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Hi stock thread, I have a couple of questions I'm hoping you guys can help me out with. First: I bought a small number of shares in a small company many years ago. That company went bust. I still have 20 shares of it in my TDAmeritrade account. At some point it seems like I ought to close that position so I can realize the loss on my taxes. But, it seems dumb to pay a $10 fee (or whatever it is these days) to sell 20 shares of a stock worth 0.0001/share or whatever. Is there a clear way to just close a position for a worthless stock for free? Second: I'm considering a small position (maybe a hundred bucks) in a stock that trades on the TSX Venture Exchange (in Canada). TDAmeritrade lets me buy it apparently, but lists it as a "grey market" stock. I don't really understand how this works. Is there added risk (on top of the inherent risk of the company/security) from buying a stock this way, rather than having some kind of brokerage access directly to the Canadian exchange? Thanks in advance.
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Apr 23, 2013 23:51
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R.A. Dickey posted:This may help on the first question. Hmm. OK, so, I bought 100 shares of ROBV on feb 6, 2002 $1.14/share. ROBV was subsequently de-listed from NASDAQ and became ROBVE. At some point, it had a reverse stock split 5/1 (so that's why I now only have 20 shares), and even later it became RVSI, went bankrupt, and became RVSIQ. Ameritrade lists it as having no value, so I assume that means it's worthless. But, when exactly did it become worthless? I'm... not entirely sure. Some time in/after 2004, I think. Ameritrade can't seem to give me anything about the basis, probably due to age and/or the large number of symbol changes. Based on my reading of your link, it may be too late for me to claim a loss. It's only $114, of course, so I'm only willing to jump through maybe one or two modest-sized hoops to get a $114 write-off on my taxes. If it's going to be any more work than that, gently caress it. Regardless, anyone know how to get TDAmeritrade to make it disappear off my portfolio forever? quote:On the second, its tough to tell without a ticker but its possible it'd be less liquid than if it were listed on a larger exchange. Its $100 though, so who cares. Should I give the ticker? I don't want to be accused of pumping a penny stock, I gathered from the OP that we're not supposed to name these things here. Leperflesh fucked around with this message at 02:29 on Apr 24, 2013 |
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Apr 24, 2013 02:26
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alnilam posted:Totally fine to give tickers. Look at all of us talking about AAPL. Alright. Well, I'm looking at Epicore BioNetworks. I like their prospectus, I like their products and what they do and their potential for growth (I think aquaculture in particular is a long-term growth industry), and their share price is attractive for a micro-position. The symbol is EPCBF. I found this stock through the following screening: Sector, Industry & Sub-Industry Biotechnology Revenue Growth/Loss (Last 3 Years) Growth ≥ 1.00% EPS Growth (Last 5 Years) ≥ 1.00% P/E Ratio (TTM) 0-20 That screen gives just four results. I was looking for small biotech with actual selling products and revenue growth; EPS growth and a positive P/E suggests it's not one of those pie-in-the-sky biotech hopefuls that runs at a loss trying to get to stage III trials with their heartbreaker miracle drug. Those things sometimes pay out and mostly don't, in my experience, so I've decided to focus more on microcaps that are demonstratively viable but have strong potential for growth or acquisition. But I've never bought a stock that wasn't traded on one of the major US exchanges before, and I don't know if I should know something in particular before doing so.
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Apr 24, 2013 18:09
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I wonder if it'd matter to Disney that Netflix's revenue model is different from some of the ones you mentioned. That is, most(?) of the other online content streaming models give away the content for free or nearly-free but make money on advertising, including unskippable commercials during stream-only programs that you cannot (or aren't supposed to be able to) download. The TV networks that let you watch their shows on their websites pretty much have to do it this way, because it's how they sell their shows in the first place. I guess HBO Go is one exception; you pay a subscription for HBO, you can also stream their shows commercial-free and uninterrupted. I think iTunes lets you buy content a la carte, and watch commercial free, but you don't pay a subscription? Netflix makes its money on subscriptions, and lets you watch programs uninterrupted, similar to HBO Go, but has a much larger catalog of content. I think the revenue model does matter, because of the way TV networks acquire and pay for shows.
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Apr 24, 2013 18:44
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Yeah the Hallmark Channel and the Lifetime channel and HDN so on can't charge very much to carriers, because the number of customers who'd call up Viacom or ATT or Comcast and upgrade to a premium package to get those specific channels are miniscule. They have to be very cheap and that means they have to have commercials. It's less excusable for channels like Comedy Central or Nickolodian, because they have much higher demand and viewership. But ultimately it's down to "they run commercials because they can, and it's unlikely they'd make more money by not doing so". I love comedy central but I doubt many people would pay $16/month extra just to get it, like they do for HBO or a sports package or whatever.
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Apr 24, 2013 20:12
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sincx posted:Is there a way to increase returns without significantly increasing risk? No. If there were, everyone would do that instead of using savings accounts. Fortunately, inflation is so low your money is not really losing much value sitting in a savings account these days.
