investor-man
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Posts posted by investor-man
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In my group of family, friends & associates I don't know a SINGLE person who is actively supporting Hillary. Many are supporting Trump, some Bernie Sanders. A few said they MIGHT vote for Hillary, but really don't like her & the associated scandals & sleaze....
I think Bernie is a fool when it comes to economics, but at least he is honest....
I think a lot of things are going to change when it is Trump vs. Hillary in the debates. He is the only candidate that will go after her for the scandals. If Bernie was more effective in attacking her, he very well might have won the nomination.
There is also a chance (small) that Hillary is indicted over her server. There is also a small chance that an indictment comes over the Clinton foundation. I've been hearing rumors about that for a while now...
We'll see. This is going to be the most interesting race in many, many years!
Hah, you could replace Clinton with Trump and vice versa and your have my situation, but I live in the NYC bubble so I don't know what the rest of the country is thinking. But seriously, what are you fucking thinking? The man referenced the size of his penis in a speech. He hinted that a moderator was on her period when she challenged him in a debate. He basically called Ted cruz's wife ugly in public. That's your leader? Jesus...
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With every episode of QE the Fed becomes less effective
George Soros recently said (this year) that QE worked.
I agree with him, but I don't think it can be done forever, and we may need stimulus again soon if people like Ray Dalio are right. Practically speaking, interest rates can only go so low, so I think fiscal policy will be needed. If it's not needed, great! But if it is, I want someone in office who is open to it.
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I really don't think it matters much. The Fed moves the markets far more than any president can.
With every episode of QE the Fed becomes less effective, which is why I somewhat support Clinton for her infrastructure spending plan. I've always thought it was appalling that we couldn't get it together and support the financial crisis with a little fiscal policy. It would make me comfortable to elect someone who isn't afraid to talk about it. That said, if Bloomberg ran, I'd vote for him in a heartbeat.
Do you think Clinton will; actually be able to get this through with the high debt and a probable Republican Congress focused on reduced spending? That's one of the reasons I'm thinking a Rubio might be best for the market as a joint Republican President and Congress might actually be able to get things like this done, which just seem like logical things to do.
I own a couple infrastructure related companies and spending like this would certainly help them.
It will be tough for Clinton to get anything through a Republican Congress, but I'm glad she's at least talking about it. I have largely ignored the Republicans up until now because it's become a bit of a circus, so I know almost nothing about Rubio. I will pay closer attention to him if he continues to become a contender.
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I really don't think it matters much. The Fed moves the markets far more than any president can.
With every episode of QE the Fed becomes less effective, which is why I somewhat support Clinton for her infrastructure spending plan. I've always thought it was appalling that we couldn't get it together and support the financial crisis with a little fiscal policy. It would make me comfortable to elect someone who isn't afraid to talk about it. That said, if Bloomberg ran, I'd vote for him in a heartbeat.
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"Value" functions in a world of classic macroeconomics: the distribution of limited resources.
What happens when technology and society advances to the point where "limited" resourced become much less limited?
huh, can you elaborate?
OK so this is a totally half-baked futuristic scenario, but what happens to the economy when the marginal cost of production approaches zero?
Let's take Nike, in say 100 years (or however long). The world has fully transitioned to solar power and the price of oil has plummeted to practically nothing. The COGS of a Nike shoe is freakin' miniscule. They've got robots handling 99% of production at lightning fast speeds at mini-factories to minimize shipping costs. If the total cost of Nike shoe is $10 today, let's say its $0.25 in this futuristic world.
And it's not just Nike with minuscule costs of production, it's across the whole developed world. Self-driving cars has ensured auto insurance doesn't exist. Insurance brokers? There's an app for that. Manufacturing is about as hands-off as it gets. Planes fly themselves. Improved satellites mean the cost for a cell phone carrier is practically nothing for incredible bandwidth. The advancement of technology has made the cost of resources and production super low.
