Jurgis
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Posts posted by Jurgis
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Yea........I think its for sure pushing new grounds to now hold brokerage firms responsible for people of legal age, speculating on things they may or may not be knowledgable about. The era of the "no fault" individual because of the "greedy" corporation is underway...but if we are already at the point where gamblers arent responsible for their actions...then we are indeed in deep doo doo.
This is irrespective of the tragedy involving the 20 year old.
This isn't all that personal responsibility bah blah, blah. Brokerages have a KYC duty. There is no new ground. Brokerages are not allowed to allow people to speculate on things they may not be knowledgeable about. Again, this has been around for a long time. To put it another way, I have client money. If I made some investments that the client can't understand the risk because of their knowledge and I loose money I have to personally eat the loss for the client. This is even if I explain the trade and the risks ahead of time. That's just what the rules are. A 20 year old kid in most cases is not knowledgeable enough to understand the risk in option strategies.
The new era seems to be hey, ignore the rules if you think you can make some money, don't worry about it.
This is particular in this case because companies like Robinhood seem not only to ignore whether a client is knowledgeable or not to take a certain kind of risk, but they seem to be actively encouraging risk taking in that group. That's why my view that this rises to criminal negligence. A (highly?) imperfect analogy would be tobacco companies marketing cigarettes to minors.
I made a flippant joking post earlier about "moving fast and breaking things", but this is a real tragedy and I am starting to think that whenever Silicon Valley wants to disrupt something really important like our health or our wealth we should be VERY worried about our safety or the safety of those around us.
I have been making fun of Robinhood for months and saying that this will all end in tears, but I have to say that I am surprised by the speed and severity with which we have our first nationally publicized tragedy. The best imaginable outcome is if this somehow helps to prevent even more trouble down the line, but I doubt those who should be most concerned will even notice this new story, hopefully others will be able to make a difference.
I think this goes beyond simple KYC, which I think is shocking in this case. I think you could also argue that there is a basic consumer product safety argument that a lawyer might be able to make.
Seeing how egregious this example is makes me think that there is more to be concerned with regarding Robinhood than even its most vehement detractors might have imagined. In a worst case scenario, we may be making comparisons with the irresponsible behavior at Theranos once more becomes known about what has actually been going on with Robinhood that we are unaware of.
Why is it beyond KYC? And why you think KYC would have prevented this?
Yes, brokerages ask you to tell them how much experience you have trading options when opening account/allowing to trade options. You can simply lie. I know people who have lied... So, presumably what all brokerages do is not enough to prevent what happened. What would you expect Robinhood to do that goes beyond what other brokerages do? And why would you single out Robinhood for this?
I'm not RFT, but our views are aligned on this. First of all it's KYC (know your client) not AYC (ask your client). You ass isn't covered just because you asked and the client lied. Robinhood has a social media component to it from which it's clear that the clients lied on their KYC. It's on THEIR platform.
Furthermore, at least in this particular case the story states that the margin option was turned off. How the hell do you short options without margin?
Yeah, there might be some issues with Robinhood.
But also see my edit for my previous post.
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Y'all need to step it up!
;D
There should be executive order for all rich people to book a dinner, stay, golf package at Mar-a-Lago or do time. We should not have unpatriotic behavior of hiding in their mansions. Jawohl!
I don’t know the current status but there was some chatter recently about making leisure travel expenses tax deductible for the year or something like that. Not kidding. :o
For people who are not scared to travel/etc., there might be some good travel opportunities around. ./shrug
Airfares and air travel though might not be very attractive, since airlines cut a lot of flights.
Chicago-Tampa flights are fully booked - albeit with social distancing seating.
Yeah, I was just listening someone in our social group saying they flew to/from Florida for $700 on JetBlue - when normally tickets are $130. (Not sure exactly where/to and timing of the flight). ::) Maybe we should invest into airlines. ::)
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Yea........I think its for sure pushing new grounds to now hold brokerage firms responsible for people of legal age, speculating on things they may or may not be knowledgable about. The era of the "no fault" individual because of the "greedy" corporation is underway...but if we are already at the point where gamblers arent responsible for their actions...then we are indeed in deep doo doo.
This is irrespective of the tragedy involving the 20 year old.
