have time decay as well (100% per month if you're buying front-month options), and some people are able to make money in that. Time needs to be considered in both options and futures. Think of it as "rent" or "vig" to stay in the position.
Whipsaw Wednesday: Party Like It's 1929 [View article]
I have sold naked puts once or twice, and short strangles once or twice (two puts in either direction far from the money), but I find that a credit spread (bear or bull) is a much better use of margin money. That is, the percentage return versus the margin you have to post is higher. In both cases you're posting a lot of money for small gain. For a credit spread, your losses are limited, whereas with the naked put and short strangle, your losses can be huge. REALLY huge. If you run into a black swan once in a decade event like 9/11 or 1987 or the flash crash, you could easily lose all the money in your account.
Even when I put on my credit spreads I try to use less than 50% of my account in margin. That way, if a black swan comes along, I still have 50% of my money left.
Whipsaw Wednesday: Party Like It's 1929 [View article]
You have to consider risk/reward. The 500% trades will lose most of the time unless Phil has some secret I'm not aware of, and that's not a knock on Phil.
Also consider the bid/ask spread in thinly traded options. Even in Google options I often can't get filled in the middle.
No contest on this. As someone who placed his first trade in 1989, the ease and exponentially lower cost of today's trading makes it a great time to be an individual investor.
Whipsaw Wednesday: Party Like It's 1929 [View article]
I know this is off-topic, but if you have any credit card debt, pay those off first. That's a "sure thing" return that you can't get in the stock or options markets.
Beyond that, $25,000 - $30,000 is the point at which you can flexibly trade your ideas. At that point, you can go short or long, do options spreads, and day trade without limits. Since investing in general relies a great deal on your money management skills, saving up a stake is good practice for what you'll have to do in the markets.
I had a Vanguard account and limited myself to only their mutual funds until I built up a stack in the 6 figures. At that point you have enough to take multiple positions so you're not betting everything you have on one position. Otherwise, you may as well go to Vegas, and you'll have more fun there as well.
One other thing: At $1000, a $10 commission is already 1% of that. To buy and sell a position, you're talking about overhead of 2%, and that's assuming you can invest the entire $980 down to the penny. Seriously, you can get better odds in Vegas, since there are many bets that have less than a 1% edge.
Whereas with Vanguard, you can get mutual funds for as low as 0.1%, which is 1/20 the cost.
Since Feb 2, when it closed at $455, Apple has not had a down day, now printing at $524. I wonder if the Apple faithful can even entertain the idea that it will ever have a down day again. I think your 80% of success is too high, you can't apply a lognormal distribution to this stock. We don't know what the probabilities are any more.
Could Chesapeake Be 2012's First Solar? [View article]
To elaborate on your point about transporting natural gas, the price today for 1 MMBtu in the US is $2.50, while in Japan it's $16. Gives you an idea of how difficult it is to transport natural gas.
Rayboy, It's not SA's fault. My original title was almost as sensationalistic, but longer. Next time I will narrow the title focus as much as I can as to not imply that I'm trying to claim more than I am and avoid unnecessary controversy. This is my first article, and it's an ongoing learning experience.
I think that pumping only works if you're peddling illiquid penny stocks to unsophisticated, first-time investors. Even someone as influential as Larry Fink of Blackrock who said this week that "investors should be 100% invested in equities right now" (even though he himself isn't) -- I can't imagine many people running out and selling their bonds and trading into SPYs on the strength of that statement.
It's not only authors who are smarter than that, SA readers are smarter than that as well. It's hard to imagine anyone regularly reading SA being influenced by one article enough to take action. In fact, sometimes I use SA as a informal contrarian sentiment indicator, to get a somewhat incomplete picture of what the retail investor is feeling.
Everyone on SA is aware that you have verify and think about the information and decide for yourself. It's a level above Money magazine or Motley Fool. Like you say, I don't think any authors who have positions related to their articles have any illusions that it's going to move the market.
On the other hand, SA has some great information that you can't find anywhere else, and so I read it every day. I first learned about VXX here, and read all I could about it, both positive and negative. I started loading up on it last week, and it's been fantastic.
I'm sorry, I misread your comment. You're correct, I misstated that 82% of AT&T customer have an iPhone when the linked article says that 82% of AT&T sales in that quarter were iPhones. I'm sorry about that. Another factual mistake in my article. Thanks for catching it, I've submitted a correction request.