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May 14, 2013 02:03
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Arkane posted:Pertinent chart for today: OK I'm just a novice but can someone explain to me how the above chart isn't total bullshit? What I am looking at, apparently, are two different metrics, tracked along the same timeline but with two different y axes. Each metric's y axis has been selected deliberately to allow the two lines to be mostly superimposed. But there is nothing inherent in either y axis to suggest that particular range should have been chosen. Right? You could just as well extend one y axis or another. For example, instead of showing S&P 500 range from $600 to $1800, you could have shown it from $0 to $1800 and that would have flattened out the line a lot, as well as move it upwards on the chart. Similarly, instead of showing EBITDA from $100 to $260, you could show it from $300 to $1000 and it'd drop down to the bottom and be below the S&P line. You could widen or narrow the scope on either one and the lines would no longer be similar to each other. It seems like the maker of the chart wants us to believe that the S&P tracks EBITDA, but that currently it is overvalued compared to EBITDA. But if you flattened the S&P by widening the range on the y axis, you could easily move its current value so that it's not way above EBITDA at all. What am I missing?
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May 24, 2013 08:00
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Have there been changes in how EBITDA is calculated during the period in question? I know it stands for earnings before interest, taxes, deductions, and amortizations... if allowable deductions have changed, if interest rates have changed, if tax rates have changed, any or all of those could affect EBITDAs for a broad range of companies across the board. Actually that raises a different question. Is EPS generally based on EBITDA, or the company's earnings after taking those factors into account?
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May 24, 2013 08:28
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Subsidized Stafford student loan interest rates on loans issued after July 1 are going to double (return to 6.8%), unless Congress acts. That might be a factor?
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Jun 10, 2013 04:01
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I've had two stocks I owned get bought. In one case, I simply received cash in lieu of my shares in my brokerage account when the conversion date took place; in the other, I received a notice from my broker that I had two options: cash, or an equivalent value in the buying company's shares, and if I failed to pick, I'd get the buying company's shares. The exact terms can vary from one deal to the next, and there is usually a long lead time between the announcement and the actual buyout (I think because with many mergers there's the risk that the government will block the sale for antitrust reasons, I'm not sure if they're required to build in a waiting period for this review or what). Another thing can happen if the people involved are jerks. A former employer of mine was purchased by a much larger company. We had public stock, and many employees had stock options, and our combined in-the-money-but-not-yet-vested and out-of-the-money options cumulatively amounted to a huge amount of shares - a significant fraction of the total outstanding shares of the company (I think like 30% or so). The company's board decided to issue a new, preferred class of shares. They gave themselves and the company executives the lion's share of these shares, in the form of "retention bonuses" announced at the time the merger was announced. These shares essentially devalued the public shares of the company massively. The buyout company then bought the preferred shares, gaining ownership of the company. They still bought the public shares too, but due to the devaluation they didn't have to buy as many of them, so the price offered was lower (but still at a small premium to the quoted price prior to the buyout announcement). This ensured that the vast majority of the stock options would never be in the money. The total amount spent on the public shares was actually less than the cash my employer had on hand, so for sure it would have been a higher valuation if they hadn't issued the preferred stock. The justification was that the preferred shares for the executives took 6 months to vest or whatever, and these "key employees" had to stay with the new company that long to get the money. So it would keep them from fleeing the sinking ship like rats the day the buyout was announced. It was a tremendously dickish thing to do that basically hosed over all the regular employees so that the execs could walk away rich, justified as being in the buyer's interest via the "key employee" contracts, and I believe they were sued by the (public class of) shareholders, but the company was small and its stock had been declining for years (this happened in 2003, the company had gone public in 99 or 2000) and I guess the lawsuit went nowhere. So yeah, there's poo poo like that that can be done, especially when nobody's looking, but it's much less likely when it's a newsworthy buyout. Leperflesh fucked around with this message at 02:48 on Jul 16, 2013 |
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Jul 16, 2013 02:45
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Pollyanna posted:Isn't there a significant luck component to this? And if people have been able to beat the market, that means there have to be some sort of rules or methodology to doing well. Hi. I'm a relative newcomer to this thread and not in any sense an expert. But there's something that is clear to me and probably to most people in this thread. If a hundred thousand monkeys threw darts at a big list of stocks and then each dart meant a $10,000 investment in that stock on that day's close, and then you sold all those stocks the following day: Nearly 50% would beat the market A small number would exactly match the market Nearly 50% would underperform the market. That's fairly obvious. Now, imagine the same scenario, but the monkeys throw darts and we invest in each security for an amount of time determined by spinning a giant Bob Barker Price is Right spinning wheel. Then we get out and the monkey gets a new dart. We do this for a year. You'd now have a bell curve. A bunch of monkeys would be near the center of the bell curve, modestly outperforming or modestly underperforming the market. A small number of monkeys, through sheer luck, would significantly outperform, and a small number would significantly underperform. The longer we run this experiment, the more the monkeys' performance will cluster around the peak of the bell curve. It will get taller and taller, with very thin legs extending out in each direction. After ten years, if we had enough monkeys, we'd have a situation where there were still a small number that outperformed the market by a large margin. These monkeys would be hailed as geniuses in the press, get high-paying jobs at investment firms, and write articles and blog and tweet and millions of people would hang on their every word, and ape (sorry) their every investment, and so on. That's technical analysis. Or fundamentals analysis. Or any other methodology. It's incredibly difficult to distinguish genius from luck. Especially when the monkeys aren't actually throwing darts at random, but are instead making decisions based on some kind of reasoning which we can only really analyze after-the-fact based on success or failure, because it's impossible to actually know exactly why every stock moved exactly how it moved, because we cannot know the minds of every human being participating in the market. I think the true test of a particular approach would have to be a statistical analysis that showed that a majority of those using the approach beat the market, consistently over a very long period. I don't think anyone has ever managed that yet. I hope someone will correct me if I'm wrong. e. I think I still favor FA, because I think human brains are especially good at finding patterns where they don't actually exist and/or aren't actually significant (so I disfavor TA). Then again, human psychology is also extremely good at rationalizing gut decisions, paying attention to evidence that supports our beliefs and rejecting that which doesn't, groupthink, and reacting very differently to positive vs. negative reinforcement of ideas. But I'm not sure it's possible to prove that Warren Buffet isn't just a monkey way way out on the end of a long thin tail of a bell curve, vs. a true investment genius whose methodology is actually foolproof. I think it's unlikely he's a monkey, but... Leperflesh fucked around with this message at 08:46 on Aug 15, 2013 |
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Aug 15, 2013 08:39
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abagofcheetos posted:The Fed just passed $2 trillion worth of treasuries. What world do you live in where: This post made me kind of curious. Do treasury auctions ever fail to sell out? If that has happened, has it happened recently? e. As an aside: I'm not well informed about bonds and treasury debt. I have the vague impression that the global appetite for US debt has been strong for decades. It seems like those looking for places to park money that are extremely low-risk still like US government debt. But, I might easily have missed any information to the contrary, since I haven't been paying much attention. Leperflesh fucked around with this message at 21:50 on Aug 20, 2013 |
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Aug 20, 2013 21:48
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Sergein Brin and Larry Page? Larry Ellison? Michael Dell? Bill Hewlett and Dave Packard?
