stock market was up today...

[NorthDallas40]

This isn’t “playing with” an investment. It is enhancing the return on idle cash. It is a great alternative to setting up a limit order to buy shares a few dollars below the current market price. You get paid a percent or two if the share price fails to drop to your chosen strike price. Actually you get paid tgat premium no matter what happens with the share price.

Understood. But I won’t even be touching these funds for two years as my short term retirement income for two years is already in another stable value account. So I really would be looking two years down the road on what value these chunks will be. All in all I’m in a pretty good position.

And… if I go to my wife and read back what you typed and say I’m gonna do that with our retirement money they’d never find my body . But now that I’ve got a lot of free time on my hands I might carve out 10k of play money and see what I can drum up. I’ve got a couple of more retired buddies spending more time doing that now.

 

[Rasputin_Vol]

No, he can't. Its underperformed inflation and the S&P over the past 5 years.....

View attachment 494579

$16/oz in 2017 to $20/oz today is 25% based on your graph.

 

[Orangeburst]

Understood. But I won’t even be touching these funds for two years as my short term retirement income for two years is already in another stable value account. So I really would be looking two years down the road on what value these chunks will be. All in all I’m in a pretty good position.

And… if I go to my wife and read back what you typed and say I’m gonna do that with our retirement money they’d never find my body . But now that I’ve got a lot of free time on my hands I might carve out 10k of play money and see what I can drum up. I’ve got a couple of more retired buddies spending more time doing that now.

Give me 10K and I will triple your gains. Guranateed winner with Little Jerry

 

[Thunder Good-Oil]

Understood. But I won’t even be touching these funds for two years as my short term retirement income for two years is already in another stable value account. So I really would be looking two years down the road on what value these chunks will be. All in all I’m in a pretty good position.

And… if I go to my wife and read back what you typed and say I’m gonna do that with our retirement money they’d never find my body . But now that I’ve got a lot of free time on my hands I might carve out 10k of play money and see what I can drum up. I’ve got a couple of more retired buddies spending more time doing that now.

The Diamonds ETF (DIA-based on the DJIA) is $296.73/share right now and has LEAP options available. The DIA 2024 06 21 P 280 (June 21, 2024 put option with a strike of $280) pays between $2,105 and $2,530. The risk is having to buy $29,673 of what a security costs today for $28,000 in June 2024. DIAs are probably going to have a market value well above $28,000 in June 2024. The option contract can be bought at a discount and closed well before June 2024 for a net profit if the DJIA goes up. But again, this is for CASH that isn’t invested in anything other than short term debt that I’m outlining the scenarios. There are also a couple thousand underlying securities - each with hundreds of strike/expiration combinations.

I prefer to sell options inside of a retirement account and not having to deal with the taxes. And I also prefer to keep the expirations no more than 2-3 weeks out right now. That frees up the investment capital to sell more cash reserves puts. 1%-2% a couple time a month without much risk. I also use shares of something that I don’t mind owning if I am assigned the stock/ETF after selling the put contract.

Using $10,000 the strike of a selected option would need to be $100 or less ($100/share x 100 shares). There are many of those securities that can be optioned. Today I attempted to purchase LABU put contracts. LABU shares (a very risky security) closed at $7.52. I tried to buy next Friday’s put with a $7.50 strike. The cash reserve requirement is $750/contract (13x contracts could have been had with $10k in reserve). I tried to get $85/put contract (over $1,100 if 13 contracts). That could have been a return of over 10% in about 10 days. Using LABU as the underlying security most definitely requires play money as this scenario is very speculative in nature.

 

[Velo Vol]

The Diamonds ETF (DIA-based on the DJIA) is $296.73/share right now and has LEAP options available. The DIA 2024 06 21 P 280 (June 21, 2024 put option with a strike of $280) pays between $2,105 and $2,530.

Can't be a very great (for a seller) theta on that.

 

[@1RBFjr]

Please let me know when you think we have leveled out and its a good time to jump back in...i am still reading and learning while not in the market at the moment.

I've read many of your posts and I see you (and others close to you) have been burned with downturns. Personally, I plan to keep things for years and years. I don't get concerned about what are hopefully temporary downturns. However I'm not near retirement, so my risk tolerance may be different that yours. Here's some information I found in a google search (and I'm sure you can find contrary info as well): What Is Market Timing?

