Quote: (12-27-2013 07:21 PM)thedude3737 Wrote:  

Quote: (12-27-2013 05:54 PM)DVY Wrote:  

At the risk of sounding retarded, I buy shit that I see a lot of young people using in large quantities. I told my dad to buy Chipotle back when it just split for MCD. I saw how bonkers HS kids would go for it.

Monitor what the adoloscents/early adults use because very often they are early adopters.

There's nothing wrong with common sense logic but it's important to evaluate how a company operates. Anyone can look at Store X and see the line out the door and think, "Hmmm, time to buy in." It's important to build a complete picture of the company before buying in; looking at their balance sheet, what % of shares are owned by the board, acquisition history, EPS history, etc. Not just a matter of capital coming in but how the company manages it.

Many famous investors/fund managers have echoed these thoughts, that they were inspired by something a family member saw at the mall for example, and decided to dig a little deeper.

The flip side of this approach doesn't get as much attention, but it can often be easier for the common person to spot when a trend/business model is dying, rather than identifying new growth areas.

A good example of this was Blockbuster.

How many of you started downloading films, getting copies burned from friends, etc. but still saw lots of stores around the city and wondered "Wow, I can't remember the last time myself or friends rented a movie."

Quote: (12-31-2013 01:36 AM)JayJuanGee Wrote:  

Accordingly, there has been an expansion in stock prices during 2013 - however, other aspects of the economy have NOT been in an expansion mode. Job losses have more or less stabilized, and any return of jobs, have been jobs that pay half the amount that they had paid in 2007... that is NOT really any kind of meaningful expansion b/c previous expansions had seen increases in wages rather than decreases in wages.

Personally, I see this as a bad thing and more proof that the economy has not recovered much at all. It's just liquidity trying to find a home. I'm not saying its a bubble now but we might be in the beginning stages of a major stock market bubble.

I didn't quote you on the banks holding up all the liquidity but I wanted to comment on that. What do you see happening if banks start lending it out and the velocity of money goes up?

Quote: (12-31-2013 02:45 PM)Jaydublin Wrote:  

Quote: (12-31-2013 01:36 AM)JayJuanGee Wrote:  

Accordingly, there has been an expansion in stock prices during 2013 - however, other aspects of the economy have NOT been in an expansion mode. Job losses have more or less stabilized, and any return of jobs, have been jobs that pay half the amount that they had paid in 2007... that is NOT really any kind of meaningful expansion b/c previous expansions had seen increases in wages rather than decreases in wages.

Personally, I see this as a bad thing and more proof that the economy has not recovered much at all. It's just liquidity trying to find a home. I'm not saying its a bubble now but we might be in the beginning stages of a major stock market bubble.

I didn't quote you on the banks holding up all the liquidity but I wanted to comment on that. What do you see happening if banks start lending it out and the velocity of money goes up?

Jay Dub:

It seems that we kind of agree about the lack of a meaningful recovery.

I do NOT really know much about any of this kind of macro economics, as I already mentioned. Based on my observations (which may or may NOT be accurate), I am just questioning the concept that we have been through some kind of meaningful expansion that signifies that another recession is coming. You know the expression that history does NOT exactly repeat itself but it rhymes - meaning that any kind of repetition that does take place in history will NOT be a mirror image of a previous situation b/c the new situation plays out differently from the old scenario especially when we get into the details.

Surely, many of us in this forum and in several of the threads are coming to the realization that there has been a LOT of money being printed and doled out - and there is somewhat of a mystery to where all that money is going. To me it seems to be going to the fat cat banks who are NOT lending it out (it is NOT going to social and liberal causes, as some people seem to suggest). In my thinking likely the situation would have been much more stable had those banks been forced to lend out the money as they were receiving it and so the more that time passes, the more that all of the outstanding piles of money seems to present a considerable form of instability. We seem to kind of agree about that instability aspect of the outstanding money.

Who the fuck knows what those fat cats are going to do with all that money or whether they have been dolling it out in China? I do NOT know if there has been enough transparency to know if that money is just sitting or if it is working in some kind of way. Maybe someone here can explain that part?

