O come on…watched that fellow tim sykes on wall street warriors…he was just cocky…no wonder why no one invested in his stupid hedge fund… shorting small cap and micro cap stocks…etc…without any analysis and just based on trends…
i enjoy null’s posts, he knows his sh1t. ps: i have a dark secret, i bought syke’s book…
needhelp Wrote: ------------------------------------------------------- > So null your net worth is around $8 mil and you > hang around on the analystforum? Talk about > dedication 
Not dedication, just lazy + bored right now Punt fund is for buying toys - cars, houses, stuff Real money is in long term funds - mainly index ETFs + sectoral bets + a few properties But after a while you ask yourself “how much do you really need?” so set up foundation. + do a bit of charity work - helping World Vision set up funding structures for micro credit - mainly into Asia (Cambodia, Vietnam, Philippines) + right now looking at setting up new charity to raise awareness & funds for “ACC” (adrenaocortical carcenoma) - basically cancer of the adrenal gland - very aggressive, very quick, very nasty but very rare so hard to get awareness - very close friend was hit by it this year and is now on last legs, poor bugger. The more I learn in CFA the more I realise what I didn’t know and the stuff I’ve done shouldn’t have made money. Warren Buffett said “ignorance more often begets confidence than does knowledge” (2004 BRKA annual report). So if I knew back then half the stuff I know now, I wouldn’t have done half they things I did years ago - so probably wouldn’t be where I am today. Sometimes too much knowledge makes you think too much and hesitate instead of trusting your gut feeling and diving in. Sometimes ignorance is bliss… I’ve been lucky, but I don’t pretend it’s any more than blind luck…
Null, I pray that I have your kind of “lucky ignorance”…someday…
Yes, it’s true that the more I know, the dumber I feel, and especially true with the CFA curriculum. However, as someone coming in from outside the industry (not IT, though), CFA has been good for helping me understand a lot of the language and issues in asset management. When you’re just starting out, trying to figure out dividend yield vs earnings yield vs yield to maturity is just so confusing… it’s nice not to have to take a university degree program to learn this stuff. One thing that has changed is that - although I think there is alpha out there for skilled people willing to put in (a ton of) work, it’s a lot of work for just a little gain. For long holding periods, indexing does seem to do surprisingly well, and lets you do other things with your life.
Beware of the man who works hard to learn something, learns it, and finds himself no wiser than before. He is full of murderous resentment of people who are ignorant without having come by their ignorance the hard way. (Kurt Vonnegut)
null&nuller Wrote: ------------------------------------------------------- > needhelp Wrote: > -------------------------------------------------- > ----- > > So null your net worth is around $8 mil and you > > hang around on the analystforum? Talk about > > dedication > > Not dedication, just lazy + bored right now > Punt fund is for buying toys - cars, houses, > stuff > Real money is in long term funds - mainly index > ETFs + sectoral bets + a few properties > > But after a while you ask yourself “how much do > you really need?” so set up foundation. > + do a bit of charity work - helping World Vision > set up funding structures for micro credit - > mainly into Asia (Cambodia, Vietnam, Philippines) > + right now looking at setting up new charity to > raise awareness & funds for “ACC” (adrenaocortical > carcenoma) - basically cancer of the adrenal gland > - very aggressive, very quick, very nasty but very > rare so hard to get awareness - very close friend > was hit by it this year and is now on last legs, > poor bugger. > > The more I learn in CFA the more I realise what I > didn’t know and the stuff I’ve done shouldn’t have > made money. Warren Buffett said “ignorance more > often begets confidence than does knowledge” (2004 > BRKA annual report). So if I knew back then half > the stuff I know now, I wouldn’t have done half > they things I did years ago - so probably wouldn’t > be where I am today. > Sometimes too much knowledge makes you think too > much and hesitate instead of trusting your gut > feeling and diving in. Sometimes ignorance is > bliss… I’ve been lucky, but I don’t pretend it’s > any more than blind luck… Pretty impressive stuff there. Right now i have around $10K in ‘play money’ in mutual funds and ETFs. I am very inclined to go ballistic and try all kinds of stuff hoping to make a quick buck. Maybe I am better off going to Vegas or playing the lottery.
