Any heavy internet user, who likes thinking about humanity, will thoroughly enjoy this clip. Promise.
Of course the title of this post…is a subtle refrence to the greatest movie of all time. This TED talk, reminded me of it…just a little.
That the pollution haze, alt. energy phase, banking craze, water ways, derivative maze, urbanization blaze, crop yields on maize and inflation daze…have given me too many ideas to throw money at, I just don’t know which ones are best.
Pollution and energy are two big problems, combine that with urbanization and CVA is likely to prosper. I think FAN, and TAN, are both good bets. Good banks will be fine, and it’s time to start buying value. Mind you, 300 out of the 8000 will fail, or more, but the rest will be ok and prosper on the new standards and previously failed bank clients. PHO has too many starting points to ideas for stocks…I still haven’t found the best ones. Combining the emerging growth with rising middle class, and world water problems HEK is likely to prosper. Urbanization has many vehicles, but right now I like TEX…can’t get enough cranes, etc. Crop yields are amongst the few things in the world that have risen nearly linearly for decades, that’s a good thing for planet earth and investors. Isn’t it ironic how every country in the world seems to have +5, 6, 7%, 2,2000,000% inflation…and the US is only just now starting to count it. Rising middle class in other parts of the world, SDA is likely to prosper. I also see CL doing well for the same reason. I like the new AFK/PMNA/FRN ETFs too, these are where tomorrows money will come from, get long these names and short the S&P, dollar for dollar.
This market has me second guessing myself, and every move I make. I’m not alone, that’s why it’s been volatile, and that’s why it’s will keep being volatile. Learn to Buy-Write. Short-to-Own.
Disclosure: I put my money where my blog is, when the timing is right.
I was listening to an audio version of the economist, when I had to drop what I was doing when I heard them mention Prediction Markets. A quick google search pointed me to intrade.com. Very cool. People bid on contracts that expire at either 100 or 0. It’s a market for a betting pool as to the outcome of any event.
Check this out:
Now I’m no expert, but get long Obama, get long McCain that seems like a 3% yield arbitrage. One of them is going to win.
Stock Market participants are more likely to dig these insights:
I took the data from their “probability of a US recession in ‘08″, made a moving average, then took a derivative and smoothed that out too, then mapped it to the S&P.
It’s interesting to observe the causality get weaker as the contract gets closer to expiring.
Check out the earlier surges in the derivative, they appropriatly correlate, a bit at least, to the market then a reversal in the derivative means a local max or min - in some cases - in the S&P…it’s a stretch.
How do I get long Prediction Markets? I want to invest, in the actual exchange. What a cool system, I am enthusiastic about it’s growth and want to see it succeed.
Learn & understand quality, not memorize & regurgitate quantity.
…this comes on the back of an 8 part video series with respect to the topic of miss-understood exponential growth, by the masses.
The series is presented by a prof, who lays out the simple arithmetic of the impossibility of infinite growth and then presents the corollaries and extrapolations with respect to demographics and energy.
It was nothing new to me, I’m sharing it with you, in case it’s new to you.
As oil rises, and urbanization trends continue, I’m thinking about what might happen. Shipping rates go up - duh. So, I think sales and margins will improve for concentrated solutions, where the competition selling finished products will be squeezed.
Eg. Canned frozen juice vs the 2L of ready to drink stuff. If you have to ship 2L, you’ll pay more to ship a very comparable product.
…just thinking out loud…likely many have thought about this already…it just hit me today.