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Sep 12, 2013 23:01
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The government has shut down because previously passed budgets only extended through Sept. 30th. As of October 1st, there is no (discretionary) federal budget. However, the debt ceiling, which we will not hit yet, is based on the government reaching the limit on its ability to borrow to pay its ongoing expenses, including debt servicing and also discretionary spending. But as of today, 800,000 federal employees have been furloughed, numerous federal agencies have closed their doors, and this means the government is not currently spending as much money as it would have if the government hadn't shut down. Since the date of the debt ceiling being hit was an estimate based on then-current spending projections, shouldn't the shutdown have some impact on that spending, and thus push out the date on which we hit the ceiling? I suspect the answer is that discretionary spending is a small enough percentage of total spending, and that discretionary spending during just a short few weeks is a small enough percentage of that number, that it will only push out the day we hit the debt ceiling by a few days at most, so nobody is really talking about it.
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Oct 2, 2013 07:27
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Makes sense, I suppose. Seventeen days of non-essential discretionary spending, minus the costs associated with shutting down non-essential programs, doesn't amount to even 1/365th of total non-discretionary extraordinary-measures spending.
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Oct 2, 2013 08:37
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Uranium 235 posted:Here's one reason: https://www.youtube.com/watch?v=CgWHbpMVQ1U What, we coat hydrogen cars in rocket fuel? Hydrogen is an extremely flammable gas, but it has to mix with oxygen to burn. And we have ways of making a compresed hydrogen tank pretty safe, and hydrogen fuel cells don't mix gaseous hydrogen with gaseous oxygen. Unfortunately, there are plenty of more important practical reasons why hydrogen-powered cars are not in the near future, unrelated to zeppelin fires or the dangers of compressed flammable gas tanks. (Right now I have a tank of acetylene and a tank of oxygen, right next to each other, in my garage. With the caps properly in place, I'd wager they're far safer than the hot water heater fired by natural gas that I also have in my garage, and which millions of other people have in their garages.)
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Oct 3, 2013 18:56
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Sanky Panky posted:
...except for dividends, surely?
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Oct 24, 2013 21:37
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greasyhands posted:The share price drops by the amount of the dividend. Theoretically. But only through the mechanism of bid/ask, which requires sales, which is where the zero-sum part comes in. Unless I'm grossly mistaken, which is certainly possible, which is why I'm asking... Generally speaking, the stock market is zero-sum because every transaction consists of a buyer and a seller; a security changes hands, the buyer gives money to the seller, the net is zero. The security's value may rise or fall, but until it is sold, that's an on-paper, unrealized "value" that is purely theoretical, based on looking at the most recent sales transaction that actually happened and extrapolating. When it is actually sold, money changes hands and net zero again; if you won, you got money from someone, if you lost, you gave it to someone, but at the end of the day, the total amount of money gained in the market, minus the money lost in the market, sums up to zero. But, now I think about it, there are three places where the market is non-net-zero: IPOs, dividends, and the unsold unsellable shares of a delisted, closed company. Specifically: -In an IPO, new shares are minted from nothingness and sold to the market. The initial share auction transfers money out of the market; buyers give it to the issuing company, and it is now "gone" from the market. That's a net loss to the buyers, who can only recover their loss by selling on the shares, etc. etc. -When a company is delisted and trading of its securities halt, someone is left holding all the shares. That someone paid for the shares, presumably, and now gets nothing; their value is destroyed. That's a net loss to the share holders. I think that the round-trip of an IPO and then delisting - call it the life-cycle of a publicly held company - results in net-zero. The rest of the time, the zero-sum game takes place as every winner requires a loser, and vice-versa. But dividends are different; you get money from the company's operating profits for each share you hold (as opposed to getting it from a buyer, who will then go on to sell eventually, passing along net gains and losses). In theory, transferring profit to shareholders (and out of the company) lowers the value of those shares (because the shares represent the value of the company), but that lowering-of-value is only realized when you sell the share... and someone has to buy it from you, you get their money, they get the share which stores the value they bought in, if it goes up and they sell they get more money but that money comes from the next buyer, if it goes down and they sell they lose money but the lost money is the difference which they paid you when they bought the share (so you have it), etc. It's that zero-sum game still, without considering the dividend itself. The money for the dividend comes from operating revenue of the company, not from other participants in the net-zero stock market trading game. That's why it's an exception to the zero-sum game... it's an input to the overall system. This may be a gross oversimplification or misunderstanding, but my take on what Sanky Panky was getting at by calling stock trading a zero-sum game, is the general idea that in order for one trader to win, another trader has to lose; in order to profit on a stock, someone else had to take an equivalent loss on it. I believe dividends act as a net input to the system, extracting value from the underlying company and giving it in cash to shareholders. Hmm. I guess if a company is purchased in a buyout, that's different from a company going belly-up, in that the shareholders are actually paid... then again, companies also buy back their own shares to concentrate them, which if they're doing with profits, add money to the system similarly to a dividend.... Yeah now I'm confusing myself again. Is the stock market really a zero-sum game? Leperflesh fucked around with this message at 07:11 on Oct 25, 2013 |
