what happened to RedManPlus? why is he banned? he was a good poster

One month stock picking contest. Obviously best strategy is concentrated bet(s) on most volatile stocks.

However, I assume screening for volatility is just going to give me stocks that have moved huge recently on news that is already known, and not necessarily the stocks that are going to be most volatile in the future?

Is there a way to screen for stocks whose options prices indicate wide discrepancies in possible future prices? Or any other ideas?

Yes, implied volatility. The volatility that solves the Black Scholes equation for the market price of the option.

Oooh, I actually just learned about this in class earlier this semester. vetiver, if you need help calculating this, let me know.

Serious question:

Are retail traders kidding themselves when they think they can time/beat the market and/or pick winning trades by reading charts, news or financial statements? Are wins and losses in the stock market by retail traders just variance and almost nothing to do with skill? Am I = ev throwing a dart then trying to read financial advice or articles/posts on why/when to buy a stock? Aren't there firms with 100000x the resources looking for undervalued stocks 24/7 and snatching them up long before you get finished reading the first page of the financial statment. Why do you think there is an edge left, why do you think you have the ability to find it?

Other than buying a diversied portfolio and setting and forgetting is it worth the time to trade as a retail investor other than to just hope you are on the right side of variance?

If there is some skill that can give you an edge (or if you retail trade and believe you have an edge), what is your edge/skill, how did you learn it and how would you recommend learning it?

I am not trying to discount trading as a skill, I am a new trader and just trying to gain insight into why I should trade into a market where I can't compete with pro's time and resources.

This is a question that's been asked for many years. I believe there is some skill, but probably much less than they would like you to believe.

Also, if there is some trading anomaly, it will likely go away, and thus, an edge is hard to maintain.

Lastly, analyzing financials is always a useful skill and can likely help you avoid some real losers.

Hey

Can someone help me evaluate what has more EV regarding 1 year term deposits.

Option 1: nominal interest rate is 5.4% and you get the interest and principal after one year

Option 2: nominal interest rate is 5% and you get the interest payment monthly, principal after one year

tnx

is the interest compounded the same? if so, 5.4% strictly dominates 5% as long as you're not trying to do something with the monthly interest payment.

Yes i believe the compounding is the same (yearly). No plans for the monthly interest, except maybe putting it in the same term deposits which would turn option 2 into monthly compounding sort of, and effective rate would jump to 5.11%??

What are your thoughts about these stocks for a long term investor with a 17-20 year time horizon?

Hyg
Arr
Ohi

All stocks would be using the direct reinvestment option.

Thoughts on Reits in general for a long term investor? The yields are so attractive...

So what is this fiscal cliff stuff? Is there going to be a recession? I have some money i want to invest. Gonna put them into vanguard, a mixture of the Total Stock Market Index Fund,Total International Stock Index Fund, and Total Bond Market Index Fund. I might just put them into a target retirement fund if i dont figure out what asset allocation i want to do. Should i wait til the new year and see if all the funds drop? or dont worry bout it and just buy it now?

i haven't actually done a compound interest problem in this century so maybe i'm rusty, but if the interest compounds yearly then how would you be getting a monthly interest payment?

anyway, i'm pretty sure this is just a math and/or "find a website that does the calculation and plug in numbers" problem. gl.

federal tax rates may change, which may affect the economy.

no one knows.

sounds good.

i like TR fiunds.

i also like the three fund portfolio. if you want to go that way but don't know what AA you want, you could start with the AA of the TR fund you're thinking about buying.

either is a fine option with its own pros and cons (generally, flexibility/tax-efficiency vs maintenance effort).

i can't find it, but a quote i read once: "when is the right time to invest? when you have money."

Wrong. Less risk equals more reward, and the longer the time frame the better it works.

Imagine going to a local real estate tax sale where you buy houses at the county court house. Let's say there are 10 houses at this sale, and they are all worth 60K retail (lots of areas have houses worth far less than this that go into the sales). If you buy all 10 houses at 40K each your risk is far higher than if you buy all 10 houses at 20K each. Less risk equals more reward. Just because it might take months or years to make the money back in rents or resales, does not mean that you are at risk. The less you pay, the less risk you have, and the higher your gain.

Take that same town and imagine being able to buy 10 businesses, or pieces of 10 businesses. You could take all year to look at the books of each business, and you would have a good reference point as to the quality of management, as well, since you lived in the town. In this case you would buy the businesses that gave you the best investment value. The less you paid for quality businesses the less risk you would have.

There are tons of opportunities out there. Most people don't spend the time to really understand what investing is all about. True investing has you thinking like you are the owner of a business. Even if you have shares in a billion dollar company, if you think in terms of owning the business, you will invest in better companies.