Mad Hatter wrote a post and Ross has covestor. I know my friend Thiago is more informed than I, with a better memory, but a bit of a cowboy, and Howard likes to see all time highs and good price action, and Joe told me a while back that he reads and buys quality. Any time any of them say they are buying something I get a better picture of what that means, how much work they’ve done, etc. Its useful, to me at least…sooo…here’s my story:
I buy on 1. ideas/trends 2. fundamentals 3. momentum 4. recommendations. 5. volatility/liquidity of derivatives
My ideas come in the form of trends and observations I read about happening all over the world. Fundamentals are a high priority, I use morningstar premium to help me with that, I find their research great and useful. Momentum is great, and can be scary, I won’t touch momentum if it’s in a field I don’t understand, nor stupid high PEs, but ~25 and under - I’ll look at. Recommendations are high on my list, that means managers of hedge funds, money managers, friends, family and reader(s?) all get a high priority in my infinite search for good stocks. If a stock is trading with liquid options, it will get a higher priority than the one without, especially if implied volatility is generally higher - I like writing calls / shorting puts. I rarely ever use technical analysis, although I probably should. My holding time frame plans range from weeks to 50 years. Once I buy, I feel committed and prefer to hold through anything. Like my AAPL buy at $178 a few months ago - held right on through. I don’t use stop losses, I get that from my dad, he retired at 42. “If you liked it at $40, you gotta love it at $30″ is what he’d say.
I have a checkpoint set at 18% a year, but a goal of 26% per year…after taxes.
I currently have two accounts. The first holds positions in 19 tickers, right now. The only tickers where I’m not long the stock is FSLR and FCX I’m just short the $210 and $90 puts. I have 6 other open option legs where I offset the downside of my long positions by writing out of the money calls. I’m doing this to CCJ, JCI, and ITU. I’m also long calls on JCI and short puts on CCJ, these are both separate legs, aside from a long position in the stock. Right now this account is 14% cash, and no holding ever gets larger than ~8%.
I’ve just recently opened up an account at Interactive Brokers. I added more almost immediately because I liked them so much. I opened it to program an algorithm to manage a buy-write for me, on several ETFs. That is going slowly, and looks like it might not work that well. Regardless, I’m going to manage a less complicated version of the algorithm, manually. I own four ETFs, that I actively trade the front month calls on. HXU.TO, SSO, VWO and FNI. I know HXU and SSO have issues with losses/slippage, but I’m sacrificing that slippage for volatility in the form of capturing option premium. I’m 103% invested right now, if you don’t count the fact that i’m twice exposed with the two double longs. I plan to keep this account nearly 100% invested running my buy-write.
Equity is broken up ~63% (Investments) /37% (ETFs/Buy-Write)…I plan on keeping a ratio close to this, and if I beat the markets in the “Investments” account - cool, but right now, if I lost it *ALL* my “Investments” account and never added cash to the other, so long as I get index like performance on my “ETF account”, I could still retire in less than 30 years…no matter what.
My current watchlist which basically means I’ll write puts out of the money on these stocks all day long (and hopefully get assigned) include: FSLR, FCX, JCI, VE, CVA, MIL, CCC, IBKR, MORN…as well as a few others I can’t remember right now.
…I’m long the flow [of information], have been for a while. What I mean by this, or the state of “being long the flow” is…
I consciously invest my time in reading, sharing, contributing, communicating…etc.
I try to do it in a positive, efficient way, and I hope to earn a return. Like any investment…hence the “get long” part. I use google reader, and try to remember to share what I find interesting. I try to do it in my tweets, I try to do in my blog posts, in my comments I leave, and in generally everything else I do…online and offline…cause anybody you share stuff with, might benefit, and also share something in return. That’s the present value, the impact if you will.
Don’t get me wrong, it’s not just money…tons of reasons to be informed, and to inform others…be it an idea, opinon, or fact. I’ll leave it with you to extrapolate the upside.
While this might seem obvious, especially to bloggers, I’m not sure people actually consciously think about going out of their way to share stuff and communicate value.
ANYWAY I’m rambling….but with good intenstions…because if everybody jumps on the ‘long the flow’ bandwagon - we all win.
SOOooo…I’m glad to be part of the early adopters of @StockTweets, I’m pumped to see what comes out of it. I’m glad to have known Soren, by the way…he’s going to be a new dad soon, and as far as I know, he doesn’t even trade stocks. Talk about generous. No doubt he’s as busy as all of us. Anyway, @StockTweets unknowingly added to my thesis of being long the flow. Yes, this post is just me, trying to spread the word…so go follow, and flag stock symbols with the ‘$’.