So, if we are talking about all the money coming back into the system, all at once, then we are talking in the hypothetical to say that all of a sudden the money is going to be pour into the economy. If it is true that they are just sitting on these various piles of cash reserves, then the private sector fat cats hold a certain amount of power to have that much money and to be able to play those kinds of cards which could have a considerable effect on the value of the dollar and both public and international confidence in the dollar.

So, in this thread, if we are trying to anticipate where we want to put our money, that may mean diversifying out of the dollar to some extent b/c we do NOT really know how all that outstanding money is going to play out, but we know that it could be a factor that would affect various stocks and investments differently than others - possibly depending upon how well diversified the underlying fundamentals of any particular company or stock is and if they become a beneficiary of such doled out future money.

I still cannot understand how, even you, Jay_Dub, are suggesting that the stock market in itself is currently in some kind of bubble. When we look at the stock market as a whole since 2007 (let's just say the Dow Jones Industrial Average), the totality of that index is only up 18% from October 2007 (from 14,000 to 16,550). I understand that all of the gain from the October 2007 price only came during 2013; however, if you annualized the gain for those 6 years, then there is about a 3% per year return - hardly a bubble in my thinking... and ultimately is much below the average return rate over the past 100 years (like 10%) but WTF do I know? Are you asserting a stock market bubble based on what? that it went up 18% in 2013?

I value these kinds of threads b/c I can see how other guys are considering these "bubble" questions and how macro dynamics can affect values, and maybe how that would play out differently, depending on the sector.

Quote: (12-31-2013 03:56 PM)JayJuanGee Wrote:  

I still cannot understand how, even you, Jay_Dub, are suggesting that the stock market in itself is currently in some kind of bubble. When we look at the stock market as a whole since 2007 (let's just say the Dow Jones Industrial Average), the totality of that index is only up 18% from October 2007 (from 14,000 to 16,550). I understand that all of the gain from the October 2007 price only came during 2013; however, if you annualized the gain for those 6 years, then there is about a 3% per year return - hardly a bubble in my thinking... and ultimately is much below the average return rate over the past 100 years (like 10%) but WTF do I know? Are you asserting a stock market bubble based on what? that it went up 18% in 2013?

First off I did not say it was a bubble, My exact words were "I'm not saying its a bubble now but we might be in the beginning stages of a major stock market bubble." You need to stop putting words in peoples mouths as you are really bad about that. I've had to call you out on it a couple times and I've noticed a couple other people have to bring it up as well.

Now to the point. We need to ask why 2007 is our reference point? You make it sound as if we are sure it was fair value then. Why cherry pick that date and what makes us think 14k DJIA in 2007 is a good reference point? That was the peak right before one of the biggest recessions/crashes in 100 years. Or we could spin it the other way cherry pick the S&P from spring 2009? It has tripled since that period.

Think of how crazy it is to have 2 dates roughly 15 months apart. If we use 1 then the S&P would be up ~15-20% in 6 years... choose the other and it is up nearly 200% in under 5 years. How can we pick one of those dates and say it is or isn't a bubble based on that? Seems ridiculous to me. You see when you cherry pick dates you can spin economic data pretty much anyway that you want, never forget that.

Its hard to go off any of these prices anyway because the government became so involved, nothing was able to really correct itself. We don't know that the DJIA wouldn't have fallen to 3-5k without them, or that it would even be above 10k today without all the stimulus. We really do not know the answers to any of this. All we really know is that their policies and printing of money has had a major affect on the stock market in recent years and less affect on main street.

Quote: (12-31-2013 03:56 PM)JayJuanGee Wrote:  

Based on my observations (which may or may NOT be accurate), I am just questioning the concept that we have been through some kind of meaningful expansion that signifies that another recession is coming.

Who really says we ever recovered from the last recession? Because we printed up trillions of dollars and tossed it at the economy? Which gave us enough GDP "growth" to be out of recession by definition I guess. But are we really out? IMO No! And that is why on main street life is not any better, as you pointed out earlier in this thread. The average guy is still struggling.

