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2020 Investment Thread

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afm199 said:
bingo. I've bought on margin, but it's never been more than 5-10% of my total marginable securities and only for a short term.
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So hypothetically, what if I bought, say, 100 shares of something on margin, then sold covered calls on it to match or beat the interest on the margin? Worst case, I get the premiums; otherwise, the stock rises enough for someone to buy the shares off me and I get the premiums + difference in price = margin paid back + profit? Or am I misunderstanding something there.
 
NorCalAthlete said:
So hypothetically, what if I bought, say, 100 shares of something on margin, then sold covered calls on it to match or beat the interest on the margin? Worst case, I get the premiums; otherwise, the stock rises enough for someone to buy the shares off me and I get the premiums + difference in price = margin paid back + profit? Or am I misunderstanding something there.
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Yes. You are. If you bought 100 shares of XYZ at $100, sold a $100 covered call ( one call = 100 shares), you get the premium. If the stock drops to $80, you now own the premium and and stock worth 80% of what you paid for it.

If there was an iron tight option strategy, Goldman Sachs and the other bloodsuckers would own all the money.

Almost forgot. If the stock dropped to $50, and your account didn't have enough cash to cover the margin, or marginable shares, then the broker would sell your underlying 100 shares and enough of your other marginable securities to make up the difference.
 
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afm199 said:
Yes. You are. If you bought 100 shares of XYZ at $100, sold a $100 covered call ( one call = 100 shares), you get the premium. If the stock drops to $80, you now own the premium and and stock worth 80% of what you paid for it.

If there was an iron tight option strategy, Goldman Sachs and the other bloodsuckers would own all the money.

Almost forgot. If the stock dropped to $50, and your account didn't have enough cash to cover the margin, or marginable shares, then the broker would sell your underlying 100 shares and enough of your other marginable securities to make up the difference.
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Right I'm aware of the downside in terms of the stock dropping - I wouldn't be using 100% margin or worse 4x margin like some of the yolo guys I've seen. Just, as you alluded to, a modest 10% or so (actually not even, unless I was buying 100 shares of Amazon or some shit). I would keep cash on hand to cover if need be. But would the upside be as I described?
 
For some strange reason, I can’t see the last page of this thread anymore. Does anyone else have this problem?
 
NorCalAthlete said:
Right I'm aware of the downside in terms of the stock dropping - I wouldn't be using 100% margin or worse 4x margin like some of the yolo guys I've seen. Just, as you alluded to, a modest 10% or so (actually not even, unless I was buying 100 shares of Amazon or some shit). I would keep cash on hand to cover if need be. But would the upside be as I described?
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Depends on the premium. On Tesla the premiums are insanely high. On GE they are tiny.

I sell covered calls sometimes to make money. Not very often. I usually make money, though I have locked myself out of some amazing gains doing it. Selling covered calls is one of the safest option strategies.
 
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Might want to look into doing spreads. much lower upside, but I think a little bit 'easier' to bag some level of money
 
New year, new ETFs to look at:

https://www.reddit.com/r/investing/comments/kko8e7/cool_etfs/

Cool ETFs

I'm bored. Decided to share some cool ETFs you may have not heard of. I'd love to hear of some ETFs you guys have or know of too!

IDNA/HELX - both genomic plays like ARKG

LRNZ- AI and deep learning.

BFTR/LOUP- black rock future innovators and frontier tech.

IQM - intelligent machines etf. Heavy position in Tesla however.

PTF/PTH - technology momentum and healthcare momentum ETFs.

MFMS - actively managed small cap etf.

BTEC- healthcare innovation. I really like this one.

QQQJ/QQQN - both similar ETFs that track the next stocks to be included in nasdaq.

QGRO - etfs that holds stocks with high grows/strong fundamentals.

PAWZ - just like it sounds baby. Tracks stocks related to pets.

ENTR/BUYZ -entrepreneur and disruptive commerce ETFs

Any other cool ETFs I should check out?
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rumors are floating around that elon musk is pulling a michael saylor and using tesla funds to buy dogecoin.
 
NorCalAthlete said:
New year, new ETFs to look at:

https://www.reddit.com/r/investing/comments/kko8e7/cool_etfs/
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Interesting, thanks. I looked at PAWZ and some of its holdings a while back. Seems most of the pet care stocks have no earnings or stupidly high PE ratios.

Sort of related, anyone using Ally Invest? I have some cash in Ally Bank and decided to try an investment account there for the convenience. Its research tools look pretty good and include the reports from Morningstar and CFRA.
 
Some months ago I moved a large chunk of my 401k to cash, using a Vanguard MMF, which now pays next to nothing. At the time it was paying a tick over 2%.

I am going to do the same with my wife's account, which is at Fidelity.

I am ready to further reduce our exposure in this frothy market, as she is retired and I want to conserve most of her capital, while retaining some exposure in the 401k.

This 401k has had some very solid gains since she stopped contributing in early 2014, after leaving Oracle.

Which Fidelity MMF or other safe vehicle there would be appropriate to park cash for a while?
 
I've about resigned myself that there are no safe investments, not even cash with the dollar declining in value and the national debt heading for the moon. I'm thinking carefully chosen equity funds may be the best bet for the long term.
 
900ss said:
Some months ago I moved a large chunk of my 401k to cash, using a Vanguard MMF, which now pays next to nothing. At the time it was paying a tick over 2%.

I am going to do the same with my wife's account, which is at Fidelity.

I am ready to further reduce our exposure in this frothy market, as she is retired and I want to conserve most of her capital, while retaining some exposure in the 401k.

This 401k has had some very solid gains since she stopped contributing in early 2014, after leaving Oracle.

Which Fidelity MMF or other safe vehicle there would be appropriate to park cash for a while?
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That's a hard one. In this market, the huge influx of money has pushed interest rates to close to zero. Some money market funds are cutting their carrying costs to nothing to keep being able to pay a tiny percentage of interest. You won't get guaranteed interest much over a half a percentage point. Money market funds can also go below the $1/share price if the trend continues. I've bought some TIPS, SCHP and SPIP which both pay around 1.5%. I am happy with them. I took money out of Schwab money market SWVXX to put there.

I don't guarantee that either is a safe haven, just safer. That's about all we get.

I've had great luck with both muni and investment grade corp bond funds, but if you want to invest in those, you need to monitor them daily and follow the market. They have tended to follow the current market and the FED is spending huge sums of money to buy them.

So good luck. Who knows? Bitcoin? Gold? Munis? Corp bonds? It's a brand new world, thanks to the Fed, who want to encourage us to invest.
 
rodr said:
I've about resigned myself that there are no safe investments, not even cash with the dollar declining in value and the national debt heading for the moon. I'm thinking carefully chosen equity funds may be the best bet for the long term.
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Yep. Though I am not sure I agree with the last part. Actually, I am holding some stuff like GAB and ADX that are both CEF's and nicely discounted. It's a scary world. This current bull could go on for weeks, days, months or hours.
 
afm199 said:
Yep. Though I am not sure I agree with the last part. Actually, I am holding some stuff like GAB and ADX that are both CEF's and nicely discounted. It's a scary world. This current bull could go on for weeks, days, months or hours.
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Reassessing this... think what I'll do is put my money market cash into corporate bond ETFs. Vanguard has VCSH, VCIT and VCLT for short, intermediate and long term respectively. VCSH currently pays 2.42% and had total returns ranging from 0.92% to 7.02% over the past 10 years.

Beats the hell out of Ally's 0.5%.
 
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