Soren, if you need a *.com hosted and some HTML/graphics with directions/syntax for new users/features…I could help you out, let me know.
I specifically watch the advertisements on TED, because the companies sponsoring this stuff, deserve my eyeballs for a few extra seconds. Watch this video.
In a global economy, if you’re not adding value, you’re going to be left behind. If you don’t carve out a niche for your own importance, well…there’s a bunch of Indians and Chinese who are going to out-run you. Totally serious, trends are scary, education is being commoditized. Make no mistake, if you are not a leader, you will be forced into the opposite. For the followers, or the ones not adding value, the world will make sure to it that your life will suck…I’m talking to the growd under 30 and not a millionair or happily married.
I’m 23, ready to start making impact. I’ve got a modest advantage compared to my peers financially, so I’ve got to put it towards good use. Nothing was ever handed to me, I worked hard…so don’t hate.
The question is, what niche do I carve myself?
Right now, I’m thinking Solar, Wind, or Water. These are areas that are going to be important for the next 100 years, at least…(right?)
Thanks to my diverse degree in engineering, I’d understand the technology deep at the roots of every one of these topics, but now which one should I run with?
Yah the capitalist in me knows that if you become an expert in any of these fields, it should lead to amazing returns in the ‘folio…BUT it will also lead to opportunities to contribute to society some way some how - obviously, as an engineer, I’m speaking in context of innovation but, but I mean I don’t want to waste my brain, time or money on designing the next UI for RIM, or checking sodium meta bi-sulphate levels at Ontario Power…been there done that. That work is for [educated] zombies. Like, actually do some good for the world….somehow…down the road. And maybe, i’ll never get my shot at it, but experts are tomorrows’ change agents…so I’d rather open the door, leave the option, to potentially become a change agent reather than definately stay a zombie.
I’m talking about marrying a trend here, for life, and serious about it…like…live, eat, and breath a trend…so I can have a chance to make impact. I’m talking present value.
In-case you can’t tell I have an incredibly amazing obsession with the capital markets. Passionate. I believe anybody else that blogs about stocks or the markets, does as well. Now what would happen if these passionate people all got together and used their powers collectively, to run a fund? A fund run by bloggers. The team would also have the added leverage of being geographically spread out, I think that’s good.
It could work like this: Every manager has the power to nominate a stock, as well as quantity, and limit price. Everybody votes, and unless it’s unanimous (or like 4 against 5) we don’t buy. We would have two choice how to run it, we could average the quantities in every-one’s vote, as well as the limit purchase prices, or we scale in using everyones votes as separate orders. Cash management and degrees of leverage (if any) would be continually taken into consideration of every vote we cast, Hypothetically we would end up only buying the best ideas and we would more able to pick a smart purchase price. There could be bonuses tied to the performance of your cumulative votes. This is all open to discussion, but the ironic part is, we could run this idea (either paper trading, or the real thing) through a blog. We all get a login and password, and write posts to nominate a stock, or a list of stocks. Then in the comment thread the other managers vote. With a committed team, we could easily test out this idea…so, I’m taking names of who is in.
With fund of funds out there, not that I’m positive on this, but a $20M fund, I want to believe is easy to get off the ground. Set a high water mark of like 18%, take 0.25% off the base and 10% of gains after that. We could easily afford a 5 to 10 person team, each could easily make $20K - $40K the first year, and well, 3 or 4 years down the line, let’s just say ~$30K quickly becomes negligible. The fund would grow quicker, because we have the power to get the word out about it. Social Leverage.
Not sure how many people are as crazy as I am, so, I’ll be taking names for as long as it takes - could be a month - could be a year.
So for now, who is in to at least try this out on paper? Reply to this post, if you’re interested, and make sure you have a link to your blog.
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