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philippoc93

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About philippoc93

  • Birthday 06/24/1992

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  1. 25.29 % for my first year as an investor net of expenses but pre-tax. Biggest contributors to this gain were DVN and PLBC Laggards have been BXE, STNG, and GILD Best luck to everyone in 2017 :)
  2. That macro play makes sense in this current environment. A few questions if you don't mind answering? 1) What length contracts are you using? LEAPS or options? 2) How do you select your strike price? Do you base it off a 10%,15%,20% decline or is it a certain return you are looking for? 3) What percent of your portfolio do you attribute to this? 4) Finally, do you view this as insurance for your long portfolio or are you using a barbell approach? Thanks a lot. I'm still learning about options and it's only my first year to properly running my own portfolio. Still saving up the funds to have enough to utilise options effectively.
  3. ISNS - I expect revenue to decline to steady and begin growing in 2017, expenses are under control and A.Berger owns just under 20%. He knows what he's doing and is the Executive Chairman of the board now
  4. ....for $17.80 per share in preferred units of Steel Partners aha - thank you sir
  5. This is very interesting. I'd love to see the data on M&A, you have some fun with that
  6. By cash flow positive I mean cash in after paying mortgage principal/interest, condo fees, property taxes, insurance, repairs, etc. Basically everything. I do self manage, so that is a cost I'm generally not considering that I probably should. I would never buy anything at <3% rental yield. Rough metrics on my best cash flow deal: Purchase + renovations + closing: 160k Rent: 1500/month 1st Mortgage, 120k@4%, 30 year amortisation: $570/month HELOC for 40k, interest only at 3.5%: $117/month Condo Fees (including heat/water/sewer): $400/month Property Taxes: $90/month Landlord Insurance: $12/month Repairs/maintenance: $50/month average Costs: $1239/month That works out to a 7% going-in cap rate, which isn't unheard of for a real estate investment, although it is quite good a residential rental where I live. The condo corp (HOA) of this building was in shambles when I bought it. I had to take some (not very complicated) legal actions to get the documents in order, then get a proper building manager hired. Most of the other owners were victims of some sort of mortgage fraud, my unit got foreclosed on and I bought it from the bank. I would say the market inefficiency isn't in the renters (you only ever get market rent), its in the purchase market. This condo was worth well over $200k after I took some fairly simple actions. But, most people wouldn't want to be bothered doing that. I'm still holding on to my dry powder, as the foreclosures from the oil price induced economic drop here haven't made it through the system in earnest yet. If you're seriously interested in RE investment and the rental yields where you live are 2.5%, I'd just do it somewhere else. I would have done better to buy in Phoenix in 2009 than Calgary, and if I had capital that needed a home in RE I'd still put it in the US. Thanks for sharing Bizaro. I just got the book by William Nickerson and will read. You guys are a little more fortunate in the US in that you have so many little micro markets within the greater US housing market. There will always be some sort of inefficiency to exploit somewhere. Being from Ireland, the time for half priced € (RE on the cheap) came and went in 2009-2011, but my father also made some very good purchases off banks back then, a few office buildings and houses for 30-40% of cost of construction. People and the backs were in a real bind and just jumping at any offer to get some liquidity. Opportunity of a lifetime. The market is now fully priced and the only place to make money is in development in Dublin, but the capital required is immense and the big boys have already moved in i.e. Cairn Homes. My thoughts on 50% returns - definitely possible, Samir Patel of Askeladden Capital is up 56% gross for the year as per his Q3 letter. He's only 22 years old too- http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/the-22-year-old-hedge-fund-manager/
  7. Thanks for the link Phil. I read through few of his articles. It is a very viable strategy, and as he says relatively cheap. Basically he picks companies that are heavily leveraged in some way to the economy, and buys way out of the money puts. He allows them to expire worthless, unless there is a significant market pullback. He spreads them across industries. The bulk of his 'normal' portfolio is in dividend growers, which he mostly leaves on autopilot unless they become way overvalued, and it seems unsustainable. So, recently he has shorted (via puts) capital one financial (cof) the premise here is that in a recession/pullback credit defaults in cards will rise. The stock always tanks with the general market. Ual - United Airlines parent - heavily leveraged to all sorts of good economic news - very vulnerable in a downturn - It is near cyclical highs and always crashes with the markets. Why anyone would ever buy this company is beyond me. Gt - goodyear tire and rubber - leveraged to the auto industry Maasco - levered to home sales and home repairs marriot hotels - levered to a healthy economy Generally all the companies he has picked also have greater than industry financial leverage as well. He has several more suggestions. I have been looking for ideas to protect my assets without going to cash, and am exploring this. In the past I have tried index puts, with little success - they tend to be expensive and decay quickly. Uccmal, Happy you found it useful. I learned something also - how to write a perfect summary ;D Phil