Also, I'm not sure how we can assume we came out of the recession with more problems than we went in with. This is all nonsense. You don't come out of recession with 50% more debt than you went in with. The next recession(or continuation of this recession IMO) will be for the same reasons we went into recession last time. We don't need an economic expansion because we already had it and it has not been corrected. The only reason we are even holding on is because of the money printing/interest rate suppression. Tell me how we are out of it when the entire economy is on life support(QE). Let those interest rates hit 5%+ and we will all see just how rosy things are.

Quote: (12-31-2013 06:55 PM)Jaydublin Wrote:  

Quote: (12-31-2013 03:56 PM)JayJuanGee Wrote:  

I still cannot understand how, even you, Jay_Dub, are suggesting that the stock market in itself is currently in some kind of bubble. When we look at the stock market as a whole since 2007 (let's just say the Dow Jones Industrial Average), the totality of that index is only up 18% from October 2007 (from 14,000 to 16,550). I understand that all of the gain from the October 2007 price only came during 2013; however, if you annualized the gain for those 6 years, then there is about a 3% per year return - hardly a bubble in my thinking... and ultimately is much below the average return rate over the past 100 years (like 10%) but WTF do I know? Are you asserting a stock market bubble based on what? that it went up 18% in 2013?

First off I did not say it was a bubble, My exact words were "I'm not saying its a bubble now but we might be in the beginning stages of a major stock market bubble." You need to stop putting words in peoples mouths as you are really bad about that. I've had to call you out on it a couple times and I've noticed a couple other people have to bring it up as well.

Jay_Dub:
You seem to have this tendency to attempt create issues out of NON-issues, and I do NOT know if you are just trying to deviate from the topic of this thread or what? NO ONE is purposefully attempting to blemish your name, your character or even to put words in your mouth (at least I am NOT) and you seem to be draggin politics into this thread. If there is some kind of nuance that is missing in my post that are framing the issue(s) from my perspective, then please and by all means feel free to correct it or to reframe it with your own words without trying to stop discussion with your personal attacks towards me.

Further, I do NOT claim to speak for you, and by NO means am I ACTING in bad faith in my description / framing of issues that I deem relevant to make my points. In this regard, you seem to be perfectly capable of speaking for yourself, and I have NO problem with that and I feel no need to attempt to speak for you. In other words, I had NO intention to misquote you in the event that misquoting you had ACTUALLY taken place as you seem to suggest. And, even if I had misquoted you in some material way, I did NOT carry out such misquoting on purpose or as a means to put words in your mouth. You are free and seem capable to accomplish that yourself.

Lastly, your reference to supposed other instance in which either you or some other RVF member has corrected me seems only to serve as a form of unnecessary personal attack, because readers of this thread may NOT know what the heck you are referring to. I barely recognize your reference, except for the fact that publicly you had made a similar accusation to me in order to seemingly personally attack and distract in some other thread(s) and I had to write a response(s) similar to this one. Personally, I have better things to do than to attempt to keep some kind of tally about this kind of history, so it seems quite the distraction for you to drag in some kind of history that is NOT even relevant to the topic of THIS THREAD.

Quote: (12-31-2013 06:55 PM)Jaydublin Wrote:  

Now to the point. We need to ask why 2007 is our reference point? You make it sound as if we are sure it was fair value then. Why cherry pick that date and what makes us think 14k DJIA in 2007 is a good reference point? That was the peak right before one of the biggest recessions/crashes in 100 years. Or we could spin it the other way cherry pick the S&P from spring 2009? It has tripled since that period.

Think of how crazy it is to have 2 dates roughly 15 months apart. If we use 1 then the S&P would be up ~15-20% in 6 years... choose the other and it is up nearly 200% in under 5 years. How can we pick one of those dates and say it is or isn't a bubble based on that? Seems ridiculous to me. You see when you cherry pick dates you can spin economic data pretty much anyway that you want, never forget that.