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Oct 25, 2013 07:06
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Gamesguy posted:No, the stock market is absolutely not a zero sum game. 90+% of the market is long, and when equities go up, there is wealth creation. Derivatives like options and futures are zero sum because for every dollar someone gains, someone else is losing a dollar. When equities go up, wealth creation is on paper, though? Like, if I buy one share of a stock for $10, and then tomorrow it is listed as trading at $15, the +$5 hasn't been "created" yet, it's just an on-paper gain. If I actually sell my share for $15, the +$5 isn't "created" either, it comes out of the pocket of whoever bought my share. Obviously I'm missing something here. I'm sorry for being obtuse, but if I'm confused about it, perhaps others are too, and it's worth examining. If not, please feel free to ignore the stupid newbie.
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Oct 25, 2013 16:56
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If a stock does not pay dividends, by what mechanism does the company's generated cashflow enter the stock market? I understand that it is recognized by the market in the form of a rising valuation, but that is realized only by actual purchases/sales at a higher price point, each transaction of which involves an actual exchange of cash between two people. Or to put it another way: are dividend payments the only reason the stock market isn't a zero-sum game? Bear in mind that I am assuming that, in the very long term, every company must die. Every stock that goes up, must come back down eventually. By "very long term" I really mean it, like, the lifetime of our civilization kind of thing. If we assume that eventually the stock market's total valuation must return to zero, every dollar that flowed in from purchases flows back out from sales, net-zero. Except for money paid directly by companies to their shareholders, such as by dividends.
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Oct 25, 2013 19:14
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Thank you those of you who responded to my stupid questions about zero-sum. I still feel unconvinced but I won't derail further, given it's more of a semantic argument than anything else. Re: real estate bubbles. I think there's been a tendency in the last couple of years to label anything with an accelerating rise in price as being "in a bubble," but (ugh semantics again) I think that's an inappropriate use of the word. We usually call something a bubble if the rise in price is unsupported by anything other than exuberant speculation - that is, buyers are buying only because they see a rising price and hope to cash in on it, without any attention to fundamentals. Bubbles are likely to "pop" because eventually the trend reverses long enough to scare speculators into selling, which tilts the weight of market sentiment ever-downward into a rapid crash. But there are plenty of cases where the price of something can rise, even rise dramatically or in a nonlinear way, due to factors beyond speculation. Simple supply shortage running up against demand which is inflexible to price can do this; an oil shortage drives gas prices up very quickly because most people's demand for fuel is relatively inflexible (still have to get to work, still have to heat my home, eventually I can get a more efficient car or improve my home's insulation but that takes a long time). The 2008 housing bubble in the US was driven by speculation. People were buying houses in a rising market out of a desire to cash in on a long-term trend of rapidly rising prices. They were taking out ARM loans on the assumption they'd sell the house before the introductory rate period ended. This was exacerbated by unwise lending practices by banks who were essentially complicit out of a desire for the fees generated by sales; a market in which speculators bought and sold every four or five years drove more loan origination and handling fees. Worse, the banks were able to (in theory) offload risk by reselling packaged loan products to a speculative market, and in particular, to investors that did not understand the risk these products represented. The bubble was able to grow so bad in part because of poor regulatory oversight of these products. There's more to it, of course, but my point is that a number of factors combined to form a housing bubble which was driven mostly by speculation. But that doesn't mean all rises in housing prices are driven by speculation. lightpole posted:I was looking at buying a house here in CA but every house I look at is getting multiple cash offers even with extreme structural and permit problems. Nothing has changed to make anything safer or people richer. Wages have dropped since the crash so people don't have more money unless they are emptying 401Ks or are foreign buyers or something. Wages have dropped, but unemployment is also down. The recovery in prices have allowed homeowners to get back above water. For five years, many homeowners have been making payments on underwater homes that they wanted to sell (for normal reasons, such as a desire to move to a new job, a better school district, a bigger home because they now have kids, and so on). There's a strong incentive for these people to upgrade before interest rates rise; lock in a good rate now because you're going to be paying for a long time. The population of California is also rising. But for the last 5 years, new home starts plummeted as developers refused to build in a lovely down market. The reactivity of home development to rising prices is inflexible - it takes years to acquire land, get planning permission, install infrastructure, and then build homes. So we have five years of population growth without five years of development, creating a larger than usual demand and a smaller than usual supply. So, is housing in California back into the upslope of a bubble? I don't think so. Certainly prices can correct downward... if interest rates rise significantly I expect that to happen for sure. As new development starts coming up for sale (next year should see a large new supply, as builders got busy in the last 12 to 24 months) that should take some pressure off some markets. If unemployment does not continue to recover, that could hurt prices as well. But a "soft landing" correction downward in response to these factors isn't the same thing as a bubble popping. If my house loses 10% of its value over the next two years, that'd be a