Gregmal

shorted some PTON immediately AH at 81 and 74. Having just had a front row seat with Z, I think I can guess what the news digestion is going to look like LOL. EDIT: grabbed a bit of ATUS AH at 18 as well. Both trades looking for the momo to continue for a good bit. Probably into next week.

Small position in HCDI preferred. Pretty interesting situation. Bit of a dumpster dive but getting paid for it and the announcement today showing a belief in the common means I'm a little more positive on the preferred.

Jesus Christ. I'd love it, pretty much to the max, but fuck, how do you claim to be a party of the working class while now stuffing into one of the most scrutinized bills in modern memory, a tax deduction greater than the wages of the average person?

^its funny you mention that cuz I recall seeing and thinking the exact same thing during covid with some retail CRE. Granted, there’s very different individual dynamics and scenarios. But the general gist is people often just sit tight rather than sell, to the extent they can manage to just carry the property. It wasn’t that prices went down; there was no transactions happening. When things are good, people tend to transact and move up quite a bit more. Along with newer market participants joining the fray.

https://seekingalpha.com/news/3764295-its-difficult-to-predict-future-of-supply-issues-on-inflation-powell-press-conference We were so certain about the transitory nature of inflation when we rammed all that policy nonsense down your throats. Now? Its hard to predict! LOL What's easy to predict is the incompetence of these guys!

Perhaps. I dont think we're there yet, but you want to look for the signs because sentiment always starts getting priced in well before the event. Going from ESG/Clean energy + covid disruption to drill, baby, drill could be wild. Look at the Obama era clean energy plays like WPRT and CLNE and their historic performance. Both are retail stocks but both give a good pulse on the difference between investing in those spaces during red control vs blue control. Many of the exit polls indicated people were over all the covid nonsense and their biggest concerns where the economy and high gas prices. So that may spark some rethought of the current stance, which is largely the tailwind you want here if long on the super cycle thesis. ESG by itself is cute, but you need several of the catalysts to come together for it to work.

I would say that the VA and NJ gov races potentially indicate a threat to the energy crisis/super cycle thesis. People are wisening up and if certain types of politicians get enough support there will be drilling again. Its an easy problem to solve. The whole oil to $150-200 a barrel thesis is predicated on incompetence and misplaced(or deliberate) policy that promotes the restriction of traditional energy sources along with lots of free money. If that stops the opportunity is much less attractive.

Whats incredible to me is how 1) a company actually reversed course on something that made little sense and actually took responsibility. I cant say the last time Ive seen something like that. 2) How Z, being the market leader, with the best data, basically just admitted how bad of a business ibuying is. There's a lot I would have done differently to try to make ibuying work that frankly I was shocked they didnt do. It was basically just buy, try to flip...thats it. Which in a market where renting is insane and capital is basically free, it was totally underwhelming they didnt try to do more. But wow, a market leader basically coming out and saying this business sucks and we dont want anything to do with it and will risk looking like total idiots just to get out of it? Wow again.

The market is always interesting. You’ve lost ~$4-5B and who knows how much more over the coming days because they disposed of $3B in assets at a $500M loss and exited a business most(maybe I’m wrong about the word most) believed was absolutely crummy to begin with….shrug shoulders LOL

2024 OPEN puts $10 strike. In a way I didnt even appreciate at first, it kind of hedges a lot of different things for me. On top of making sense on a simple level.

While I think bubble stocks could work, Ive started adding value trap old economy type names in terms of puts and shorts. You've got a good list of names to choose from that have basically sucked a giant shlong during the greatest decade of returns we've all seen, and now trade elevated because of the whole covid liquidity injection. If things go south I cant imagine they hold up well, and after continuing to see rotation and enthusiasm back into tech and bubble stuff, I think you also have to appreciate that theres no robinhood's, FANG bros, or late to the party hedge funds buying the crummy old economy laggards. Theyre not hard or expensive to short either. Value investors dont even want them anymore. A few names I'd throw out there would be AAL, IBM, INTC, ORCL, GE....those type of companies.

This should only be a concern if you index or buy index like names. Frankly, I'd love volatility and risk to come back into the markets.

Yea people regularly make idiotic decisions that influence their investing. And ironically enough, it isnt the guy saying the earth is flat or that 80% of the world will die from a vaccine....its the people saying "he said the earth is flat so I dont care what he's investing in even though his record is excellent"....

Kudos SJ. There was discussion about this in another thread, not one relating to FFH but just portfolio management in general. If you are hedging, it is mitigate certain risks and allow other parts of your portfolio to flourish. To this extent, you can continually justify taking losses in certain areas to justify gains in others. But when your "hedges" are total losses and your long exposure is costing you money as well.....something is very wrong.

And what does any of this have to do with evaluating an investment idea or theme on its merits?

I mean, there’s ALREADY been SOOO much money made in the inflation trade, it’s surprising that there’s even anything to debate on the merits of the idea at this point. However I guess I fail to appreciate how some folks refuse to make money from an idea that comes from someone who has different beliefs elsewhere than they do. How dumb.

And your judgment has led to what kind of performance? I would almost guarantee the political motivated idiot has crushed yours? Which makes you? It’s amazing people just ignore ideas because they find something to disagree with….or are afraid of out of the box mental exercises. People who have proven to be able to generate alpha trump people who just give a worthless opinion with little else attached to it. I mean what would you call it if you wasted a significant amount of time and more importantly money being long the GSEs?