I have my ‘play money’ in options. I know it is not investing, I am just gambling. But one day I am gonna long one of these deep out of the money, bear sterns like puts… Beats online casinos since it’s legal. And since I know I am just spending money, I do not have to worry about risk management, VAR, or explaining to anything to my boss. I could also make so much more money with insider info if I was not bound by CFA ethics and was not afraid of going to jail.
I know that since we are working on the CFA we are all sort of predisposed to securities, but i have done far better in real estate as an investment medium. Admittedly, I am not as diversified as theory would have us practice, but it has worked really well. Since i deal primarily in commercial, it doesn’t seem to have the wild swings like flipping houses or some other residential strategy. For example, we purchased a builging for around 125k, spent around 125k in rehab and now it is worth approx 400k. We invested about 25k a piece (2 people). So for 50k, we leveraged the money and made 150k in immediate equity. We also positive cash flow of like 900.00 per month (total) with 15 years of financing so equity builds relatively quick. I haven’t seen securities that return these kind of returns, plus this is a repeatable case, not just a random fluke deal. My personal strategies are real estate centric…
bchadwick Wrote: ------------------------------------------------------- > I have a pint fund, but it goes down every friday. Lol, awesome…
I’ve wondered… even with implied vs historic volatility spreads, out of the money options are probably underpriced, so you might just keep some in your drawer and see which ones explode. Calls theoretically have more upside, but bankruptcies and downside shocks are probably more frequent. The problem is that you lose money continuously until your Black Swan comes in. I’m not sure how to play that game sensibly, but I’ve often wondered.
TPain88 Wrote: ------------------------------------------------------- > bchadwick Wrote: > -------------------------------------------------- > ----- > > I have a pint fund, but it goes down every > friday. > > > Lol, awesome… i’m just waiting for somebody to say: “I have a PANT fund, and it goes down every friday” - c’mon people! re property: - have made 50-60% of my money in property - don’t forget that it’s very cyclical - I have seen many people get greedy in the boom markets (they think they’re adding value but it’s just the market that’s producing the gains), then they scale up and get caught with big debts + falling values in the bust - one of the great advantages of property is its illiquidity - damn hard/expensive to sell, so you just hold it - as long as the location/population/economic growth, etc is good you can make a fortune just holding forever, and using as collateral to buy into other things. - but other financial instruments (even long equity) has far more price volatility than property - so you can make or lose a lot of money much quicker - eg shares can (and do) halve and double in short periods of time - but property is obviously much slower. - in the markets, you have to always take some money off the table from wins - + I tend to put it into property when the cycle is right. re options: - buying calls or puts and waiting is a mug’s game - let the retail punters do it - you’ll run out of money “waiting for the black swan” - 70-80% of bought opts expire worthless (might be different in different markets of course) - you make money selling volatility, not buying it - writing naked opts = “picking up pennies in front of a steam-roller” - writing covered = giving away your upside on the long - can make money doing combos (primarily selling vol, but protecting etremes with bought OTM positions), but it’s tedious, boring work - it’s like playing blackjack (takes a long time to make money or lose money, but you just learn the rules, apply the rules, switch the brain off) - but most people go into it expecting it to be like roullette (big wins like a lottery) - it works, but very tedious - they key is good money management discipline - they key is to understand that in most markets (stocks, commodities, etc) periods of high underlying volatility tends to be followed by high implied volatility in the period immediatily following it. Thats when you sell the high implied volatility which is artificially higher than the underlying vol. - Eg. right now in lsted financials, there has been a period of very high volatility in the underlying stocks, so now in the relative calm the implied volatility in opts is very high (coz the market’s spooked). Take advantage of this mismatch and sell the vol. Scary as hell, but you can sell that fear and make money… It’s all “Fear & Greed” folks…
Null, thanks for the explanation. It makes things a lot clearer. I’m officially a fan now.