reasonable reaction to such factors but not at all the same sort of thing as the 2008 crash. Similar factors could well be at play in Canada. Are prices rising due to speculation? Perhaps, to some degree, especially if foreign investors are pouring money into some markets. But as discussed, Canadian loan products are less prone to speculation than those being sold in California in 2007. It may be simply an inflexible supply response to rising demand. Perhaps Canadians who were worried about the economy in 2009 are more confident now, so there's a pent-up demand that is now seeing action. It's entirely possible that prices in Canadian markets could slump if demand tapers off or supply increases, but that shouldn't be equated to a bubble popping. It's also possible, I suppose, that there's a bubble. I don't have any special information about it. But the mere fact of rapidly rising prices, on its own, cannot and should not be taken as proof of a bubble in action. You need to know more facts about the situation before you can make some kind of informed judgement about it. Elephanthead posted:Canada has a competitive advantage on housing prices as global warming will begin eliminating habitable areas in warmer climates driving demand in colder climates. Is it legal for a US person to buy land in Canada? This strikes me as a gross oversimplification of the potential short-term (e.g., in our lifetimes) affects of global climate change. You don't want to build your house in an area undergoing rapid climate change, even if the direction of change is from "nearly too cold to live" to warmer. (Disclaimer: I am not saying the Alberta floods are definitely linked to climate change. I'm only saying that climatologists and geologists can tell you that rapid climate change tends to re-shape landscapes in dramatic ways.) Oh, and of course, rising sea levels are one of the biggest threats, and Canada's coastal developments are just as vulnerable as anyone else's. Leperflesh fucked around with this message at 20:35 on Oct 28, 2013 |
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Oct 28, 2013 20:31
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cowofwar posted:Hand waving aside there are many quantitative ways to assess whether a market is in a speculative bubble phase and most of these indicators support the existance of a bubble in certain sectors of the Canadian real estate sector. That said, the Canadian real estate sector is extremely diverse and many numbers are given for the entire sector as a whole which tends to miss all the smaller regional variables. There are sub-sectors that are in a speculative bubble (Vancouver, Toronto), others that are over priced but not in bubble territory (other larger cities) and some that are undervalued (upcoming cities with bad raps like Hamilton). It takes a lot of numbers and a lot of focus to assess market and talking about an entire country's real estate market as if it is homogenous is rather naive. Oh absolutely, I completely agree with you, and I hope I didn't imply otherwise. Lightpole's post that he was "looking to buy a house in CA" is a good example: Eureka is totally different from San Francisco, and both are totally different from California City. I've no doubt Canada is the same.
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Oct 28, 2013 21:22
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lightpole posted:I haven't made a judgement one way or another either in CA or Canada. The point was prices are moving and being driven in absurd ways. What or why I am not sure but there has to be something behind them. A limited supply of housing and improving debt loads can only do so much. Improving home prices leading to a feedback loop of improving prices is not a recipe for a solid recovery. Prices cannot be too far disconnected from wages, people have to be able to service the debt load or they will go bankrupt. Canada might not have a crash such as the US did but that doesnt mean everything is going to be peachy. This is the stock picking thread, so I hope this isn't too much of a derail, but, you do understand that rising prices has no affect on the mortgage of someone who has a fixed-rate 30-year mortgage, right? Just because my neighbor just bought a house on my block for $350k doesn't mean that my $240k mortgage is suddenly costing me more. The banks are no longer offering stupid negative-interest ARMs and subprime bullshit. People have to actually show they can pay the mortgages they're taking out. The prices in 2009 through 2012 were being driven almost entirely by foreclosures, which were dominating the market; now the foreclosures are gone, largely due to three factors:
What is driving rapid increases in prices right now, then, are (at least) three things:
Some of these will gradually ease off. New supply is possible in some markets, but not really in others (developers in the city of San Francisco cannot build new units fast enough to satisfy demand in the foreseeable future). The pent-up demand should gradually be satisfied as homes turn over and new homes become available. Some could stop suddenly. If interest rates rise by two percent in 2014, I think that could put a massive brake on home sales. But prices tend to flex only to the extent the interest rates raise mortgage costs, so a specific interest rate rise on its own should correspond only to a moderate drop in pricing. E.g., if I can afford a mortgage of $x per month, and rates rise by 1%, that only reduces the size of my mortgage so much... it doesn't mean I can't or won't buy at all. And probably the biggest unknown is the all-cash investor phenomenon. The rental market got really tight during the housing crash (which makes sense; people who got foreclosed on still gotta live somewhere, people who are scared to buy also gotta live somewhere, no new units going on the market, thousands of foreclosed properties sitting vacant, all that puts huge pressure on the rental market), and that probably attracted cash investors looking to buy up properties and rent them out for a profit. If the rental market eases up, that could cause cash investors to consider selling. Cash investors might also decide to move to other investment options, if they become more attractive - stocks, bonds, or just other real estate markets, I dunno. If there is a speculative bubble, though, this is where I think it'd have to be concentrated. But having said all that, here's why I'm not worried (as a california homeowner): State projected to add 4.3M people by 2020  I live in Contra Costa County, with a projected 10% to 19% increase in population from 2010 to 2020. That's a massive, massive upwards pressure on housing.
