Ross812

For me, I was trying to update bank information. I've had an account since 2008 or 09 and had multiple checking accounts linked (you used to not have to get the wizard's seal). I deleted two accounts no problem, deleted the third and my account was locked for suspicious activity. The agrivating thing was most of the time I called, it would go through the menu and just hang up due to high call volume. They conditioned me to be thankful to be on hold! We have a lot of i-bonds so I was pretty motivated to regain access.

@TwoCitiesCapital, fair point on the Atlanta Fed. Below is the historic spread between the 10-yr and the 30-yr mortgage (borrowed from Wabuffo's twitter). I think it tells an interesting story about the uncertainty the banks have about the direction of long term rates. The longer term average spread is about 170 bps and is nearly 300 bps right now. To me, this implies the risk departments at the banks are projecting a future the 10-yr around 5.8% (170 bps off the prime mortgage rate). The 10-yr is at 4.16 today which is 33 bps over the FFR. I'd say the risk departments at the banks are much more informed than any of us so they are thinking a FFR of maybe 5.5% in today's messed up economy? What are the implications of a FFR of 5.5%, 5.8% 10-yr, and a 6% 20-yr? That's an implied hurdle on the SP500 of 7.3% with a risk premium of 1.5% over the 10 yr. A DCF of the SP500 at 8.9% growth with today's earnings and a that discount rate gets us to the SP500 at 3670. Does that mean we are fairly valued now?

Edited to say this has since been revised from 3.1% to 3.6%.

I mean the 20-yr is a 4.56% today with a FFR today at 3.83%. I think you might be right and the yield curve may stay inverted if we have a short peak and relaxation of the FFR. If we get something akin to the 90's with the FFR, I think the curves will normalize and you have a 10-yr about 1% over the 2-yr and 20-yr 0.5 to 1% over the 10-yr. I don't see any way the 20-yr doesn't at least stay within 50 bps of the FFR. I think the FFR is going to have to go over the PCE inflation rate. We are a 80 bps from parity now. The amount of overshoot needed and the timing is the problem.

The trimmed mean PCE inflation rate is 4.7% right now. I think the FFR needs to go at least 100bps over this (lets call it 5.5 to 6%) to help tamp down inflation. The 10-yr should be about 1% higher at 6.5% - 7%. Throw on an equity risk premium of 1.5% and need equities to yield 8-8.5%. We have a lot more downward momentum if rates keep being pushed up and have to stay there for a while. The smartest move might be to follow @thepupil into bonds and hang out in 90 day T-bills and add duration once the yield curves start to normalize. The 20-yr should be paying around 7-8% with the FFR at 5%+. Wait for equities to over correct and sell the bonds once rates are cut. I am starting to see the wisdom in what @changegonnacome is saying about only investing in EV/FCF monsters with a margin of safety to the 8-8.5% required equity yield coming.

Closed out my $38 ebay puts on the bump after earnings thus morning. Bought some 90 day treasuries yielding 4.2%.

The bulk of our money is in the following allocation: 25% - Utilities (increased from 20% this year) 20% - Healthcare 20% - Small cap consumer staples 10% - Berkshire 10% - Nasdaq 10% - Gold 5% - Small Value The benchmark (with the representative ETFs) is down about 8% as of this morning. I am down 6% as I trade around in those allocations and play with lots of options. My pooled trading account with OPM which I mostly discuss here is down 6.6% this year. I was up 15% at one time this year.

Gamestop was just the beginning. The number of retail traders through around trading daily options on SPX, XSP, SPY, QQQ etc is through the roof. The reddit bro with a 20k account trading 5 options of XSP is controlling $187.5K worth of equities for $950. The last chat room I looked at had about 50 people actively posting at any given time and three times that during a big new event like the FOMC. The IWM trade I posted about in the other thread came off the message board. You take 150 people throwing $500 leveraged 200x and you are talking $15M repeated two or three times this afternoon. They are not all winning, but the market maker has to buy the shares to remain neutral. That is one message board. If the average stock bro had 20k - the total collective account size on the board is $3M. COBF has individuals with far larger accounts, but I doubt we threw around $15M collectively today. Their message board threw around $30M+ today!