This isn't all that personal responsibility bah blah, blah. Brokerages have a KYC duty. There is no new ground. Brokerages are not allowed to allow people to speculate on things they may not be knowledgeable about. Again, this has been around for a long time. To put it another way, I have client money. If I made some investments that the client can't understand the risk because of their knowledge and I loose money I have to personally eat the loss for the client. This is even if I explain the trade and the risks ahead of time. That's just what the rules are. A 20 year old kid in most cases is not knowledgeable enough to understand the risk in option strategies.
The new era seems to be hey, ignore the rules if you think you can make some money, don't worry about it.
This is particular in this case because companies like Robinhood seem not only to ignore whether a client is knowledgeable or not to take a certain kind of risk, but they seem to be actively encouraging risk taking in that group. That's why my view that this rises to criminal negligence. A (highly?) imperfect analogy would be tobacco companies marketing cigarettes to minors.
I made a flippant joking post earlier about "moving fast and breaking things", but this is a real tragedy and I am starting to think that whenever Silicon Valley wants to disrupt something really important like our health or our wealth we should be VERY worried about our safety or the safety of those around us.
I have been making fun of Robinhood for months and saying that this will all end in tears, but I have to say that I am surprised by the speed and severity with which we have our first nationally publicized tragedy. The best imaginable outcome is if this somehow helps to prevent even more trouble down the line, but I doubt those who should be most concerned will even notice this new story, hopefully others will be able to make a difference.
I think this goes beyond simple KYC, which I think is shocking in this case. I think you could also argue that there is a basic consumer product safety argument that a lawyer might be able to make.
Seeing how egregious this example is makes me think that there is more to be concerned with regarding Robinhood than even its most vehement detractors might have imagined. In a worst case scenario, we may be making comparisons with the irresponsible behavior at Theranos once more becomes known about what has actually been going on with Robinhood that we are unaware of.
Why is it beyond KYC? And why you think KYC would have prevented this?
Yes, brokerages ask you to tell them how much experience you have trading options when opening account/allowing to trade options. You can simply lie. I know people who have lied... So, presumably what all brokerages do is not enough to prevent what happened. What would you expect Robinhood to do that goes beyond what other brokerages do? And why would you single out Robinhood for this?
Edit: when I started investing in 1990s, I was broke immigrant graduate student. I opened account at full service broker (Dean Witter) and they allowed me to trade options and buy crappy no-info BB stocks... I don't remember if they asked any questions... But I know some of my positions went to zero.
Well maybe times have changed, but IMO singling out Robinhood smacks of bias.
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Sorry man, staying at the Four Seasons is where I draw the line. Rooms are still starting at a grand a night. So I don't know if they're hurting that bad.
Yeah, I haven't been looking at prices, but some anecdotal data seem to suggest that pricing is not great.
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I couldn't find any flights to Bali :'(
You can always get a private charter.
#netjets-ftw
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Y'all need to step it up!
;D
There should be executive order for all rich people to book a dinner, stay, golf package at Mar-a-Lago or do time. We should not have unpatriotic behavior of hiding in their mansions. Jawohl!
I don’t know the current status but there was some chatter recently about making leisure travel expenses tax deductible for the year or something like that. Not kidding. :o
For people who are not scared to travel/etc., there might be some good travel opportunities around. ./shrug
Airfares and air travel though might not be very attractive, since airlines cut a lot of flights.
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Y'all need to step it up!
;D
There should be executive order for all rich people to book a dinner, stay, golf package at Mar-a-Lago or do time. We should not have unpatriotic behavior of hiding in their mansions. Jawohl!
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So the kid did actually kill himself. I had some doubts about that.
Now I'm not a lawyer, but I know that some of you are. So how does this not rise to the level of criminal negligence?
P.S. That Bill Brewster is a real deuche.
Is it a criminal negligence to send the 1.1mln Covid bill to the person even if he will not need to pay it ( https://time.com/5853392/million-dollars-covid-19-treatment-seattle/ )? Or is it criminal negligence only if he kills himself after seeing the bill (that he may not need to pay)?
Edit: is it criminal negligence for Fidelity to display that my accounts have $0 dollars in them (and all my lifetime savings have vanished) or is it criminal negligence only if I kill myself after seeing this? (Yes, this happened.)
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Is there general sense on this board the market is overvalued or closer to fairly valued?
You can start a poll with this question. 8)
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Yes, it is Lewis Carroll story: we had threads for all the above already. ::)
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Summary: infections and deaths continue to increase; likely no lockdowns and likely mask wearing and social distancing t®end to be ignored.