 

[Thunder Good-Oil]

Can't be a very great (for a seller) theta on that.

I haven’t educated myself on the Greeks yet.

But if the price moves as it should there will be an opportunity to buy and close the contract at a profit well before June of 2024.

 

[Velo Vol]

I haven’t educated myself on the Greeks yet.

But if the price moves as it should there will be an opportunity to buy and close the contract at a profit well before June of 2024.

You already know the concept. The depreciation of the option value (good for sellers) accelerates the closer you are to expiration. Initially it's going to be very slow for a contract that far out.

 

[marcusluvsvols]

I've read many of your posts and I see you (and others close to you) have been burned with downturns. Personally, I plan to keep things for years and years. I don't get concerned about what are hopefully temporary downturns. However I'm not near retirement, so my risk tolerance may be different that yours. Here's some information I found in a google search (and I'm sure you can find contrary info as well): What Is Market Timing?

I got 20 years to live tops, probably a good bit less and it doesnt bother me honestly. I always asked God to please let me get my kids through school to a marketable skill based degree...and He and I both know that is far better than i deserve. I just wanna have a decent chunk to leave my kids in addition to their career if at all possible...and with only a little under 100k in my 401k i really need to at least double that, if not triple it. ...to even make a real impact in their lives with inflation soaring.

I truly believe that there is not a single poster here who would willingly lead me to financial harm. We are a brethren of VOLS after all...and i have a great deal of respect for some posters here, while truly harboring ill will towards none. I am very thankful guys for any articles linked that you feel is sound advice, any and all advice because i know it is well intentioned, and the kindness showed here on VN among us in the PF.

I am just a self educated man with an 11th grade AP education and a GED. When my son got to calculus in HS i had to tell him that I could not teach him something that I myself do not know. I am OK with that. I learn with my kids still all the time ...when i am asked a question and i dont know, i always answer " lets find out together." It has served us all well, and i love nothing more than seeing the fires of curiosity burning behind their eyes. God lit that fire, to be sure, but i have stoked it for 21 years now in my son and 14 in my daughter. I love it .

Anyway, I wrote a novella again but did not intend to. Thanks guys for aiding me in my ignorance on these matters. I feel no shame in asking questions or for advice, feel no apprehension or remorse for kindly answering. Thanks for your time guys.

 

[@1RBFjr]

I got 20 years to live tops, probably a good bit less and it doesnt bother me honestly. I always asked God to please let me get my kids through school to a marketable skill based degree...and He and I both know that is far better than i deserve. I just wanna have a decent chunk to leave my kids in addition to their career if at all possible...and with only a little under 100k in my 401k i really need to at least double that, if not triple it. ...to even make a real impact in their lives with inflation soaring.

I truly believe that there is not a single poster here who would willingly lead me to financial harm. We are a brethren of VOLS after all...and i have a great deal of respect for some posters here, while truly harboring ill will towards none. I am very thankful guys for any articles linked that you feel is sound advice, any and all advice because i know it is well intentioned, and the kindness showed here on VN among us in the PF.

I am just a self educated man with an 11th grade AP education and a GED. When my son got to calculus in HS i had to tell him that I could not teach him something that I myself do not know. I am OK with that. I learn with my kids still all the time ...when i am asked a question and i dont know, i always answer " lets find out together." It has served us all well, and i love nothing more than seeing the fires of curiosity burning behind their eyes. God lit that fire, to be sure, but i have stoked it for 21 years now in my son and 14 in my daughter. I love it .

Anyway, I wrote a novella again but did not intend to. Thanks guys for aiding me in my ignorance on these matters. I feel no shame in asking questions or for advice, feel no apprehension or remorse for kindly answering. Thanks for your time guys.

A great investment is also taking care of yourself (and your kids might like that because you won’t be a burden on them ). It sounds like you’re doing a good job instilling in your kids values important to you. I think parents are always concerned about their kids, no matter their ages, and what the future may or may not hold. There are so many things outside of our control that we can do nothing about.

 

[NorthDallas40]

Q2 GDP final revision out today. Stayed at -0.6%. Yes Virginia there is a recession.