So a lot of people are not working in these areas, not making a salary, but on whole their quality of life is greater than it is today. But perhaps their wages are much lower. Does this mean the market price of a Nike shoe is going to drop from $150 to $20? Monetarily this reduces the discounted present value of Nike. But economically they are still just as valuable.
On a whole what does that world look like on a monetary vs. economic level (price vs. value)?
/super rambly post
The Grand Nagus says, "there will always be a market for Romulan Ale. Invest now, HUMAN!"
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Well, I can't find positives in either report. Maybe that oil was just too beaten up and now it is still going up?
Troublesome to see inventories still climbing including products. Maybe that the rate is less than expected considering the global glut and time of year for gasoline and distillates? Actually distillates were down 1 million barrels or likely in-line with more normal winter conditions picking up.
What annoys me more is this tiny decline of 3,000 barrels/day for Lower 48 States production. Maybe that Cramer is right about Shell but, when I compare to the entire Alaskan production of 532,000 barrels/day that seems way too big again for one operation in the Gulf.
I don't know anymore.
Cardboard
You know much more about this stuff than I do, but can we not expect inventories to keep climbing? I read somewhere that traditionally in February refineries shutdown for repairs, which causes inventories to rise. Seems like inventories will keep rising until at least March.
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Bought some oil for the first time today.
Level of analysis: The price has declined because of new capacity and lower demand. I think the demand decline can't be big seen over a few years - most oil is used in transportation which won't decline given no wars. The new capacity is Iran and Saudi pumping more, as well as frackers. The frackers seem to need USD 50-60. Saudi will pump less as soon as possible. I think we'll see a higher level, say 40+, within 18 months.
How did you buy the oil? USO?
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I would be surprised by anything much below $20 or anything much above $120, based on the historical range.
Haha, nice range here :)
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Time to take a chill pill guys 8)
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Well were now down to the approximate inflation adjusted price for the 1990s, exepting the low price spike in the few months of late 98/early 99, whatever that means.
Interesting chart. Average price since 1946 is $41.70, since 1980 is $53.24, and since 2000 is $64.52. If you are expecting reversion to the mean, regardless of when your starting point is the price should go up from here...eventually. If you were waiting for a reversion to the mean in 1986 you would have waited a long time.
Seems like a decent margin of safety. @rkbabang did you buy or are you thinking of buying any of those ETFs you pointed me to above?
Howard Marks: "You have no idea about future price of oil"
meh, you've got no idea what the future price of anything is. At $20 not even Saudi Arabia is getting good economics from oil. I don't see it going much below that for an extended period of time.
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Well were now down to the approximate inflation adjusted price for the 1990s, exepting the low price spike in the few months of late 98/early 99, whatever that means.
Interesting chart. Average price since 1946 is $41.70, since 1980 is $53.24, and since 2000 is $64.52. If you are expecting reversion to the mean, regardless of when your starting point is the price should go up from here...eventually. If you were waiting for a reversion to the mean in 1986 you would have waited a long time.
Seems like a decent margin of safety. @rkbabang did you buy or are you thinking of buying any of those ETFs you pointed me to above?
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If oil finds itself in the mid-20s, I'd strongly consider buying straight up oil. Anybody have suggestions on how best to do this? ETF?
50 gallon drums and some self storage space?
If that proves impractical I found this: http://etfdb.com/type/commodity/energy/crude-oil/
USO looks interesting. Morningstar has their expense ratio listed higher than what's reported on that website.
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If oil finds itself in the mid-20s, I'd strongly consider buying straight up oil. Anybody have suggestions on how best to do this? ETF?
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Ok, I'm not quite done :)
Another reason why XIRR is important to keep track of: when I login to Fidelity it tells me that my 1 year performance number is 34%. While I'd love to brag to you all that my return for the year is 34%, I know it's completely wrong. My XIRR was slightly negative, and I was only able to increase the balance by 15% through deposits. I have no idea what that 34% number is measuring, and I'll never trust it. It's better to keep track of your performance yourself. It's pretty easy to do, even if you have multiple accounts.