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Oct 28, 2013 23:00
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evilwaldo posted:there is no demand That's a pretty radical statement, in my opinion. Blackstone is definitely one of the big private investors buying properties up. We had a long discussion about this in the California thread, I think? But the idea that there's no demand for houses in California... I'm gonna go ahead and use the word "preposterous".
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Oct 28, 2013 23:17
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evilwaldo posted:Maybe in your neck of the woods but across the US housing demand is stagnant. I can tell you for a fact that home prices in my neck of the woods (Northeast PA) have stagnated for the last 20 years. Ah, OK. We are specifically discussing California. I have no idea what demand is like in PA.
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Oct 28, 2013 23:22
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evilwaldo posted:Here is a link from the thread as to how deep the hedgies are into real estate and single family homes. Thanks! I'll definitely give that a read. Here is a link to the segment of the California thread, back in July, where I argued at length with a couple of goons who had a sky-is-falling, hyperbolic reaction to some news articles about Blackstone etc. buying up properties (mostly in Florida): http://forums.somethingawful.com/showthread.php?threadid=3556974&pagenumber=22&perpage=40#post417696698 Assuming you paginate at 40 posts per page, the discussion goes from page 22 through maybe 24ish, so it's not that long of a read.
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Oct 28, 2013 23:56
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tiananman posted:Why is that? Seems like AMH has a pretty decent business model. I think rents are high compared to property values right now, but I don't think that's long-term sustainable. Renters paying more rent than the mortgage on their building costs can clean up their credit and qualify for a loan and buy the thing instead. I did this in 2009. My principle+interest+PMI+insurance+taxes on my 1200square foot home is less than the rent I was paying on my 850 square foot "cottage". Of course, this relies on people's credit recovering, having stable employment, etc. and that's not certain. But a long-term trend of a recovering economy should tend to push down rents as compared to housing prices and that hurts the profit margins of outfits like AMH. Also, as pointed out, this varies a LOT by market, and there may be markets where rents are going to stay well above mortgage costs for the forseeable future. If AMH, Blackstone etc. are smart about where they invest, maybe they'll stay ahead. I wouldn't be short or long a company whose price is some kind of complex derivative of real estate and rental prices, which itself is a complex derivative of the general economy, interest rates, and real estate regulatory environments. I'd rather make bets about those indicators themselves more directly, with REITs, or bonds, or bank stocks, or something like that.
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Oct 29, 2013 01:24
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Tony Montana posted:I hear you guys, but even with your replacement.. you're looking at a depreciation value that you have to factor this 8 year thing into. A Ferrari is worth a shitload new, and depending on the model just goes up over time, or dips as it's not the newest anymore and if you hang onto it long enough it goes up again because it's rare. You don't have to swap out the engine of it, if it's not been driven by idiots and maintained. Trading in a Tesla, how close are we to the 8 year warranty expiry? Almost everything you said about luxury cars here is wrong, and especially about Ferraris. -The vast majority of luxury cars, including Ferraris, lose a huge amount of value over the first five years and will never, ever recover that value -Ferarris have high-strung engines that wear out quickly, needing constant amazingly expensive maintenance, including occasionally needing entire new engines -Only a tiny percentage of exotic expensive cars eventually become "collector's items" that appreciate in value. You might be led astray by watching Mecum Auto Auctions or something, but it's important to understand that concourse-level restored cars have had tens of thousands of dollars poured into them to bring them up to a sufficient level of fit and finish to appeal to collectors; often that condition exceeds the level they had on the day they were made. The profit margin on restored collectible cars is often narrow and even more often negative. It's actually an ongoing joke over in AI, seeing how many people have ridiculously unrealistic expectations for the sale value of the car they've "invested" in restoring. Mostly restoring collectible old cars is a costly hobby. -Many luxury and exotic cars are driven by idiots and not maintained, especially cars that cost $100k and up. People who buy $100k cars are buying status symbols and/or expensive toys. They accept up-front that they will pay a huge premium for that utility, including expensive maintenance. Part of the reason that luxury cars lose such a huge percentage of their value in the first few years (compared to affordable practical vehicles sold to the general carbuying public) is that the market for used luxury vehicles is so weak. There is a segment of up-and-coming lower-level management types that will consider a 8-year-old Mercedes that originally cost $80k and is now barely affordable at $30k, but not really that many; they have to account for the $80k-car-maintenance level, and when cross-shopping $30k brand new Lexuses and BMWs, the 6-year-old Merc doesn't usually compare all that well. So basically what I'm getting at is that, if there is anything to be concerned about in terms of battery longevity affecting resale value, it'd be for cars like the Prius where resale value actually matters to new car buyers; yet, that concern hasn't really materialized (used Priuses hold their value pretty well). Maybe it will matter if/when Tesla starts selling cars that cost something under $40k, but it sure doesn't matter for the Model S. e. Search your local Craigslist for "2006 Mercedes" and marvel at how many are available in the $10k to $15k price range. Leperflesh fucked around with this message at 21:48 on Nov 12, 2013 |
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Nov 12, 2013 21:43
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Tony Montana posted:Thanks. I clearly have no idea about this. By the time the Tesla's battery warranty expires, it's depreciated so much, who cares. Perhaps it's even smart because the kind of people buying it in 8 years will be wanting their next toy (less probably) and don't give much of a poo poo if it's worth a fraction of what they paid. Buying a Tesla isn't an investment and you shouldn't think that's how buyers think of it. Exactly, yeah. I decided to just randomly check, for a comparative example. This 2006 Mercedes-Benz C55-AMG originally had a base MSRP, in 2006 dollars, of $54,450. With options it surely exceeded $60k. Today, with 93k miles on the clock, it's being advertised by a dealer at $16,885; after bargaining I'd expect to pay no more than $14k for it. That's fairly typical depreciation for such a car.