Null, thanks for the explanation. It makes things a lot clearer. I’m officially a fan now. BTW, I should have been clearer: I meant buying deep OTM options and waiting for black swans. Buying close to the money stuff is surely a bad thing unless you are hedging or have a very good model to speculate with. Maybe the rules for deep OTM are no different, but I think there may be a different dynamic with the tails.
"- 70-80% of bought opts expire worthless (might be different in different markets of course) " But as Taleb points out, even if 90% of your options plays lose money, it might only take one big win to recoup all the losses and still leave you with an enormous return.
null is ballin out of control. he makes it rain
null, what you are doing now that you are financially in a place you want to be is exactly why I’m on this journey to get my charter…I want to become successful so that I can get back home (africa) and really help grow that economy and reduce poverty/disease. Cheers man. - this has nothing to do with the thread, my bad folks
Null, very nice play with Fortescue, when you got onto it back in 03 was it just another spec miner or did you have see something more? I’m not familiar with the specifics of FMG (except of course that Twiggy would be laughing!)
null&nuller, Thanks for your interesting, insightful, and honest posts. Please post more!
Robb Wrote: ------------------------------------------------------- > Null, very nice play with Fortescue, when you got > onto it back in 03 was it just another spec miner > or did you have see something more? I’m not > familiar with the specifics of FMG (except of > course that Twiggy would be laughing!) Re Fortescue (FMG) - I followed Twiggy (Andrew Forrest) through Anaconda Nickel in the 1990s and sold out before the collapse (he was fired - project went over budget and never delivered on promises) - but that’s ok because the market knows that he just builds houses of cards based on PR stunts. So in early-mid 2003 he starting building a stake in a tiny thing called Allied Mining & processing (or something) - just a nothing explorer, so i figured he was going to back-door his next project into it. There was also a little medical device business thrown in which he used as a smoke-screen - to throw people of the scent. So I built a bit of a stake a couple of months later. No question the guy’s a scoundrel and he has a history of over-promising and under-delivering so you gotta know what you’re getting into. He’s now the richest man in Aust (about $10 bil I think - all based on his FMG shares). So far the plan has worked - shipped his first shipment of ore to China in May this year, so there really is a mine and it really does have iron ore in it. Won’t be as big or as profitable as he promises - (low grade, expensive to mine/process) - and he has big debts to roll - but so far it’s still mainly blue sky. Old story - “buy the rumor, sell the fact”. I got the blue sky ride so now I’m a seller. He’s a real character - FMG bought the old Poseidon nickel mine last year - the same one that the “Poseidon nickel boom” in 1969-71 is named after. IPO in 1969 at 70 cents, went to $220 by late 1970, then bankrupt 1973 - talk about tulips! Not many people appreciate the irony of him buying Poseidan - Anaconda and Fortescue are in the same vein - real roller-coaster rides - fasten your seat-belts! (Anaconda is now called Minara Resources and still hasn’t delivered on Twiggys promises 10+ years later.) Most of my other mining stocks have done 300-400% over the same period - including the mining services (eg. Worley, Monodelphus, Campbell). Even the big guys - BHP, RIO, etc have tripled. Another “10-banger” (stock that goes up 10 times in value, or 1,000%) has been Felix Resources (FLX) - went from 80 cents to $20 in same period - another great story (for another day!) But the cycle’s over for this round - I’ve taken some money off the table but keeping some in. But things like BHP/RIO are still great buys - selling at something like 5 times EBIT, PER of about 10, full order books, raking in buckets of cash, v.low debt, China/India still growing at 7 - 8% pa, ROE of 40+% for several years, retaining 75% of earnings, etc. Not exciting but good long term stocks. (sorry for the all detail…!)