Ok, now I'm done.
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Portfolio roughly flat in USD at year end.
Measured in home currency, IRR of approximately 15% for the period.
As regards IRR, Howard Marks wrote a good memo on the subject in 2006: https://www.oaktreecapital.com/docs/default-source/memos/2006-07-12-you-cant-eat-irr.pdf?sfvrsn=2
That's a great memo. And I think IRR is the correct metric by which to judge the performance of someone like an individual investor, who is completely in control of his/her own capital. IRR, or something that's abstractly similar (ROIC, ROE, etc.), is what we all use to judge all of these companies we're investing in. Why wouldn't we use it on ourselves? The time weighted metric just seems like a way to avoid the truth.
Most individual investors are absolutely not fully control of their own capital. You can't change when you receive your salary, or when you get an inheritance or a gift etc. If you got a big gift in 2009 you just got lucky, while if you got it in 2007 you got unlucky. If you don't try to time the market does it make sense to try to measure that?
Agree with this, that is unless people are literally hoarding money, storing it away without ever intending to use it that timing is really out of our control.
I have no idea how I did in 2015, calculating it will be a mess because money was moving in and out throughout the year. We purchased a house halfway through the year and I sold some stocks to facilitate the purchase. Would I have done better if I hadn't sold them? Maybe, but then again I wouldn't be living where I want to. In my view the purpose of money is to work for you, and in this case investing enabled us to buy a place we wanted.
I'd like to think I can control the timing of my account, but I can't. When we found a house I couldn't wait until the year end to make performance nice and tidy.
The scenario you describe above is precisely why XIRR is the good metric to use when evaluating your returns: you'd like the return that accounts for the large cashflow out of your account(s).
I think people are making this calculation more difficult than it needs to be. You basically need a spreadsheet with two columns: dates and cashflows. For example, I have 6 accounts between my wife and I, but I don't keep track of what's happening in each separately. I just keep track of when deposits and withdrawals are made. Which account the transaction occurred in is unimportant. I had roughly 30 such transactions during 2015, and keeping track of that is not laborious in any way. Are people making 100s/1000s of transactions in and out of their trading accounts (keep in mind if you make 100s/1000s of transactions WITHIN your account, XIRR accounts for this and you don't need to keep track of it)? I could see how that is laborious, but I can't imagine a reason why someone would do this.
And also...
In my description of why XIRR is a good metric for individual investors, I did say they have "complete control". Ok you got me, they don't have "complete control", but nobody using this metric in a real-life scenario has "complete control" over any of the cash-flows they are experiencing, and it's never assumed to be the case. That said, an individual has pretty reliable control over their investments: they are typically receiving a steady cashflow of income that they can choose to invest at their discretion. And I don't understand the comment about getting a gift in 2007 vs 2009 and the "luck" or timing involved. Yeah it would have been better to receive it in 2009 instead of 2007, but that is irrelevant. Don't you simply want to measure performance? Maybe you're making the argument that a good investment made in December will push my XIRR for the year up higher than a good investment made in January even if I end the year at the same dollar amount? This is mathematically correct. That said, you should keep track of your XIRR for your entire investment lifetime, so you get an accurate number reflecting your overall performance.
Ok, I'm done :)
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Portfolio roughly flat in USD at year end.
Measured in home currency, IRR of approximately 15% for the period.
As regards IRR, Howard Marks wrote a good memo on the subject in 2006: https://www.oaktreecapital.com/docs/default-source/memos/2006-07-12-you-cant-eat-irr.pdf?sfvrsn=2
That's a great memo. And I think IRR is the correct metric by which to judge the performance of someone like an individual investor, who is completely in control of his/her own capital. IRR, or something that's abstractly similar (ROIC, ROE, etc.), is what we all use to judge all of these companies we're investing in. Why wouldn't we use it on ourselves? The time weighted metric just seems like a way to avoid the truth.