Again, why does it seem as if YOU are trying to make my point(s) into an argument about some policy direction. I am NOT arguing about anything. I am NOT proposing a policy or complaining. I am attempting to be descriptive rather than prescriptive in my presentation. Additionally, If you may recall, I was attempting to get some kind of answers to my question about why other RVF members, specifically Flavius Aetius, considered the current state of affairs to be an economic expansion .

As you seem to recognize, I picked October 2007 as a recent high point of the stock market to show how far the stock market has come up from that point. October 2007 is NOT random or cherry picked because I could care less about the politics, I was merely attempting to get a better understanding of the concept of economic expansion.

Surely, you make a good point to suggest that in October 2007, the stock market may have been artificially inflated already, and that is NOT an explanation for which I had accounted in my earlier framing of the question. So that’s a good point.

On the other hand, your point about the possibility of choosing spring of 2009 as a reference point for the economy seems ridiculously artificial to me and out of line and out of context because it was more or less the down point of that particular crash period – which in my thinking seems to be an illogical reference point that you are using only for the purpose of arguing and distracting from any kind of meaningful discussion. You are trying to make my point seem illogical by bringing up some other even more ridiculous logic, which seems to be merely for the purpose of arguing.

Again, I do concede that you make a good point about potentially that October 2007 was artificially inflated.

Quote: (12-31-2013 06:55 PM)Jaydublin Wrote:  

Its hard to go off any of these prices anyway because the government became so involved, nothing was able to really correct itself. We don't know that the DJIA wouldn't have fallen to 3-5k without them, or that it would even be above 10k today without all the stimulus. We really do not know the answers to any of this. All we really know is that their policies and printing of money has had a major affect on the stock market in recent years and less affect on main street.

O.K. For the purposes of this thread, it seems that we sufficiently agree here that there is some artificial pumping of the market that may be going on and that groups of people are affected in different ways by that pumping.

Quote: (12-31-2013 06:55 PM)Jaydublin Wrote:  

Quote: (12-31-2013 03:56 PM)JayJuanGee Wrote:  

Based on my observations (which may or may NOT be accurate), I am just questioning the concept that we have been through some kind of meaningful expansion that signifies that another recession is coming.

Who really says we ever recovered from the last recession? Because we printed up trillions of dollars and tossed it at the economy? Which gave us enough GDP "growth" to be out of recession by definition I guess. But are we really out? IMO No! And that is why on main street life is not any better, as you pointed out earlier in this thread. The average guy is still struggling.

You seem to be arguing about something upon which we agree, that in essence, we may NOT be completely out of a recession, and I share that viewpoint. And, even if we do NOT agree exactly, I do NOT see a purpose in making these points into an argument because here, for the purposes of this thread it seems that we are merely trying to predict which way aspects of the stock market is going to go.

Quote: (12-31-2013 06:55 PM)Jaydublin Wrote:  

Also, I'm not sure how we can assume we came out of the recession with more problems than we went in with. This is all nonsense. You don't come out of recession with 50% more debt than you went in with. The next recession(or continuation of this recession IMO) will be for the same reasons we went into recession last time. We don't need an economic expansion because we already had it and it has not been corrected. The only reason we are even holding on is because of the money printing/interest rate suppression. Tell me how we are out of it when the entire economy is on life support(QE). Let those interest rates hit 5%+ and we will all see just how rosy things are.

Again, you seem to be arguing about something upon which we sufficiently agree, for the most part, that we may NOT completely be out of this particular recession – though of course, others may have a different opinions about whether we are out of a recession or in a recession.
Also, you seem to be getting into the territory of propagating future policy which seems to be much beyond this thread. Aren’t we here, in this thread, just trying to figure out where to invest in 2014 rather than propagating govt or financial policy in one direction or another? So, in that regard, I am still thinking that generally the stock market is going to be bullish in the next couple of years, in spite of these potential major instabilities that seem to underly the whole house of cards.

Quote: (12-31-2013 10:05 PM)JayJuanGee Wrote:  

[
Jay_Dub:
You seem to have this tendency to attempt create issues out of NON-issues, and I do NOT know if you are just trying to deviate from the topic of this thread or what?

Jay, this seems to be common with you. When others respond to what you post you shrug it off as if they/we are making NON-issues.

