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TranceAddict Investors Club @ Marketocracy (pg. 183)
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| Capitalizt |
| No pain no gain. ;) In the past when I wanted to buy stocks, I actually make a conscious effort to find the worst performing sectors (in terms of stock price)..then searched through the wreckage for the leaders in those areas. It turned out to be a pretty successful strategy. The more the market hates something, the more interesting it is to me. Contrarianism all the way baby. |
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| Comrade Stalin |
Yes, contrarianism is definitely the foundation of my trading/investing strategies.
I was wrong on my prediction yesterday as the S&P500 fell in value against my prediction it would rise. That makes 0-1. I am making another prediction. Tomorrow, the S&P500 will rise in value. *Crosses fingers* |
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| Comrade Stalin |
Hey cap, you know I'm kind of anti-gold, somewhat because I just don't like the whole Ron Paul Libertarian gold bug thing. But this data seems awfully compelling to me. I think I'm going to play around with GLD.
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| Capitalizt |
Did it ever occur to you that the Ron Paul goldbugs might be on to something krypt? ;)
The fed already inflated their balance sheet to $2 trillion and are thinking of printing another trillion to throw at the economy. That's $3 trillion from them alone. And of course we have http://www.usdebtclock.org/ + $9 trillion to be added by 2020 according to the CBO + explosion in entitlement spending from baby boomers around that time = $30 trillion+.
Epic dollar devaluation required to sustain this. Tax increases and spending cuts won't put a dent in the problem. It doesn't matter what you think of libertarians on other political issues. They have it right on this.
| quote: | Originally posted by Comrade Stalin
Yes, contrarianism is definitely the foundation of my trading/investing strategies.
I was wrong on my prediction yesterday as the S&P500 fell in value against my prediction it would rise. That makes 0-1. I am making another prediction. Tomorrow, the S&P500 will rise in value. *Crosses fingers* |
As for GLD, see what your analysis says on SLV krypt. In terms of fundamentals, silver is ridiculously underpriced compared to gold. The vast majority of gold ever mined is still available in above-ground inventories..whereas 90%+ of the silver ever produced has been used and is in unrecoverable form (small amounts in electronics, etc). Also, gold only needs to double to reach it's inflation-adjusted peak..but silver needs to go up around 1000%. ;) |
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| Comrade Stalin |
| quote: | Originally posted by Capitalizt
Did it ever occur to you that the Ron Paul goldbugs might be on to something krypt? ;)
The fed already inflated their balance sheet to $2 trillion and are thinking of printing another trillion to throw at the economy. That's $3 trillion from them alone. And of course we have http://www.usdebtclock.org/ + $9 trillion to be added by 2020 according to the CBO + explosion in entitlement spending from baby boomers around that time = $30 trillion+.
Epic dollar devaluation required to sustain this. Tax increases and spending cuts won't put a dent in the problem. It doesn't matter what you think of libertarians on other political issues. They have it right on this. |
Most of the money has gone into illiquid assets and is not flowing through the economy, and thus, even though they've put huge amounts of money into the money supply, inflation is still zero. I think everyone agrees on the government debt part of this whole equation, even Obama. I don't think I'm going to "invest" in gold, but rather, just trade it, since it's the hot thing right now. I'm going to paper trade December gold futures and see how well I do with the parabolic SAR strategy with stop losses. Inflation just isn't on my radar.
| quote: | | As for GLD, see what your analysis says on SLV krypt. In terms of fundamentals, silver is ridiculously underpriced compared to gold. The vast majority of gold ever mined is still available in above-ground inventories..whereas 90%+ of the silver ever produced has been used and is in unrecoverable form (small amounts in electronics, etc). Also, gold only needs to double to reach it's inflation-adjusted peak..but silver needs to go up around 1000%. ;) |
Seems like you've already done the research! ;) I've gotten into trading far more than investing lately. So whatever analysis I have on silver is more likely to be nothing more than chart reading. The only fundamental analysis I do on commodities is the price action with assumptions on supply and demand. It's not like a company where I can rate it a buy or sell. If the price is at a 52-week low like UNG (nat gas), then I assume supply is how, price is low, and this should spur demand. But it usually never happens when you want. Many times, it may be at the 52 week low, and continue to go lower. I have tried the strategy of just buying at 52 week lows and it hasn't worked. Maybe if you did it with a long-term view like one year at least. I just don't have that kind of patience though when I have other stuff that are proven money makers and a better use of my capital. |
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| Capitalizt |
http://www.cnbc.com/id/39381947
ATMs That Sell Gold Bars Are Coming Soon to America
Published: Monday, 27 Sep 2010 | 12:07 PM ET
By: Reuters
A German firm that installs and manages gold vending machines aims to introduce them into the United States this year as it expands rapidly to take advantage of demand for bullion in times of economic uncertainty.
Thomas Geissler, creator of the Gold to Go brand and chief executive of Ex Oriente Lux, told Reuters on the sidelines of the London Bullion Market Association conference that the company aims to issue a "couple of hundred" machines next year.
Gold to Go launched its first ATM in Abu Dhabi's Emirates Palace hotel in May. They are now operating in luxury hotels in Abu Dhabi, Bergamo and Madrid as well as around Germany.
"This year we will issue around 35 machines, and for next year we are looking for bigger numbers," Geissler said on Monday, standing in front of one of the ATMS, which was coloured and shaped like a giant gold ingot close to 2 metres tall.
The machines, which update the gold price every 10 minutes to match international markets, take cash or credit cards and dispense small bars—including 1 gram, 5 gram, 10 gram and 1 ounce units—as well as coins such as South African Krugerrands, Australian Kangaroos and the Canadian Maple Leaf.