People die, but hey it's USA!
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Hell, New York State's estimated R0 has fallen to the 0.7 level and serology tests show 13% of the population have tested positive for antibodies.
And you are sure thie R0 decline is because of the 13% population testing positive and not because of the lockdown/social-distancing/masks? ::)
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Check out his twitter feed. He's 100% for real.
You'll loose some time you won't get back but it's good for a chuckle.
Yikes, I guess you are right. Seemed like he was drinking in most of his videos, day or night. I loved the irony of the 'I should be up a Billion dollars today!' line on the day old man Buffett watched his largest equity position - a tech stock - go up by $10.53 per share, while owning 250,866,566 shares of that tech stock.
Looks like there is a very real possibility that Berkshire's largest equity position will be worth more than the entire market cap of Wells Fargo at some point. But seriously, what have you done for me lately old man?
OT. I watched some of his Twitter videos and I am still not sure if he's serious or if he's playing Cramer/crazy day trader dude. If he is playing, great props for staying in character. OTOH, I only watched some videos, so maybe I missed the ticks.
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Earnings yield in 1999 was 3.04%.
73 / 1469 == 5%
Well, that's what I get for trusting the numbers and not doing the math myself.
So why does mutpl say "Jan 1, 1999 3.04%?"
Or "Jan 1, 2000 3.44%?"
Even if I pull their own numbers:
Dec 31, 1999 73.38
Dec 1, 1999 1,428.68
So I have no idea why their site says 3.x% instead of what the math actually says.
I'm sure I'm making some kind of mistake. Or not understanding something properly.
The 73 EPS number is inflation adjusted (April 2020 dollars) while the 1429 index level is not so the ratio isn’t economically meaningful.
The 3.x% earnings yield figure is correct as far as I know.
Thanks. My bad.
Using this:
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/spearn.htm
1999 earnings were 51.68. Which would have given expected return of ~3% from 1999 levels.
So 1999 was much worse in terms of valuation, whether we look at absolute numbers or relative to bond yields.
OTOH, earnings growth 1999 to 2019 was 6% and not 3% as I previously calculated.
More precise comparisons could be made by using vinod1's model. 8)
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Earnings yield in 1999 was 3.04%.
73 / 1469 == 5%
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Moved to more appropriate thread:
Looking at SP500 data, 1999 earnings were ~73 ( https://www.multpl.com/s-p-500-earnings/table/by-year ), SP500 finished 1999 at ~1469. Assuming 5% growth and 15 terminal PE, this price would have given expected ~7% annual return. At today's price, SP500 expected annual return is ~5%, which is lower than what could have been expected in 1999. But the 30y treasury rates are much lower too. So it's not an easy comparison.
Of course, anyone who looked at that earnings table would notice that SP500 earnings did not grow 5% per year from 1999. In fact, earnings in 2009 were lower than they were in 1999. Even going to 2019, the earnings only grew 3% annually for 20 year period. On the third hand, the estimates should be adjusted for divvies, etc like vinod1 did in his report on 2030-2040 SP500 predictions.
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Is that your screenshot below Jurgis???
Like how you roll homie, Charlie and Warren ain't got nothing on you! YOLO!
Not mine. I would never use Verizon. Is it yours?
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TINA! YOLO! MNGA (Make Nasdaq Great Again)!
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Bumpety bump for anyone interested to vote or in results.
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Let's all go to Vegas:
USA! USA! USA!
Make Covid Great Again!
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Let's all go to Vegas:
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A poll on Covid behaviors. May repeat it later to compare.
"20-Year-Old Robinhood Customer Commits Suicide After Seeing -$730,000 Balance"
in General Discussion
Posted
Yes, I disagree with you. I think that cheap (no) commissions is great by providing access to investing to people who had less access before.
Yes, I know people in Lithuania who want to invest $100 and have to pay $10 commissions to do it. That's 10% gone in one side of a trade. If you don't think that's a ripoff and creating a divide between rich and poor, that's your choice.
And I think you are biased, since you are financial professional and this is threatening your and your brethren livelihood. So you'd rather see Robinhood fail.
Edit: BTW, I would disallow trading options @ Robinhood. Or make them restricted to whatever large accounts. And I would probably ban forex trading for most individual accounts. Forex is a way bigger scam than Robinhood ever was and it's available and been around forever. In Lithuania too.