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  • The Real Reason Behind The Twist [View article]
    Quick note: "This is no different in that the government will pay borrowers say 3% on average while it “receives” 6% from inflation."
    I meant to say the government will pay lenders not borrowers (people buying treasuries are lenders to the government and expect to be paid back by the government).
    You get the idea though.
    Sep 23 02:37 PM | 1 Like Like |Link to Comment
  • It's Time For Americans To Become Austrians [View article]
    lol yea the Austrian's do. If we never spent more than we made and had a balanced budget 30 yrs ago we would be so much stronger. Instead we got greedy as a natino and then thoguht Greenspan and Keynesism = God.

    At least the canadian dollar is not trash like the USD. The USD will strengthen short term thanks to its reserve status and the Euro tanking, but long term I'd rather be paid in Canadian $$
    Sep 21 08:45 PM | 1 Like Like |Link to Comment
  • It's Time For Americans To Become Austrians [View article]
    Thanks for the compliment.

    I never said the government spends our savings. I said that people's savings (people who have money in a savings account long term and people holding bonds over the long t erm) will get crushed by inflation as it erodes purchasing power.

    Monetization/QE/stimulus is printng. wiht QE1 and 2 we bought our own debt via the Fed. Where do you think that money comes from? The printing press or a computer. Imagine you taking HEL and mortgaeg loans out from the bank and then securitizing it in say an MBS and then buying your own debt (the MBS). You are paying yourself interest on your own loans! It's absolute nonsense. We are printing money and increasing the money supply to try and make up for the velocity of money dropping as well as trying to boost GDP when consmer spending falls by increasing government spending. If you want to increase government spending wihtout going to the bond market or raising taxes you have to print.

    Thanks for the comment
    Sep 21 08:41 PM | 1 Like Like |Link to Comment
  • It's Time For Americans To Become Austrians [View article]
    thanks for reading. i didn't write this to discuss healthcare tho. There are many problems with our system and i dont know enough to discuss them all. I agree that the Canadien and German systems (to name a few) are superior in mnay ways as we spend way more per capita than other dveloped nations yet dont live as long. Anyway, that healthcare article i wrote was to point out a flaw in the system that often goes overlooked.

    thanks for checking it out and commenting
    Sep 20 07:02 PM | Likes Like |Link to Comment
  • It's Time For Americans To Become Austrians [View article]
    nothing against healthcare, i am for socialist healthcare actaully. i wrote an article for it on my blog weeks ago, http://bit.ly/op0ZJN check it out. Not sure how this became a healthcare blog.
    Sep 20 03:56 PM | Likes Like |Link to Comment
  • It's Time For Americans To Become Austrians [View article]
    Thanks. Appreciate your response. Yes inflation certainly is not the answer but the Fed and politicians view it as the lesser of 2 evils. Not sure I agree. They are biased in that it is much easy for them to inflate away debt then cut spending and force payment in real dollars. Domestic bondholders will see a negative real return just like the 3 decades after WWII. Check out my other articles, I talk about the issues with inflation there if you're interested. Can't write about everythign in one article or this would be a book

    Pain referring to cutting spending slowly instead of printing money (ie QE, stimulus, etc: Yes QE is printing money same as monetizing debt, Fed tries saying that its electronic so not the same: it is) no more easing policies, start making the gov smaller.

    No idea what you're talking about with CDs or what they have to do with anything. I think you confused us with Greece. We dont "supply" our own currency except when we print, we have to go to the bond market to raise debt to fund our current account deficit jsut like anyone else. Yes we can print money unlike Greece.
    Sep 20 03:48 PM | Likes Like |Link to Comment
  • It's Time For Americans To Become Austrians [View article]
    bentley has nothing to do with anything. most of what i learned i learned on my own or through the cfa. bentley was/is a good business school but school is a joke overall. one's real education doesn't start until you work. Mark Twain said it best, "I never let my schooling interfere with my education." Von Mises has some great papers and books out there. The Austrian way makes sense especially regarding the argument of not trying to play God through fiscal/monetary policy
    Sep 20 03:45 PM | Likes Like |Link to Comment
  • Bearish On The Market - Time For A Delta Neutral Hedge [View article]
    Of course. Thanks for your comments mihirshah. Was not attacking Fred. Honestly don't know where he got those numbers, maybe they are legit, but I personally have never had to post that much cash to support a short put position or heard of anyone having to. Good luck to you both!
    Sep 16 10:52 AM | Likes Like |Link to Comment
  • Bearish On The Market - Time For A Delta Neutral Hedge [View article]
    Fred I am not sure where you are getting that $25k number. If you use thinkorswim or many other brokers you do not have to put up that kind of cash to hold that position. You do not have to protect it to 0. Yes 25k is the most you can lost, but no broker makes you post that much in order to write a put. It is a lot less but varies based on the firm.

    You have to look at it from an odds standpoint. If you do that strategy 100 times and it only fails once and you only lose $1k when you make 99 x $250 all the other times then it's very good and profitable. You have to try and weigh the odds.

    Options are like gambling. You can play roulette or you can be the one spinning the wheel. You want to be the hosue. With options you want to make a lot of little bets with the odds in your favor so you win in the long run. You can stack the odds in yoru favor by having a view on the market or a stock and VOLATILITY (caps to emphasize importance).