I think this time around we may be in a case of "this time is different". The number of "free" brokerages has exploded and the leverage offered to short term traders with options and futures is insane. Many of these traders are agnostic on the direction of the market; they only want the volatility. The short term "static" has increased; the long term direction is still dictated by fundamentals.

Yep. He messaged me to tell me to trade the lag between the S&P500 and the Russel. Three minutes later: I guess that is one way to make a buck... He said he has made the same trade every FOMC meeting in the direction the other more responsive indices are heading. He loads up on daily IWM calls/puts slightly OTM and sells 5 minutes later.

I have a friend who is a trader and uses options/futures contracts around news events like today's FOMC announcement to trade. I as kind of struck by how all the large cap indexes get pulled around by market makers buying/selling to adjust for all the leverage being used. Look at all the big indexes with lots of options liquidity being pulled around versus the Russel 2000. It is kind of ridiculous.

I got locked out of my account earlier this summer and spent 6 hours on hold one day. You are going to lean all the hold music and their fund facts!

Sold ITM covered calls on TMUS, AIV and CASH for the 18th. Traded around some OSTK puts sold last week, closed the $25 puts for a 30c gain when the shares are down $1.50. I know there was a lot of volatility priced in with earnings but damn. Sold more puts down a $1 at $22.50. I am trying to occupy myself and keep some powder dry. I sold out of a 20% TBF position that grew to a 30% position after holding onto it for 12 months. I'm still down 5.5% for the year thanks to my conviction in Meta and Google.

Oban 14 and a fire here.

Sold puts on OSTK at $25 and $23 and EBAY at $38 expiring next week and two weeks. Added a little to google (to bring me back up to a 10% allocation). Switched from shares to ITM puts on CASH through earnings.

I stumbled on Medifast - Med the other day. PE around 8 and likes to return cash to shareholders. I also went fishing in the beaten up boating companies and MarineMax - HZO looks interesting.

And he isn't even middle class! The latest census numbers indicate what income ranges constitute the middle class (as of 2020). This will depend on family size. For a single individual, a middle-class income ranges from $30,000 - $90,000 per year. For a couple it starts at $42,430 up to $127,300; for a family of three, $60,000 - $180,000; and four $67,100 - $201,270.

I think short term rates and the increases we have seen so far in mortgages are trickling down more than you think. Homeowners cashed out $275B worth of home equity last year. That's about the same as the $1200/adult and $500/child covid stimulus checks. That's an indirect stimulus that has completely dried up. Look no further than lumber prices and new home starts to see the impacts of raising interest rates.

Your post just made my head hurt.

Yeah, I don't have a high opinion of Florida in general. I completely understand living there in the winter, but the summers are awful. The state is essentially rural Alabama/Mississippi 5 miles inland and much of the costal area is no better than living anywhere in the Caribbean as far as shitty areas with swaths of resort type communities. I like the ex-pat lifestyle and people much better. The Florida coast seems full of retires who are either too sick or too small minded to be ex-pats. 1.1M buys you a gorgeous lake front home anywhere in the south. For 8M, you could have a lakefront compound complete with your own security .

In this case, they immediately listed the house for rent for 67k per year. Taxes and a 5% note are 50k and insurance/HOA are going to be another 10k. Sounds a bit housing boom 2.0 to me. On a side note, who are these buyers competing for condos and homes in Panama City Florida? I saw a house on the beach listed for 8M up from 1.5M in 2019. The job prospects in the city are nothing like a tier 1 or even tier 2 city. Is this all Boomers competing against each other to move to the sunshine state?

Sold my entire ATCO position and put half of it into MKL.

Didn't Powell already cave to political pressure when he cut rates in response to Trump's tweets?

We have a vacation home at a lake 1.5 hours from our house and spend quite a bit of time there when it isn't rented on AirBnB. Repeats are Costa Rica and south France (wife speaks French). Must see we have been to are really anywhere in Europe - we travel for wine, Bonaire (scuba), and Goa/Jodhpur India. We have tickets booked for Portugal and France this fall/spring. We are also planning on returning to India - Uttar Pradesh and Punjab.

States have to balance their budget and can't print. So residents are choosing what to spend money on instead of the state I guess? Almost like when and insurance company gives back a residual.