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Nov 12, 2013 22:03
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In the United States, student loan debt is non-dischargable in a bankruptcy. This makes it incredibly difficult for debtors to do anything besides eventually pay off their loans, even if that means racking up tons of fees and penalties while in default. It is one of the reasons the student loan debt bubble is so sustainable.
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Nov 25, 2013 20:14
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You don't need this thread, you need E/N. Your parents are willing to jeopardize their relationship with you over money, and that's unhealthy no matter what the particular money-issue happens to be.
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Nov 28, 2013 02:11
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Yeah there isn't really such a thing as a "retirement fund". Vanguard and several other outfits offer funds with target retirement dates, but really what they are are funds-of-funds with a balance that shifts from more aggressive (mostly stock funds) to lower risk (mostly bond funds) as they approach the target date. There's nothing preventing you from investing in one of those via your regular stock portfolio, though, if one of those happens to offer the mix you want. These funds are marketed and designed for retirement investors but that doesn't necessarily mean they're wrong for your shorter-term investments. But you can probably avoid a few hundredths of a percent in management fees by building a portfolio with the mix of funds you want instead of using a target retirement fund, and Vanguard certainly offers plenty of those too. If you just want an S&P 500 index fund, for example, you can buy VFINX. Investor class shares in that fund have a management fee ratio of 0.17%, which is very competitive. scavok mentioned ETFs, which are just exchange-traded funds. They allow you to buy shares of a fund the same way you buy stocks. If you've already got a trading account that might be convenient for you, but it's just as easy to open an account with Vanguard and buy into a fund, if you have the minimum purchase amount necessary to do so. For example, VFINX has a minimum investment of $3000, but you can buy VOO, vanguard's S&P 500 ETF, which carries an expense ratio of .05%, for $163 a share. Note that the tax consequences may be different for investing long-term in ETFs vs funds, and there may be other reasons to prefer one over the other, depending on your financial plans and circumstances. The main point is that you can invest in mutual funds in the medium-term using either or both methods, if what you want is to put your money into broad segments of the market without having to buy a huge number of individual securities. Keep in mind that if you live in the US and have earned income, you probably have the opportunity to invest in tax-advantaged retirement plans as well, such as an IRA. These are less useful for investments you may want to cash out in a few years, but there are exceptions to the early-withdrawal penalties for certain cases, such as buying a home. See the long-term investing and retirement thread for details.
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Dec 13, 2013 20:38
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CombatCupcake posted:Since they tend to be on an incline most of the time you can't really wait for big dips like with stocks. Yeah OK, I'll bite. This statement strongly suggests that you need to do a lot more reading and until you have, you should not risk any more of your money.
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Dec 13, 2013 23:30
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There are already hydroponics suppliers and some have been around for a long time. The issue with the pot thing is the federal laws against it means actual pot growers are all under a constant cloud of potentially being raided and shut down by the feds, so those are very risky. The hydroponics suppliers thus are also risky, at least in terms of having a market into which they can increase market share and sales, because nobody knows if this or a near-future federal government will sweep in to shut it all down or not. If congress were to act to legalize pot, or even just make it legal in states that legalize/decriminalize pot, I predict you'll immediately see the larger companies jump in and they'll have built-in advantages of scale, advertising, distribution networks, reliability, and brand name recognition. If congress fails to act to legalize pot, I predict that most of these small mom-and-pops will either go bust, or fail to grow well. Either way, I'd look at is a very near-term opportunity to trade the bubble, and try not to be on the downside when it pops. Basically gambling.
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Jan 8, 2014 23:03
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I always assumed that with (full) pot legalization, you'd see the cigarette companies jumping on it. With decriminilization and/or limited legalization (like medical marijuana) at the federal level, you'd instead see the drug companies (like Eli Lilly, Pfizer, etc.) jumping on it. In either case, you've got very big companies with established infrastructure and the legions of lawyers needed for complicated drug compliance along with the capital resources to crush whatever little guys had popped up first.
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Jan 10, 2014 03:23
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Cheesemaster200 posted:Why would a multi-national company invest anything in a product which is a federally controlled substance? What are you asking? I think we just discussed under exactly what circumstances a multi-national company might consider investing in federally controlled substances, and that's "if the federal government decriminalized or legalized pot, and not before."