The company's plans include expansion into the United States this year, first in Florida and then in Las Vegas, Geissler said.
As for major gold consumers India and China, that will have to wait for next year, he said. "We have large interest in these countries," he said. "This is the task for next year."
Gold's rally this year has come largely as a product of investor unease over the economy.
This nervousness has been reflected in high sales of coins and bars from national mints, particularly last year as the world emerged from recession and this year as concerns have persisted about the risks to recovery.
With the gold price near record highs, there is a danger that demand from people on the street for gold products could tail off, however.
"Whether gold drops to $500 or goes to $2,000, we are living from small spreads, and we give people the best price they can get on a minute basis in the machine, so we're pretty fine with any price," Geissler said.
Gold to Go, which obtains the gold bars from refiners in Germany and Switzerland, first tested the machines in 2009.
Spot gold was quoted at $1,297.95 an ounce at 1235 GMT on Monday, up by over 18 percent this year and by over 80 percent since the unfolding of the credit crisis in late 2008.
GOOOOOOOOOOOOOOOOOOOOOOOOOOOOLD! |
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| Comrade Stalin |
| Sounds bubblish but I can't fight the trend... |
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| Capitalizt |
| quote: | Originally posted by Comrade Stalin
I am therefore entering in the following trade.
SELL 2200 shares of VXX @ limit of $16.68
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I'm guessing that is a marketocracy trade. ;)
I'm definitely getting UCO (oil double long ETF) if it touches $9 today. |
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| Comrade Stalin |
Thinkorswim ;-)
Much better than marketocracy. You can buy AND short stocks. You can also trade futures contracts, options contracts, and currencies on the FOREX, all in one account. What can you do in marketocracy? Buy stocks and that's it? And you have to follow all these rules! :whip: |
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| Comrade Stalin |
| Heh, I think you've got a while to wait ;-) |
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| Capitalizt |
Anyone want to give me a quick option lesson? lol I don't want to do anything fancy..or do lots of trades. I'll just say straight up..I expect SLV to be above $30 2 years from now. Thats a 50% gain in stock price..which is nice, but I'm guessing the option gain will be a lot more. I know the basics of puts/calls, but looking at this chart just confuses the hell out of me.
http://moneycentral.msn.com/investo...nth=1&Year=2012
If you owned no shares today, what should you buy on that list given the expectation of $30 SLV in 2012? |
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| Comrade Stalin |
| quote: | Originally posted by Capitalizt
Anyone want to give me a quick option lesson? lol I don't want to do anything fancy..or do lots of trades. I'll just say straight up..I expect SLV to be above $30 2 years from now. Thats a 50% gain in stock price..which is nice, but I'm guessing the option gain will be a lot more. I know the basics of puts/calls, but looking at this chart just confuses the hell out of me.
http://moneycentral.msn.com/investo...nth=1&Year=2012
If you owned no shares today, what should you buy on that list given the expectation of $30 SLV in 2012? |
Hmm. 2 years? The link you posted shows the expiration of those call options in January 2012 which is actually less than 2 years. If you look at the January 2013 options, that gives you your full 2 years plus 4 months. Keep in mind though, that the further out the expiration, the more you'll have to pay for the option, because you have to pay a time premium (you pay for extra time).
So take a look at these.
http://moneycentral.msn.com/investo...nth=1&Year=2013
You think SLV will be at or above $30 by January 2013. Then you want to look at the $30 strike price. Take a look at this one.
http://moneycentral.msn.com/detail/....SLV\13A19\30.0
This is the January 2013 $30 call option that sells for a premium of $2.90 at the time I looked at it. Each option is for 100 shares. So you have to multiply the premium by 100 and that's how much you'll have to pay for the call option. This one costs $290. There are 689 open contracts of this one call option so someone agrees with you! A rule I adhere to with options is to liquidate the contract at least 30 days to expiration because as the time to expiration approaches the value of the option exponentially declines (time decay). So you should sell this call option by December 2012.
Another option is to sell the January 2013 $30 put option for a premium of $11.10, which multiplied by 100 is $1110. You sell the option, and someone pays you for it. $1100 is a lot of money but the trade-off is that $30 is way out-of-the-money, meaning, the current price has to move A LOT for you to be safe that no one is going to exercise the put option on you. Since SLV can theoretically rise to infinite, your potential loss is infinite, while your maximum gain is limited to $1100. If the trade goes your way and SLV really is above $30 by January 2013, the put option expires worthless, and you get to keep that $1100, while whoever bought it from you lost $1100. It's a zero-sum game.
But as a matter of simplicity, just stick to buying the call option ;-)
Doing a little analysis of the SLV Jan 2013 $30 call option. I looked on my thinkorswim platform at its delta (which you should read about here http://www.investopedia.com/univers...eks/greeks2.asp). The current delta is 0.41. This mean that for every $1 SLV moves, the call option will move $0.41. So, using just 0.41 delta, I can make an approximate guess as to what the option is worth if you think SLV will be at or above $30. SLV is $8.5 away from $30. So if we multiply 8.5 x .41, we get 3.485. If we add 3.485 to the options current premium of 2.90, we get $6.385. So I would say that if SLV reached $30 or more, the call option would be worth around $6.385, giving you a 120% profit. Your $290 investment would be worth $638.50. But keep in mind that delta changes as the underlying security changes. So the .41 delta changes as SLV changes. So the $6.385 is a broad approximation and the actual value is likely to be different, but it gives you an idea of where the call option's value could go given an input, in this case $30 value for SLV.
If you buy this call option, and are wrong, and SLV does not go to $30 or above by January 2013, the call option will expire worthless, and you lose $290, if you haven't sold the call option already.
Give this tutorial a read too...
http://www.investopedia.com/university/options/ |
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