Yea I mean look, everyone needs to find their comfort zone. I've found over time, finding a comfort zone is sometimes facilitated by stepping out of ones comfort zone just a little bit and testing out new stuff or stuff that one might "perceive" as risky. Just this year alone Ive probably generating a double digit return from put sales. Gotten exercised less than 15% of the time. Almost everything that was put to me was later sold at a profit. Pick your spots. Stick with stuff you like, or stuff you think is too good to pass up(IE GME March $20 puts for $1.50 when the stock is at $300 in February LOL)...Never risk ruin...period. I just think too often people spend so much time assigning these absurd probabilities or risks to things that just dont warrant it. I still cant get out of my head all the "yea but covid killed retail, malls are dead" nonsense last year back when Simon was at $60. At some point its just like.....really????? Why even invest if at this sort of slam dunk opportunity you still talk yourself out of it? Even if you bought it the day before the covid decline at $140(I did, in addition to a shit ton of LEAPs at $50)...you ended up being fine not even 12 months later. So just sometimes, I try to encourage folks to step outside the vacuum because the world doesnt exist in one. Framing things in an unconventional way often helps change your perception. @boilermaker75 example is brilliantly put. Its selling insurance, the best type, with the lowest risk, and only at your discretion. If done correctly, its very, very, hard to lose.

I mean another iteration of the benefit is if you want to go long sell a shorter dated put and buy a longer dated call and unless YOU ARE WRONG you never even have to take money out of your pocket.

You guys are entering the trade for the wrong reasons then. @boilermaker75 not surprisingly has it down 100% right. I don’t really give a shit whether i own the stock or not, I’m really just selling insurance to folks on stuff that I can deal with owning at that price/valuation. If MO at 41.30 cost does me in, so be it. But I’d wager(as I am) that I either make money on the put sale or can make money from that basis. I don’t care if it gets bought for $50000 a share tomorrow. If it goes to $25 I should’ve been more selective obviously in hindsite, but that’s always a risk in the market anyway. People love to complicate the heck out of things which is what I think is going on here. Every stock can go up or down a lot. That’s not a risk specific to selling puts.

I don’t think I’ve ever felt screwed when a stock goes up that I don’t own. Here you are just committing to buy it at price that’s currently below market. You’re getting paid not to own it. If you like it enough right now you should just be buying it. I mean think about it, how many times do you see folks go “I’ll buy the dip”…”can’t wait to buy more at lower prices”…then the dip comes and they shit their pants and freeze up and do nothing.

Haha I don’t know. If anything I think it’s less. All I remember from 10 years ago is that investing had consequences. A bad earnings miss would cause a 25% haircut. Now just look at big tech. Goog and MSFT crush it and go up 5% and AMZN and NFLX post putrid numbers and are down 2% for a day and then in a week go up 5% too. As a fan of history and with respect for the markets and their inherent cycles….I would take that macro type of psychological driver of the herds into consideration as far as making and planning future investment strategies.

Haha its exactly that. This sort of thing applies to a lot of investing. You really just have to wrap your head around the intended purpose and objective of what you're doing, and then its really easy and for the most part stress free. I have had so many convos with people about selling puts over the years and it always initially came back with some iteration of "yea but if the stock goes down a lot you get screwed"....but then its like....well, you might get screwed, but you get screwed less than if you just bought the shares. And if you arent interesting in owning the shares, why would you short the put? And then theres a eureka! moment.

In either event though you need to define and then come to terms with what you looking to accomplish. If it s a hedge, you arent looking to make money. If its kind of a hedge but also kind of a trade, then thats different too. If it is a straight trade, then thats probably the only scenario where you would fully expect to make money on the trade and you really have to make sure all your ducks are in a row. I say this because it took me a while and a good amount of burnt money to realize this. You can put on trades that look good but have poor odds of working; happens all the time and theres no better example than the classic valuation short. I've generally over the years stopped trading on the short side with the sole purpose of making money. I sometimes outright hedge, but its less frequent. My 2020 P&L, specifically on the L side has some real funny looking stuff. Shorts that went against me 50-100% in a quarter or two. Options that were total losses. But in the context of what they were in place for, they worked, because it let the long side do its thing. Only thing that matters is how the aggregate end total looked, and in that instance, I was quite happy. Where I've been at in 2021 is very similar to the trade @rkbabangmentioned on TSLA. Will it make money? Probably not. Is it even about TSLA? Not really. If shit blows up does it work? Oh hell yea. If shit doesnt blow up is there a chance it still works...maybe, maybe not. But it covers your ass with some high octane fuel. Tickers are really just an opportunity set and even within the tickers there are opportunities within each individual option chain. All of it is just a means to an end...so define what your end is. On the AAL hedge trade for instance, I am still putting it on, but the idea is that I am getting 2+ years worth of protection and with about 5% risked in the form of options thats a negligible annualized drag. But the payouts could be anywhere from 3:1 all the way up to 10:1 or more. If rates rise it will almost certainly work. And if rates dont rise, it could still also work. If the market keeps going up, its probably not going to work. If the market tanks it will work. Different avenues, but multiple avenues to win. But you also have to be OK with losing. Because if you're doing it right, in the aggregate, when you lose on these trades, you are winning on the other stuff which more than offsets itself. Much different than when you just go long something.

Exactly. Too often people model these things in a vacuum. Well if rates go to 6% housing is fucked. However there’s reasons and things that happen that produce a 6% mortgage rate. And a lot of them aren’t wholly negative. Most as I’ve stated is my belief, won’t really matter one way or the other. I’m trying to explain that to a bunch of incompetent homeowners in a community where I am a trustee. They’re outraged dues went up 3% for NTM. And I’m like “1) have you been living under a rock? How much has your gas bill gone up? What about insurance? 2) your fuckin home value increased 35% year over year! Piss off”