If you want others to engage you in discussions, this is not the way to encourage that behavior. Instead, you will get more and more guys ignoring you.

hypothesis:

volatility is low, market is over valued, P/E's out of wack, share buy backs propping up prices, yen carry trade pushing assets, fed QE pushing economy, nothing real moving economy.

play:

i want to play long vol, short the market

question:

best way to do this with the understanding that the market can be irrational longer than i can be solvent

one thought I had was out of the money long dated puts on DIA or SPY. but I can't get expiration dates later than dec '14 / jan '15 through etrade.

any ideas?

^ you should be able to pickup 2016 options now. I have 2016 calls in my account right now. I would call them up if it is not registering on your account. Good luck!

@reaper23,

I see. You want to do a contrarian play. Reminds me of michael steindhart variant perception approach.

You want to go long volatility and short the market? Try the VIX. I briefly mentioned it here.

Quote: (12-25-2013 06:04 PM)Nemencine Wrote:  

..... Speaking of volatility, maybe somebody will come up with VIX for bitcoin.....

There are a bunch of VIX based ETFs and ETNs that you can use to play long volatility and short the market. Below should be a list:

BNPV - BNP Paribas Enhanced Volatility Fund
IVOP - iPath Inverse S&P 500 VIX Short-Term Futures ETN
SVXY - ProShares Short VIX Short-Term Futures ETF
TVIX - VelocityShares Daily 2x VIX Short Term ETN
TVIZ - VelocityShares Daily 2x VIX Mid Term ETN
UVXY - ProShares Ultra VIX Short-Term Futures ETF
VIIX - VelocityShares VIX Short Term ETN
VIIZ - VelocityShares VIX Mid Term ETN
VIXM - ProShares VIX Mid-Term Futures ETF
VIXX - Jefferies S&P 500 VIX Short-Term Futures ETF
VIXY - ProShares VIX Short-Term Futures ETF
VXX - iPath S&P 500 VIX Short-Term Futures ETN
VXZ - iPath S&P 500 VIX Mid-Term Futures ETN
VZZB - iPath Long Enhanced S&P 500 VIX Mid-Term Futures ETN
XIV - VelocityShares Daily Inverse VIX Short Term ETN
XXV - Barclays ETN+ Inverse S&P 500 VIX Short-Term Futures ETN
XVIX - UBS E-TRACS Daily Long-Short VIX ETN
XVZ - S&P 500 Dynamic VIX ETN
ZIV - VelocityShares Daily Inverse VIX Mid Term ETN
CVOL - C-Tracks Citi Volatility Index Total Return ETN

Mix match them the way you like... and add options to them or whatever you want to do.

best of luck to all of us in 2014,

regards,

Nemencine

Quote: (01-01-2014 09:51 AM)reaper23 Wrote:  

hypothesis:

volatility is low, market is over valued, P/E's out of wack, share buy backs propping up prices, yen carry trade pushing assets, fed QE pushing economy, nothing real moving economy.

play:

i want to play long vol, short the market

question:

best way to do this with the understanding that the market can be irrational longer than i can be solvent

one thought I had was out of the money long dated puts on DIA or SPY. but I can't get expiration dates later than dec '14 / jan '15 through etrade.

any ideas?

is the market really that overvalued? Companies are posting record profits and it's sustainable given the supressed level of private consumption. I don't know how investment is doing these days.

Unless you expect consumption to fall further?

I've had a good year so I'm pulling a portion out and doing something conservative. I'm paying off the mortgage on my second rental property that's currently 6%. Bond returns and savings returns are shit so I think this gives me a good safe conservative 6% return. I'm gonna use the extra cash flow to aggressively pay off my 1st investment property.

I think if anyone has a mortgage rate of 5% it's not a bad idea in this climate. The market is really anyone's guess for 2014 and stocks aren't really cheap. If the rally continues I'll eat my words but I still am holding a portion of stocks long term of course.

Quote: (12-30-2013 10:59 PM)Flavius Aetius Wrote:  

.... If you are buying stock--any stock for that matter you would be wise to acknowledge that you are not buying a cheap market. .....