The Ups And Downs Of The New TVIX Premium [View article]
A Return To The Gold Standard Could Destroy The Modern Economy [View article]
And although your article doesn't cover this, I don't see how your conclusions lead to a short on GLD. The price of GLD is often divorced from reality, and it could go anywhere at any point. It's a "risk on" asset one day and a safe haven the next. It's an inflation hedge one day and a deflation hedge the next day.
I don't trade GLD, so I don't have a horse in this race, but it does not seem that it submits to any type of fundamental analysis.
Again, thanks for writing this article!
Billionaire Phil Falcone's Top Stock Picks [View article]
What The Market Wants: It's A Conundrum [View article]
So today's midday selloff was easy to explain, IMO.
Much of the news you describe was already priced in.
Oil prices and Iran (different but related factors) will take weeks to play out. Even though I'm long VXX, I think these factors will play out over weeks rather than days. Actual volatility is starting to creep up, but the days will be quiet for a while. I don't foresee any radical moves for tomorrow, either up or down.
The market feels to me like it's waiting for something. Personally, I don't think it's yet priced in Iran's brinkmanship. So if something does happen there, it will be a shock and a catalyst for a selloff. We've had generally good news for the last 2 months, with no pullbacks to speak of. It's just a matter of time.
Contrarian Idea: Buying Natural Gas When Everyone Hates It [View article]
The contango issues are going to be most severe when the price is at its lowest. What it's telling you that the futures are expecting a big price jump between this month and next month. And that's a good sign.
Long options have time decay as well (100% per month if you're buying front-month options), and some people are able to make money in that. Time needs to be considered in both options and futures. Think of it as "rent" or "vig" to stay in the position.
Whipsaw Wednesday: Party Like It's 1929 [View article]
Whipsaw Wednesday: Party Like It's 1929 [View article]
Even when I put on my credit spreads I try to use less than 50% of my account in margin. That way, if a black swan comes along, I still have 50% of my money left.
Whipsaw Wednesday: Party Like It's 1929 [View article]
Also consider the bid/ask spread in thinly traded options. Even in Google options I often can't get filled in the middle.
Tadas Viskanta makes the case that "there has never been a better time to be an individual investor" - never easier, cheaper, richer, smarter or more social. It's not a market call; it's about the incredible array of choices and options available, and the cost savings and efficiency that the merging of finance and tech have wrought. [View news story]
Whipsaw Wednesday: Party Like It's 1929 [View article]
Beyond that, $25,000 - $30,000 is the point at which you can flexibly trade your ideas. At that point, you can go short or long, do options spreads, and day trade without limits. Since investing in general relies a great deal on your money management skills, saving up a stake is good practice for what you'll have to do in the markets.
I had a Vanguard account and limited myself to only their mutual funds until I built up a stack in the 6 figures. At that point you have enough to take multiple positions so you're not betting everything you have on one position. Otherwise, you may as well go to Vegas, and you'll have more fun there as well.
One other thing: At $1000, a $10 commission is already 1% of that. To buy and sell a position, you're talking about overhead of 2%, and that's assuming you can invest the entire $980 down to the penny. Seriously, you can get better odds in Vegas, since there are many bets that have less than a 1% edge.
Whereas with Vanguard, you can get mutual funds for as low as 0.1%, which is 1/20 the cost.
Traders Rejoice? Nope [View article]
Whipsaw Wednesday: Party Like It's 1929 [View article]
Could Chesapeake Be 2012's First Solar? [View article]
http://on.wsj.com/wY1LFR
Also, if the price of natural gas goes up, say, 25%, how much will that add to Chesapeake's bottom line?
Why I'm Worried About Apple Growth [View article]
I think that pumping only works if you're peddling illiquid penny stocks to unsophisticated, first-time investors. Even someone as influential as Larry Fink of Blackrock who said this week that "investors should be 100% invested in equities right now" (even though he himself isn't) -- I can't imagine many people running out and selling their bonds and trading into SPYs on the strength of that statement.
It's not only authors who are smarter than that, SA readers are smarter than that as well. It's hard to imagine anyone regularly reading SA being influenced by one article enough to take action. In fact, sometimes I use SA as a informal contrarian sentiment indicator, to get a somewhat incomplete picture of what the retail investor is feeling.
Everyone on SA is aware that you have verify and think about the information and decide for yourself. It's a level above Money magazine or Motley Fool. Like you say, I don't think any authors who have positions related to their articles have any illusions that it's going to move the market.
On the other hand, SA has some great information that you can't find anywhere else, and so I read it every day. I first learned about VXX here, and read all I could about it, both positive and negative. I started loading up on it last week, and it's been fantastic.
Why I'm Worried About Apple Growth [View article]