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Jan 10, 2014 08:10
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Acquilae posted:My basic principle is the shorter the timeframe for entering/exiting a trade, the more you take TA into account. I don't "believe in" technical trading, but I think this is absolutely correct. If you are day-trading stocks, technical analysis is indispensable and necessary (because on a timeframe of minutes or a few hours, fundamentals analysis isn't going to tell you very much about how or why a security rises or falls a few points: the only thing you can really use to try to predict movements in price, is TA). But, I don't think most people should be day-trading stocks. Certainly nobody who is new to investing should be day-trading stocks, so it's not an introductory topic for investing. In the long term, I think the problem with TA is twofold. First, it's problematic because everyone is doing it, which amplifies the affect of whatever approach you're taking with TA. Or to put it differently: your TA algorithms have to account for what TA algorithms all the other TA traders are using, and that's very difficult because they're all trying to do the same thing as well. If you're using published information about TA, you can bet that most or all of the other TA traders have already taken that published approach into account with their own TA. To the extend that TA traders compete against each other, it seems to me that individual traders must be at a severe disadvantage compared to the major companies with highly-paid software engineers and traders who have faster connections to the markets, more money, and more researchers refining their TA algos on a daily basis. Thinking your own TA can compete in that environment strikes me as hubris. But more importantly, I think TA "works until it doesn't." TA can tell you a lot about what other investors are doing (or rather, what they just did, in the past, which is generally at least 10+ seconds ago) but it cannot predict unprecedented events. And I strongly believe that unprecedented events happen a lot, and sometimes they have very small effects on the market and sometimes they have enormous effects on the market. I think if you are making longer-term decisions (say, probably on the order of weeks or months, and definitely if you take positions that last for over a year), your TA is inevitably going to fail to predict the next big event that has an outsized affect on your performance. Not that it's always easy to predict big events using any approach. But I think some big unprecedented events can be seen coming through fundamental analysis, but that no big unprecedented events can be seen coming through TA (except to the extent that TA "notices" FA traders taking a big unprecedented event into account, e.g., TA can to some degree assess market sentiment on the whole). Of course, I'm what you'd probably call a neophyte investor, by which I mean, I'm much less well-read than a lot of the goons in this thread. My perspective comes more from paying attention to the news, and threads like this one, for about 15 years now. Leaving aside my personal beliefs, though, I can say this with confidence: a very large percentage of investors believe in TA even over the long term. There's also a large percentage of investors who believe FA is better, and many who believe TA is flawed. The conflict between these two approaches (including whether there is necessarily a conflict between the two!) is kind of a big important discussion that isn't anywhere close to being resolved, among academics nor among investors, at every level. I think in this thread when someone new comes in and starts asking questions, the right thing to do is to "teach the controversy," rather than just present one's own opinion as being correct. I really appreciate nebby's contrarian position on index/mutual fund investing, for example, not because I agree with him (I don't) but because a lot of very smart people evidently do agree with him (and he's cited a number of authors for people to go read what they have to say, which is extra-useful) and this thread is better because he's here. I think there's a lot of other financially-focused forums where people who take the contrarian position against the consensus in the thread tend to get run out, and that's not good for the health of the discussion.
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Jan 13, 2014 18:39
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I still have 20 shares of AMD that I bought on 1/20/2006, at $35.80 a share. I hang on to them because they serve as an important reminder to myself about limiting one's losses.
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Jan 22, 2014 18:06
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Tony Montana posted:Mm poo poo, AMD. There is a fairy tale gone sour. ATI is the part of AMD that actually makes money. Especially just at the moment: people who want to mine altcoins (litecoin and its copycats) are paying enormous premiums for certain lines of AMD graphics cards, because those cards are particularly optimized for the type of integer operations that these coins use. Nobody can keep them in stock. (Of course a lot of the profits on these cards are going to the resellers: AMD does not seem to have capitalized on the rush by raising MSRPs or wholesale prices.) If you happen to own an AMD HD 78xx or 79xx card, it is almost certainly worth far more on eBay right now than whatever you paid for it. AMDs CPUs are not competitive with Intel for most segments of the desktop and laptop markets, and lately Intel's also been beating them on notebooks and tablets as well. But AMD is still very competitive with nVidia in the graphics card arena, even leaving aside the whole bitcoin/altcoin mining frenzy.
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Jan 22, 2014 18:20
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AMD has put a lot of money into developing CPUs that combine traditional CPU and advanced GPU functionality on-die. They're calling these things APUs, and nobody else has something quite like it. These chips are in the PS4 and the Xbone. They haven't turned out to be widely desirable for ordinary desktop or mobile PCs (yet) though. Maybe it will turn into a cash cow in the future, but nobody can say for sure, and in any event the fact that AMD isn't competing on price/performance across most of the range of desktop CPUs, combined with the fact that desktop computer sales were down significantly in 2013, means AMD isn't getting the flagship product revenue that it needs. AMD has the same problem it's always had: it can innovate in the very short term, but Intel has so much more money that they can always catch up to whatever new thing AMD comes up with. Finding niche areas to be the best has been a viable strategy for the past 15+ years, but that's never been lucrative enough to allow AMD to grow into a size that can compete on a level playing field directly with Intel. In the GPU marketplace, it's different. Intel almost exclusively makes low-performance embedded GPUs for use on integrated business laptop hardware; nVidia and AMD compete directly and vigorously, and neither company seems to have a large edge. In any given year, the best price/performance at any point along the curve may belong to one or the other company.
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Jan 22, 2014 18:33
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