  8. Ye I guess I was making the implicit assumption that the option would expire worthless, but one might like to close out the position by buying the option back just to remove the remaining risk, thus lowering your return slightly. I like the way you compare the premiums to options. I hadn't thought of it that way, but it makes sense.
  9. Because if you wait for volatile markets, you can make pretty high premiums. A few months back I sold puts @ $7 on Blackberry when it was around $7.50 on it's way down from $9+. For a contract that had six weeks left until expiry I was paid $0.50 per share ($50 per contract) for risking $700 for 6 weeks. That's a 7% return in 6 weeks. It's hard to imagine finding better opportunities than that. Wait for attractive premiums and sell the contract and if it goes well then you've covered the opportunity cost of that cash for the entire year with a single trade. If it doesn't go well, your cash gets put to work at a lower price than it would have if you had purchased the stock outright. Ye when you can get those sort of premiums, it definitely can cover the opportunity costs. Was your money at risk not only $650 though, $700 - $50 premium you received. I don't know anything about Blackberry, but I take it that you didn't think you would be put to at $7, or if you were, you wouldn't have minded getting the stock at a reduced cost of $6.50? Thanks for the reply btw
  10. https://groups.yahoo.com/neo/groups/smf_addin/info This baby is a gem
  11. This might be a silly question and comes from someone with no experience of options - just starting to learn :). What I haven't been able to visualise in my head as of yet is; why would someone leave that cash pile just sitting there doing nothing? Yes, you earn the premium and can roll the options from period to period as an income stream, but there there must be surely a better way to get the most of your money? Is the premium really worth when you have to leave all that cash in the bunker for safe keeping from the chance of getting put to? I know that it can indeed be worth it in times of big volatility. Could somebody enlighten me with some examples? :-\
  12. An author I follow on SA has been talking about hedging his positions by 30% for the last year or two. Instead of buying puts on the SPY, he buys them for specific companies that have tight margins, are over valued and have performed poorly in recent recessions, all at a cost below 3%. Hes actually had the insurance for free for the last two years and the proceeds have paid for his 2016 insurance. http://seekingalpha.com/article/2177103-the-time-to-hedge-is-now-do-it-for-less-part-i?source=author_profile_page He spreads the puts out among the weakest companies in the industries in which his holdings are operating. Interested to hear what you guys make of this strategy? Phil
  13. Undervalued, Not one to knit pick, particularly when this thread seems to not have been stirred in a while, but the above quote might be a little inappropriate (unfortunate) in this particular instance: “And he was willing to borrow money to make money, whereas Buffett had never borrowed a significant sum in his life. “I need three million dollars,” Munger would say, on one of his frequent visits to the Union Bank of California. “Sign here,” the bank would reply.25 With these huge sums, Munger did enormous trades like British Columbia Power, which was selling at around $19 and being taken over by the Canadian government at a little more than $22. Munger put not just his whole partnership, but all the money he had, and all that he could borrow into an arbitrage on this single stock26—but only because there was almost no chance that this deal would fall apart. When the transaction went through, the deal paid off handsomely.” Its from the snowball effect by Schroeder I don't have the exact quote Munger made (I think it's the baseball pitch analogy), but I believe that it was along the lines of - when odds are and risk/reward (expected value) is incredibly in your favour, it's time to bet big. I think this is the time to use leverage. Now I can't offer any practical experience, because I have never used leverage in my long and prestiged 4 month investment career. However, I'm starting to absorb as much about options, non recourse leverage as I can now, so I'm ready to pounce when there is blood in the streets. I wouldn't be touching leverage now at such elevated valuations. Was considering it for some of the oil plays, but then thought that was a stupid move as they are already a massively levered play. My thoughts got ahead of me there so I'll stop now. Lovely to make your acquaintance everyone and I look forward to great discussion with you all. Phil
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