Quote: (12-31-2013 01:36 AM)JayJuanGee Wrote:  

....
In my thinking, we live in strange economic times b/c if a guy uses the stock market as a measure, there is NO real expansion b/c the stock market is barely up from its October 2007 level.

Quote: (01-01-2014 09:51 AM)reaper23 Wrote:  

....., market is over valued, P/E's out of wack, ....

Quote: (01-01-2014 02:54 PM)ElJefe Wrote:  

is the market really that overvalued? Companies are posting record profits and it's sustainable given the supressed level of private consumption....

Personally, i like to avoid getting mired in back and forth liberal vs conservative economic/finance discussion.(i have seen a couple of that on this thread already... )

To the question:

Is the market overvalued or undervalued?

Does it really matter in this age of seemingly endless QE? To quote Jesse Livermore "the market is never too high to keep buying...or too low to keep selling..." This is part of the reason why i like trend trading approach.

Undoubtedly, FED interventions(QE this or that) creates an irrationality that persists longer than anybody can remain solvent. the hard lessons of julian robertson shorting the technology craze in 1998 is hard reminder of betting against an irrational market. Of course, there is the Banks still sitting on money(which will affect the velocity of money when the Banks changes their mind). To get an idea, here is article by TD ameritrade on Feds QE exit/Velocity of Money..

Quote: (07-29-2013 09:24 PM)Nemencine Wrote:  

....
For those interested...TD AMERITRADE BANK has a solid analysis of the federal reserve exit strategies. ....

Personally, i find it difficult to get a clear macro picture. In the meantime, i trade the trend.

I think 2014 will be bullish but certainly not in the way that 2013 is. There will be some profit taking. Will i shift into a shorting mode later? If and only if after i have seen a few indicators(across the board, structural deterioration in the indices... Look at all the market tops dating to the 1800s, they exhibited these characterisitics...) You can read more about this in william's O neal's IBD or any of his work on spotting market tops and bottoms. Until then, i will trade the trend. I have no strong desire in nailing the top... if the market is going to fall, it has a long way to fall.. i will wait for a clear signal... in the meantime, i will trade the trend. In this case: the uptrend.

Anyways, i have attached a chart of the S/P 500 below to give a visual. Draw your own conclusions.

In the chart below, you can see the 2007 peak and how it matches with the 2000 peak.(you can see the current market levels in relations to that... of course, we can all calculate the P/Es... )

You can also see how fast and how much the stock market has risen since the bottom at 2009 -- a bottom that matches with the bottom at 2003(give or take.).

Quote: (01-01-2014 02:54 PM)ElJefe Wrote:  

is the market really that overvalued? Companies are posting record profits and it's sustainable given the supressed level of private consumption. I don't know how investment is doing these days.

Unless you expect consumption to fall further?

its my understanding that market P/E's are substantially above historic norms, though certainly not as high as they have been in the past.

it is also my understanding that corporate balance sheets continue to grow cash which to me is a bearish signal. either they are worried about drying up roll over debt and/or they have nothing better to do with it than sit on it.

QE is bound to stop at some point.

the fact that it hasn't even though corporate cash continues to grow means to me that the real economy isn't where the fed wants it to be.

i think that some of this share price growth is getting ahead of itself.

i used to work for a hedge fund back in 2000-2002 but i've been out of the game for a long time.

i'm probably 100% wrong on everything i'm thinking

^ http://www.multpl.com if you want a quick glance at the p/e

Quote: (01-01-2014 06:37 PM)WestCoast Wrote:  

^ http://www.multpl.com if you want a quick glance at the p/e

thanks. the PE10 ratio is the one I was looking at.

http://www.multpl.com/shiller-pe/

Thats a pretty good indicator to me.

Vol being so low....multiples being so high...

seems like market complacency is creating an opportunity.

Quote: (01-01-2014 02:48 PM)Nemencine Wrote:  

@reaper23,

I see. You want to do a contrarian play. Reminds me of michael steindhart variant perception approach.

You want to go long volatility and short the market? Try the VIX. I briefly mentioned it here.