 

[Majors]

It'll have to be a 2009-2011 recovery, those were gains and then some. Sadly like you said, this is not the worst yet. I've always felt for the last few months we were headed closer to 25K than 35K. I don't think we get close to the 25K but we will go lower.

25K not out of the picture it looks like.

 

[VolStrom]

6.7% home mortgage rates, when they were 3.0 a year ago. Yeah, the fed is wanting to do a soft landing. Housing prices are close to crashing and they have made them unaffordable with doubling the interest rate in a year. I have to say I've never seen rate go up this fast on mortgage rates in my lifetime.

 

[hog88]

6.7% home mortgage rates, when they were 3.0 a year ago. Yeah, the fed is wanting to do a soft landing. Housing prices are close to crashing and they have made them unaffordable with doubling the interest rate in a year. I have to say I've never seen rate go up this fast on mortgage rates in my lifetime.

That wasn't a bad rate in 1996 when we bought our first house but of course the house only listed for 120k.

 

[VolStrom]

That wasn't a bad rate in 1996 when we bought our first house but of course the house only listed for 120k.

I bought my first house in the mid 80's and the interest rates were in the mid teens. Now that house prices have doubled in the last few years and don't seem to be coming down, 2x house prices plus 2x mortgage rates will decimate the economy.

 

[hog88]

I bought my first house in the mid 80's and the interest rates were in the mid teens. Now that house prices have doubled in the last few years and don't seem to be coming down, 2x house prices plus 2x mortgage rates will decimate the economy.

I agree. Hard to justify 1/2 to 3/4 of a million dollar house on a 6-7% interest rate.

 

[Ernest T. Vol]

If houses drop 50%, they're still over priced, imop. Throw in a $85K Ford truck....they've never made a truck worth that. Never. All this has to correct more.

 

[hog88]

If houses drop 50%, they're still over priced, imop. Throw in a $85K Ford truck....they've never made a truck worth that. Never. All this has to correct more.

I'm curious to see what Ford tries to sell their new Super Duties for. If they ever open up the order banks that is.

 

[Ernest T. Vol]

I'm curious to see what Ford tries to sell their new Super Duties for. If they ever open up the order banks that is.

Probably priced out of sight at first. Fords are not lamboratis. Ford has to learn the hard way.

 

[Rasputin_Vol]

With regard to the Treasury printing money, providing it to the Fed for management, and the Fed buying T bills and thus giving the money back to the government it’s a Ponzi scheme. I believe I stated that earlier too. But for 12 years it hasn’t resulted in inflation. The only reason I can see that happening is due to the increase in national debt which balances the transaction out. Without that accounting measure there would be a net increase in currency (I think...) as the Fed would literally have created currency and just given it to the government . This is all just a guess on my part but that’s the only thing that makes sense to me

For the very last time... the inflation you are looking for did not show itself on Main Street at the grocery stores or at the gas pump. The inflation showed up largely in the stock market, with other examples showing in college tuitions/student loans and the housing market.

So going back to this conversation from 2020, what we saw from 2008-2020 was inflation in the stock market, housing, tuition/college costs. Now, those sectors are set for a deflationary cycle, while the costs of things we need for daily survival (food and energy) will be experiencing an inflationary cycle.

 

[norrislakevol]

25K not out of the picture it looks like.

I think 20K for the DOW is a possibility. Things could break bad in Europe or China or both within the next few months.

 

[norrislakevol]

If houses drop 50%, they're still over priced, imop. Throw in a $85K Ford truck....they've never made a truck worth that. Never. All this has to correct more.

Pretty sure that Warren Buffets formula indicates that stocks themselves are still 150% over valued right now, even with the market hitting bear territory.

 

[NorthDallas40]

So going back to this conversation from 2020, what we saw from 2008-2020 was inflation in the stock market, housing, tuition/college costs. Now, those sectors are set for a deflationary cycle, while the costs of things we need for daily survival (food and energy) will be experiencing an inflationary cycle.

If you say so.

 

[Majors]

I think 20K for the DOW is a possibility. Things could break bad in Europe or China or both within the next few months.

All on the table, if we get that low it’ll be a hard recovery. Massive layoffs

 

[Orangeburst]

I anecdotally saw some calm waves in inflation last few months..but hit with a 7% price increase this week on another product line.