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My goal for 2016 is world peace.
Axing the Balmer pic is a great start!
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This might be a stupid question but how do you figure out your return if you add funds everything month? I suppose it makes sense to just look at the total commited funds at year end which sorta compares to being in cash thoughout the year, ie it lowers the returns on both the upside and down side. I think I did 15-20 percent but will have to check the numbers.
Take a look at the XIRR function in either Google Sheets or Excel
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Using Google sheets is there a way to set the print range and have sheets fit the print area? Also, is there a way to print in color. TIA.
Packer
Hi Packer, you I don't quite understand your first question. Can you clarify? For your second question, you can click format -> conditional formatting, and setup some rules for conditional formatting. Here's a sheet where I've fetched a price for AAPL and set the background color to green if the price is greater than $100, and fetched the price for MSFT and set the text color to red if it's less than $110
https://docs.google.com/spreadsheets/d/1UZ8ln7lwHkI9YnCuMyV2F72pf6fwD8q_5QbdYliGMT0/edit?usp=sharing
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I think we should normalize the response in a given currency, maybe USD as 0% in USD is equal to 18% in CAD.
Packer
It's tough to expect people to do that but would be nice. I track in USD since I live here.
I've been following this board for three years and this is the latest I've seen this poll come up. Not a good year for investing. I ended up exactly matching the S&P which I guess is ok but given I was up significantly in the summer, it's disappointing.
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"Why would you say PDH is your best 2016 idea? its a large position in my portfolio but overvalued at the current price and we need to wait for fundamentals to catch-up to the stock price - it could take years."
We're long time PD shareholders & are accumulating, not selling. If the dividend continues we get a very good cash yield; should it get cut we will see a buying opportunity. We are also not measuring over a 1 year timeframe, & are quite OK with a one-year 25% loss - if it results in a doubling of our share count.
SD
SD, PDH : Premier Diversified Holdings. ; PD: Precision Drilling
Me: Nothing new: Good oil related cos. and PWE
So you are pro SD and PWE? I own both but I have to tell you that in my opinion Saudi Arabia needs to raise prices or SD and PWE are in for a world of hurt. Having said that I think I am going to buy some more this year in my Roth IRA. Probably in the next month or two.
I guess I have to ask, why the confidence? Should I just read the dedicated threads on the two from start to end?
I think he meant "SharperDingaan" and not "Sandridge Energy"
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4. Learn to code (VB, C#, C++ and Python for now), a means of career development, I plan to create small projects for myself and basically learn by doing. (For those who have taught themselves.. Any advice/resources are welcome).
Do you have any prior coding experience? If not, Python is a great place to start. C# and Java are also good choices. Stay away from C++. It's a hard language to learn, especially as your first one.
Been a software engineer for 15 years... I don't think any of the above is bad advice, but if you want to do any web-related things, I think the best place to start is by learning JavaScript. It's an easy language to learn, and it is a requirement that you use JavaScript to do anything interesting in a web browser. With Node.js you can do server-side things, and now with React-native, you can build native mobile apps on iOS and Android. If you are strictly looking to do data processing, statistics, and machine learning, then Python is probably the right language for you. Also, in my EXTREMELY biased opinion - run as fast as you can away from Windows. All of the important open source software out there is done on Linux/OSX, and all of the examples you find will assume you are running Linux/OSX.
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Happy holidays and a special thanks to Parsad for creating a great community!
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Heh, who should be believe? This guy or Goldman Sachs or this guy: http://www.bloomberg.com/news/videos/2015-10-21/are-oil-prices-on-the-verge-of-another-major-selloff-
C'est la vie
Come on, nobody knows what the price of oil will be next year, everyone is just making a guess.
yeah, that's what I implied 8)
Raritan Capital Q2 Letter
in General Discussion
Posted
Cool! Looking forward to reading it