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hyten1

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Posts posted by hyten1

    I Worry About "The Shot Heard Around The World"

    in General Discussion

    Posted

    my sentiments exactly

     

    hy

     

    I feel nervous as well, but I am not sure what to sell since my holdings are still all undervalued. It seems to be a perennial problem to a value investor. In 1999, I could not find any deal or making it easy to be mostly in cash but now, there are still cheap stocks. You can trim a bit, but it does not seem enough to move the needle in terms of cash raising, especially when your portfolio keeps moving up a little bit each day. Take-overs are a blessing at the moment since they give you a nice exit point.

     

    Buying index puts is a losing strategy based on my own experience. I did buy some not that long ago and they are now way underwater or the index would need to fall by 8% just to reach strike. I guess it was a well calculated move back then, but now it looks foolish. Do I want to pay another premium at a strike closer to current index prices to be insured once again?

     

    Shorting the index is also quite dangerous and you will have to pay a rental fee and the dividend. Lower cost than paying puts premiums, but you have to live with the liability.

     

    The other issues that arise are psychological and imperfect hedging. In some ways, you root for the market to go down which feels odd since you still hold some stocks in your portfolio that you believe are undervalued and a rising market should help them somewhat to reach fair value. You also have no reference point whatsoever as to when or at what price to take the hedges off. Round trips are a strong possibility and missing out on the true bear if it comes also. Then the lack of correlation between your stocks and the hedges is often miscalculated when you get into these hedges. A 1% daily down move in the SPY while your stocks are going down 2 or 3% will drive you nuts and will show how little hedged you are with index puts. You can try the Russell ones, but it is a similar story. The volatility is higher so they charge you a higher premium.

     

    In the mini correction in mid-April, I found how useful cash is. It always seems to be the beaten down stocks that get more pounded during a correction. Buying them with cold hard cash during these instances of panic driven by margin calls or just market devaluation provides probably the best hedge or defense. So now I am back to the beginning of my post or how to raise it?  :-\

     

    Cardboard

    I Worry About "The Shot Heard Around The World"

    in General Discussion

    Posted

    in regards to real estate

     

    we just recently sold a place in nyc

     

    i was shock when we put it on the market, we had 6 offers at asking or over within a few days, the deal is done before the photographer came to take the picture for the listing. we bought this place at the end 2009 when very few people were buying, now we sold it for over 30% higher

     

    crazy :)

     

    but then again, i think we bought it at a very good price, with the limited inventory the prices has gone up, but to be honest the price we sold it at (even thought is 30% higher than when we bought it) at the currently condition, its a reasonable price.

     

    Investing for capital appreciation vs income

    in General Discussion

    Posted

    folks, thanks for everyone's input, all very interesting and good things to think about

     

    i guess i was wondering for the folks who have done it, meaning have achieve "passive income that can support themselves and then some"

     

    would love you here your experiences, what are your income distribution look like (10% dividend, 20% rental income etc.)?

     

    i know eric retire and live off his investments, was wondering how do you eric pay the bills? is it mostly just selling or take a X amount out from your equity portfolio per year to cover your expenses? and/or some other asset that generate income?

     

    i am still trying to achieve "passive income that can support themselves and then some"

     

     

     

     

    Investing for capital appreciation vs income

    in General Discussion

    Posted

    I have been thinking about this on and off for a while now. I know when most people think about investing and making money from investing, they think about the capital appreciation part.

     

    However, one thing that i have been trying to do is generate enough passive income where the passive income can both satisfy my living needs as well as have enough passive income to obviously put back to be invested again.

     

    my point is not to say which is better or worst and I understand if you have enough capital (even if you don't focus on investing for income)  the power of large number will take care of the income part automatically.

     

    I was wondering anyone have any insight/trick/color on the best ways/places to invest for income. Any one have experience in this regard? Just curious.

     

    EDIT: not sure what i am trying to get from everyone, i understand all the typical investment you can get income (bonds, equity with dividend, real estate as rentals etc etc.)

     

     

     

    Capitalism is killing our morals, our future (link included)

    in General Discussion

    Posted

    stahleyp

     

    you should read "The Better Angels of Our Nature: Why Violence Has Declined"

     

    you'll be surprise by it

     

    as a citizen of the current world due to our hyper media you would think we live in the most dangerous time in history, the truth cannot be more different. i can't do justice to the topic, "The Better Angels of Our Nature: Why Violence Has Declined" can, that is why its 800 pages :)

     

    after reading it you'll find something similar to value investing, that sometimes perception is very far from the truth, similar to a overhype stock or stock destin to die while the opposite eventually happens.