    As long as you win 51% of the time after transaction costs you are fine. That's the game. It's a zero sum game justl ike the casino. They have an edge at roulette because ther are 38 numbers (0 and 00 and 1-36) and they only pay out 35 to 1 (not 38 to 1) if you bet on a number. They might lose big on one large bet if you put $1M on 19 and it hits, which is why they have limits at the tables and expose themselves to thousands of bets each day from players. This ensures they dont go bankrupt and win based on odds in the long run. Optoins are no different. Stack the odds in your favor. Be the house, not the gambler. Stay disciplined and patient. Make a lot of small bets with limits like a casino, don't bet the farm on one play. Sell rich iVol, buy cheap. The casino's 35 to 1 payout on 38 to 1 odds is like a bid ask spread that your broker will charge you, they are the ones that always win. They are the house. You can learn to count cards though and take money from inexperience traders that don't pay attention to iVOl or odds. Play the odds.
    Sep 16 08:47 AM | Likes Like |Link to Comment
  • If Europe Does Not Send Market Lower Earnings Season Will [View article]
    I believe, others may feel differently, that Best Buy is a dying business. Their earnings were part poor economy, but also part dying business. Amazon and WalMart will cut them out with online and cheaper offerings. BBY is a middle man and has more expenses than an AMZN that sells the same product. Just like AMZN helped bankrupt stores like Borders, I think BBY will follow.
    Sep 16 08:37 AM | Likes Like |Link to Comment
  • Bearish On The Market - Time For A Delta Neutral Hedge [View article]
    I am not and will not be in front of a BB for some time or a brokerage platform where i can look at volatilities so it's impossible for me to make a strike recomendation. However I would do a put spread. Buy an at the money or just out of the money put and sell one that is further out. The market will not go to zero, it never has, which is why it does not make sense to pay for insurance to zero. A spread would be preferable here. Look at buying calls on the SPXU. I believe (based off of stale finance yahoo prices) that you could do a DEC call spread (buy the 17 and sell the 30 or 36 or whatever) for maybe $2 or so ($200 per spread). There is not a lot of liquidity but the risk/reward characteristics are good because you only risk 200 for something that i believe you ahve a good shot of making money on and can make a lot more than you can lose. Look at the implied vol of the call options on SPXU and compare it to historical of SPXU. SPXU is bearish so it goes up when the SPX goes down which is why doing a call spread is the same as doing a put spread on the SPY.

    Hopefully that helps. If iVol is cheap relative to historical vol (look at various time periods) and you think historical is a good refelection of what the future will bring, buy the spreads. Its a good hedge against any long positions you have, maybe do a spread to make yourslf delta neutral relative to you AAPL puts you sold.
    Just some ideas for you to ponder. Thanks.
    Sep 15 04:52 PM | Likes Like |Link to Comment
  • Bearish On The Market - Time For A Delta Neutral Hedge [View article]
    Hi mihirshah,

    Thanks for you comments. Personally, I would not sell SPY puts right now. I believe it is too risky given the liklihood of a recession, poor earnings, and Europe blowing up. That is why i focused on blue chip stocks while shorting the SPY to make $ off the "spread" if you will. Obviously it may turn out that selling SPY puts is very profitable, I just don't like the risk/reward characterisitics. Since you are knew, I think the best book on options out there is Option Volatility & Pricing by Natenberg. I have read 5 books on option trading, certainly not them all, but that was by far the best.
    Sep 15 04:34 PM | Likes Like |Link to Comment
  • Bearish On The Market - Time For A Delta Neutral Hedge [View article]
    Your opinion. If you understood this you would like it. Clearly you don't. I dont even know what mickey is saying, if he read my previous articles obviously he would know I know as anyone does this is a macro environment. My blog is called The Macro Hedge for a reason. Love when people comment without reading.

    Anyway, being long calls is going to hurt you. You might get lucky short term, but earnings will collapse 3Q and 4Q if Europe doesn't blow before then. One or the other will send the mkt lower. Shame on you for posting and not having a solid understanding of implied volatility, the Greeks, and options in general. You have to have a lot of money for my strategy. You sell a basekt of OTM puts, chose whatever strike you want, 250 was arbitrary, and then you delta hedge shorting the SPY. You will reduce risk and make money on a series of bets over time (hence the rebalance) that the market goes lower faster than those blue chip stocks.

    Anyone with a basic understanding of options knows you get better odds selling OTM puts thanks to the demand for buying them. selling puts is bullish (just like your long call position but here you have a better chance of actually making money), which i am not. The delta hedge shorting the SPY gives you the best of both worlds. This is a legit strategy. If you don't feel comfortable with it that's fine. But to trash it is a joke. Don't focus on a dumb detail like 250 Dec APPL puts (which were selling for about $3 at the time and its about iVol and odds not nominal price) and pick a strike you want. Focus on the general strategy not some random strike. I specifically said to tailor it to your needs and thougths on future vol and the market. This is a general strategy to reduce risk and make money off of a downturn.
    Sep 14 01:21 PM | Likes Like |Link to Comment
  • The European Debt Crisis In 3 Charts [View article]
    This is a great article, thanks
    Sep 13 11:59 AM | Likes Like |Link to Comment
  • The Real Risk With SodaStream International [View article]
    Yes I apologize I said Gaza Strip by accident. page 17 states West Bank. The point was that it is located in disputed territory. I am aware of the boycotts, can't write about everything or it would be 30 pages long. Made a mistake. Page 18 of the annual talks about violence in the Gaza Strip which is why I mixed them up. Again, I apologize.
    Sep 11 11:14 AM | Likes Like |Link to Comment
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51 Comments
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