What are you buying today?

[Guest cherzeca]

if your timeline is over say 1 year, then anything here works, seems to me

[Ross812]

JPM, V, BRK-B, and KMI today.

[Guest]

If you're in you're 20s, 30s, or even 40s, you should be celebrating this downturn (obviously not the health effects). In fact, you should hope for further declines. I know I am.

[AzCactus]

If you're in you're 20s, 30s, or even 40s, you should be celebrating this downturn (obviously not the health effects). In fact, you should hope for further declines. I know I am.

 

Unless you run out of cash to invest. 

[no_free_lunch]

This is hardly worthwhile of this investment board but I bought VO.  Mid-cap US ETF.  Seems like a good compromise between survivability and upside.  It would need to surge over 60% to get back to prior highs.

[LC]

If you're in you're 20s, 30s, or even 40s, you should be celebrating this downturn (obviously not the health effects). In fact, you should hope for further declines. I know I am.

 

Unless you run out of cash to invest.

 

:D :D :D  :'(

[Guest]

If you're in you're 20s, 30s, or even 40s, you should be celebrating this downturn (obviously not the health effects). In fact, you should hope for further declines. I know I am.

 

Unless you run out of cash to invest.

 

Well, I should have qualified that as if you still have a job. :P

[Ross812]

I also cycled out of  some USMV to VOO.

[Artha158]

FLMN

[Artha158]

WFC

[Casey]

My thought for a while has been that SP 2000 will be the floor on all this, but having a hard time being patient.

 

More FB today.

[kab60]

WMB, KKR, SFL, ULTA,

[Sharad]

Purchased: Copart, Disney, Pizza Pizza Royalty Corp, and Texas Pacific Land Trust.

[Spekulatius]

Added a bit of RHM.DE. I liked it at ~70€, so it ought to be a good buy at 43€ and change.

 

Also bought back some beloved TRV @$77 and change. Second bid did not hit unfortunately. Sold this yesterday into the surge at close for more than $96. I call this type of market “Nantucket Sleighrides”.

 

Nothing makes sense any more until it does.

 

Also got a bit more FOX. People still watch TV, I think.

 

[TwoCitiesCapital]

Been rolling a number of my long positions into two year, deep in-the-money LEAPS which has freed up 40-50% of the cash in the positions.

 

 

Will be missing out on some sizable dividends, but have same notional exposure for capital gains and will hopefully make more than the dividends missed by putting the incremental capital to work as new names go down further.

 

 

[Gregmal]

A little HHC at the close.

[rb]

EPD, MO, WFC, ZBH, some BRKB

[LC]

Been rolling a number of my long positions into two year, deep in-the-money LEAPS which has freed up 40-50% of the cash in the positions.

 

 

Will be missing out on some sizable dividends, but have same notional exposure for capital gains and will hopefully make more than the dividends missed by putting the incremental capital to work as new names go down further.

Not a bad idea at all.

[turar]

Been rolling a number of my long positions into two year, deep in-the-money LEAPS which has freed up 40-50% of the cash in the positions.

 

 

Will be missing out on some sizable dividends, but have same notional exposure for capital gains and will hopefully make more than the dividends missed by putting the incremental capital to work as new names go down further.

Not a bad idea at all.

some of those premiums are pretty high looking

[Castanza]

Been rolling a number of my long positions into two year, deep in-the-money LEAPS which has freed up 40-50% of the cash in the positions.

 

 

Will be missing out on some sizable dividends, but have same notional exposure for capital gains and will hopefully make more than the dividends missed by putting the incremental capital to work as new names go down further.

Not a bad idea at all.

 

What would this look like in practice?

[LC]

Been rolling a number of my long positions into two year, deep in-the-money LEAPS which has freed up 40-50% of the cash in the positions.

 

 

Will be missing out on some sizable dividends, but have same notional exposure for capital gains and will hopefully make more than the dividends missed by putting the incremental capital to work as new names go down further.

Not a bad idea at all.

some of those premiums are pretty high looking

 

Yeah that's the only setback. You'll have to calculate how much the leverage will cost you. On some stocks it's far worse than others. But freeing up 50% of capital, if you can put that to work and generate expected return higher than your premium cost, it can be useful.

 

Use thoughtfully.

[LC]

Been rolling a number of my long positions into two year, deep in-the-money LEAPS which has freed up 40-50% of the cash in the positions.

 

 

Will be missing out on some sizable dividends, but have same notional exposure for capital gains and will hopefully make more than the dividends missed by putting the incremental capital to work as new names go down further.

Not a bad idea at all.

 

What would this look like in practice?

 

Lets say I own 100 shares of Visa, average cost is 170. Current price is 145 or so.

 

Buy 1 Call, strike price 85, expiration Jun-2022, for about 67/sh.

 

Essentially you're buying 100 shares for 152/share (85 strike + 67 call price). But you only need to put up 6700 rather than 14,500 in the market.

 

So your cost here is 7/share premium divided by the amount of cash you are borrowing ie 14500-6700 or 7800, about 9% or so.

 

Pricey, but again it depends what your expectations are for that freed-up-cash.

[Castanza]

Been rolling a number of my long positions into two year, deep in-the-money LEAPS which has freed up 40-50% of the cash in the positions.

 

 

Will be missing out on some sizable dividends, but have same notional exposure for capital gains and will hopefully make more than the dividends missed by putting the incremental capital to work as new names go down further.

Not a bad idea at all.

 

What would this look like in practice?

 

Lets say I own 100 shares of Visa, average cost is 170. Current price is 145 or so.

 

Buy 1 Call, strike price 85, expiration Jun-2022, for about 67/sh.

 

Essentially you're buying 100 shares for 152/share (85 strike + 67 call price). But you only need to put up 6700 rather than 14,500 in the market.

 

So your cost here is 7/share premium divided by the amount of cash you are borrowing ie 14500-6700 or 7800, about 9% or so.

 

Pricey, but again it depends what your expectations are for that freed-up-cash.

 

Interesting, thanks for sharing. For some reason I was thinking it was more complicated than that haha

[LC]

There are other structures you can use to achieve the same, for example

 

You can buy the full 100 shares for 14,500 and margin the 7800 against it; use some of the 7800 to purchase a put option to prevent a margin call, and invest the remainder.

[matts]

Been rolling a number of my long positions into two year, deep in-the-money LEAPS which has freed up 40-50% of the cash in the positions.

 

 

Will be missing out on some sizable dividends, but have same notional exposure for capital gains and will hopefully make more than the dividends missed by putting the incremental capital to work as new names go down further.

Not a bad idea at all.

 

What would this look like in practice?

 

Lets say I own 100 shares of Visa, average cost is 170. Current price is 145 or so.

 

Buy 1 Call, strike price 85, expiration Jun-2022, for about 67/sh.

 

Essentially you're buying 100 shares for 152/share (85 strike + 67 call price). But you only need to put up 6700 rather than 14,500 in the market.

 

So your cost here is 7/share premium divided by the amount of cash you are borrowing ie 14500-6700 or 7800, about 9% or so.

 

Pricey, but again it depends what your expectations are for that freed-up-cash.

 

I'm sure LC knows this but just wanted to clarify for others:

 

That $7 "cost" is spread over 2.2 years so the annual leverage cost is much less than 9%

 

Also, visa pays a $1.20 annual dividend so you have to add (1.2x2.2 years) to the $7 cost as you miss out on dividends. That assumes the dividend will not change, which isn't necessarily true.

 

Adjusting for the above I see about a 2.7% annual cost of leverage. It's not totally equivalent to borrowing on margin from your broker because the above assumes visa doesn't fall below $85 at the time of expiration.