Most people just chase stock prices and that is why most people lose. They deserve to lose, since they aren't willing to understand the basic rules of the game they are playing. Wall Street extracts a ton of money out of these people each year, and deservedly so.

sick bump. also, what are you talking about? cost != risk.

Hey, I'm curious if anyone has done a mortgage refi recently and what their experience was?

Did you use any sites to price match or just go through your standard bank?

Especially interested to hear from anyone who has a non standard job/income (like trader or poker pro or entrepreneur). Thanks

I've never posted in BFI before but I've lurked a good deal, as with the majority of the threads on 2p2. I didn't want to start a new thread with this idea. I will post it here and hopefully be able to get the same amount of feedback/answers/criticism that I would receive if I had started a fresh thread.

My idea is by no means revolutionary but I do know that you don't have to reinvent the wheel in order to make money. I'm thinking of starting a community newsletter for my neighborhood. I know that there are communities that have home owner association newsletters that are sent out to their residents but I would be willing to say that most people live in neighborhoods that do not have hoa's. Residents would opt-in for these monthly newsletters and it would all be supported by advertisements from local businesses.

The idea is simple. The execution is the hard part. Any ideas/advice/criticism or anything else anybody can offer?

I'm Canadian. If I go live in another country (e.g. USA) for a while, and I sell my stocks with profit, where do I pay taxes?

This is a kind of random question, but I'm trying to learn more about finance the following situation came up in an example.

What factors might cause the price of a futures contract to increase while the value of the underlying asset remains relatively constant? The data looks something like this...



It is also known that volume has been decreasing over the same period and the bid-ask spread has been increasing.

From what I understand, the futures price relative to the underlying asset depends on the risk-free rate and any potential dividends or payments. So could something like this happen if there was a change in the risk-free rate or the dividend scheme? I could also see this happening due to a change in holding costs, but the example was supposed to represent an equity that wouldn't really have holding costs. Is there something else that I'm missing?

this can't really happen with equities (though i suppose it can since there isn't a scale on the graph). the inability to arbitrage it due to prohibitive holding costs (ie. logistical problems; storing oil etc. isn't always easy) or perhaps because the underlying is perishable are most likely the reasons (assuming we're dealing with a commodity).

but you are right, in theory, with equities, that could happen if the expectations of interest rates were to go up or if the dividend was expected to drop. but if we're looking at the futures price being double the underlying as the graph implies, this would require some extreme **** to be going on.

Great thanks, glad my intuition was more or less correct. I forgot to put a scale on there, and I'm sure my masterful MSPaint recreation isn't perfect, but I think at its highest the futures price was about 10% greater than the underlying. It's possible that the data was just made a bit extreme to prove a point.

The question being asked was actually about factors that could have caused liquidity to decrease, and I think I got a little bit hung up on the odd pricing data. Over the same time period the volume decreases by about 30% but the spread increases by a factor of almost 8. The volume drop could be due to a new contract/delivery date being offered or something like that, but isn't that a pretty big spread increase for a modest drop in volume? I'm having trouble finding historical futures data to get a sense of what's realistic.

hello everyone,

I'm confused by the Short % of Float as seen here:

http://finance.yahoo.com/q/ks?s=NOW+Key+Statistics

Values are:

Float: 64.45M
Shares Short (as of Dec 14, 2012)3: 11.21M
Short % of Float (as of Dec 14, 2012)3: 48.50%

On this page (linked) it says the Short % of Float is calculated by the number of shares short divided by float.

Wouldn't that make the Short % of float 11.21 / 64.45 = 17.4%

What am I missing? How do I get to 48.5%?

Thanks!

futures often have a holding cost. If you look at the gas and oil etfs, they always look like a quarter pipe from a long time frame.

in my marketing course the final project requires me to find someone currently in the business for a few years to do a sit-down 30 minute recorded interview. anyone have tips on pulling this off? i guess i could put an ad on craigslist offering a free lunch for an intellectual discourse with a marketing person.

Question regarding hedging with options. I own some shares on stock which goes easily up and down 30% and has been trading between $1-2 for a couple of years now. I am planning if it goes a bit higher and gets closer to $2 to sell and buy back the stock when it hits 1.30 or 1.40 range.

However Even I believe it won't break through $2 which seems to be a strong resistance level there is always a change for break out and chance of company been bought by their bigger competitor. I believe stock price will go trough that $2 level but not just yet. I am planning to hold this stock for longer term but would this time try to sell it and buy back at cheaper price. I also plan of buying more shares if it goes down to a certain level.

Should I buy a call option where the strike price is at $2 in order to guarantee that I will profit in a case there is a break out or are there some better ways of doing it?