     

     

    hy

    Frustrating market

    in General Discussion

    Posted

    i know there are more important things to complain and worry about

     

    but this market has been very frustrating... it keeps going up

     

    its hard to see after you sold a position, thinking that you'll be able to buy it back lower, and see the stock continue to go up :)

     

    i have been searching/looking for new ideas, so far have not found anything interesting, many stock that i am watching and would buy it if the price drop

     

    is anyone feeling the same?

     

    i can see how i would under perform the market when the market shots up, with expanding market multiple

     

     

    Absolute Investment Targets

    in General Discussion

    Posted

    guys i know this sounds good in theory ... but in practice? (I understand why you would do it)

     

    i mean take 2008 and 2009 for example tons of stock were on sale, i put all my money to work during that time (0% cash by the time it was mid 2009). basically i was looking for whatever was cheap within my circle of competence. and there were quite a few (don't want to sound like it was easy for me at the time, eventhough i was putting money to work, it was not easy, your brain says "this is crazy cheap" but your heart goes crazy seeing the stock drop like it did during 2008, 2009)

     

    i just find it difficult let say you have put in 90% of your money and you come up with a good investment that will ONLY make 50% annualized, do you pass it up :)

     

    because you are waiting for the 70% :)

     

     

    Obama to cap tax-preferred retirement accts to $3MM

    in General Discussion

    Posted

    well said!

     

    this has always been one of my frustration, people feel entitled

     

    its disgusting to see people complain in this country, because they don't have A or B etc. (people want to talk about poverty and hardship, they should move out of the US)

     

    my parents (and many immigrants) came to this country without much, they follow the rules and work hard and sacrifice.

     

    while i see american on TV saying they don't have a job or money (while you see everyone in the family has cell phones, flat screens, xbox, cars, living in a decent looking house etc.). there are jobs (just not the one they want). they don't need many of the stuff that they have (but they want it and feel entitled)

     

    stop complaining and start doing whatever it takes.

     

    I don't think people understand "whatever it takes" mean. (within the law)

     

     

    Even if it does not get into law or even if it is just to once again demonize the rich, the fact that Obama and company are conceiving these plans is disgusting. All these programs have been put together to encourage people to save and to retire without being a dependent of the state. It is really an attack on savers and people trying their best to create a nest egg for their retirement. These are not the tax evaders and abusers of tax loop holes. These are people who earned a salary doing honest work, put money aside in a program that was law and because they were smart with their money or earned too high of a rate of return on capital are now being targeted.

     

    $3 million is not that much if that is all you have, have dependants and you retire at 55 years of age. Actually, many financial advisors will recommend that you aim for such target and I am not talking in 40 years from now.

     

    These proposals are destroying the fabric of capitalism. Once trust is gone and the hope to one day be rich, then capitalism is dead. While Ostog is right that these programs are quite advantageous over time, I think that they have been put in place exactly for that purpose. Also, the fact that not so many have achieved such success is a justification to not mess with these programs and give one more excuse for the lazy and not willing to save in them because they don't trust them.

     

    Regarding austerity, this is not austerity. It is asset confiscation that is coming like we are seeing in Cyprus. The problem with society nowadays is that everyone wants to have everything that others have without saving or sacrificing to get it. Is everyone entitled to a Playstation or Xbox? Is everyone entitled to a large flat screen? A home? A car? Roller blades? Pool? NO! We need to get back to you eat what you kill. That is what my parents did and thought me to do. You work hard, put money aside and when you have cash then you can buy what you want. While I am all for supporting people in need with the essential, I have a real problem with this asset redistribution mentality for people who have already everything in life.

     

    Marc Faber had the best quote this week to summarize the problem: "You have more people that vote for a living than work for a living. I think you have to be prepared to lose 20 to 30 percent. I think you're lucky if you don't lose your life."

     

    http://www.cnbc.com/id/100609635

     

    Cardboard

    title insurance loss provision

    in General Discussion

    Posted

    A_Hamilton

     

    you are correct

     

    any idea why its so high?

     

    before i started looking I would think 1 out of 100 or so title insurance have losses. what is it about this industry that 1 out of every 10 real estate transation result in title having some sort of issue.

     

    as you can tell i am new to this :)

     

     

    EDIT: forgive me, after i posted this i realize. so the # of title insurance that goes bad is considerably less that 10%, since the notional exposure of the loss is significantly higher than the premium received.

     

     

    hy

    title insurance loss provision

    in General Discussion

    Posted

    folks,

     

    i have been researching title insurance companies (just learning and reading). one thing that puzzle me is the industry title loss provision on the yearly bases is around 8-10%

     

    why is it so high?

     

    it just seem to me so high that 1 out of 10 real estate transaction there is an title issue? why is that? is there that many fraud in this space? I would think before an real estate transaction occurs the buyer/seller/lawyer/bank etc would have done the research and would know if the title is good?

     

    anyone have any background on the industry etc. on why 1 out of ever 10 RE transaction we have a title problem?

     

    thank you

     

    hy

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