Quote: (12-25-2013 06:04 PM)Nemencine Wrote:  

..... Speaking of volatility, maybe somebody will come up with VIX for bitcoin.....

There are a bunch of VIX based ETFs and ETNs that you can use to play long volatility and short the market. Below should be a list:

BNPV - BNP Paribas Enhanced Volatility Fund
IVOP - iPath Inverse S&P 500 VIX Short-Term Futures ETN
SVXY - ProShares Short VIX Short-Term Futures ETF
TVIX - VelocityShares Daily 2x VIX Short Term ETN
TVIZ - VelocityShares Daily 2x VIX Mid Term ETN
UVXY - ProShares Ultra VIX Short-Term Futures ETF
VIIX - VelocityShares VIX Short Term ETN
VIIZ - VelocityShares VIX Mid Term ETN
VIXM - ProShares VIX Mid-Term Futures ETF
VIXX - Jefferies S&P 500 VIX Short-Term Futures ETF
VIXY - ProShares VIX Short-Term Futures ETF
VXX - iPath S&P 500 VIX Short-Term Futures ETN
VXZ - iPath S&P 500 VIX Mid-Term Futures ETN
VZZB - iPath Long Enhanced S&P 500 VIX Mid-Term Futures ETN
XIV - VelocityShares Daily Inverse VIX Short Term ETN
XXV - Barclays ETN+ Inverse S&P 500 VIX Short-Term Futures ETN
XVIX - UBS E-TRACS Daily Long-Short VIX ETN
XVZ - S&P 500 Dynamic VIX ETN
ZIV - VelocityShares Daily Inverse VIX Mid Term ETN
CVOL - C-Tracks Citi Volatility Index Total Return ETN

Mix match them the way you like... and add options to them or whatever you want to do.

best of luck to all of us in 2014,

regards,

Nemencine

Quote: (01-01-2014 09:51 AM)reaper23 Wrote:  

hypothesis:

volatility is low, market is over valued, P/E's out of wack, share buy backs propping up prices, yen carry trade pushing assets, fed QE pushing economy, nothing real moving economy.

play:

i want to play long vol, short the market

question:

best way to do this with the understanding that the market can be irrational longer than i can be solvent

one thought I had was out of the money long dated puts on DIA or SPY. but I can't get expiration dates later than dec '14 / jan '15 through etrade.

any ideas?

thanks. definitely familiar with the and its pricing impact on options. Which is one reason right now why I thought buying puts would both expose me to vol and give me the shorting feature at the same time.

time decay is a bitch though

i'll check out some of those etfs you suggested.

thanks

Quote: (01-01-2014 03:51 PM)Nemencine Wrote:  

Personally, i find it difficult to get a clear macro picture.

An alternative is to find the innovative companies whose sales and profits are rising despite the macro picture.

For example, the "internet of things" or machine-to-machine communications (M2M) will be a huge growth opportunity for the next 5 years

Sierra Wireless is a pure play on M2M and has a third of the global market. It is not reliant on QE for success.

Its stock price increased 200% in 2013 :

http://finance.yahoo.com/echarts?s=SWIR+...R;range=1y

If you're bearish, you can also go long in companies that sell inferior goods (goods for which you increase consumption should income fall).

I guess Walmart and H&M would be good examples.

Quote: (01-01-2014 08:20 PM)reaper23 Wrote:  

Quote: (01-01-2014 02:48 PM)Nemencine Wrote:  

@reaper23,

I see. You want to do a contrarian play. Reminds me of michael steindhart variant perception approach.

You want to go long volatility and short the market? Try the VIX. I briefly mentioned it here.

Quote: (12-25-2013 06:04 PM)Nemencine Wrote:  

..... Speaking of volatility, maybe somebody will come up with VIX for bitcoin.....

There are a bunch of VIX based ETFs and ETNs that you can use to play long volatility and short the market. Below should be a list:

BNPV - BNP Paribas Enhanced Volatility Fund
IVOP - iPath Inverse S&P 500 VIX Short-Term Futures ETN
SVXY - ProShares Short VIX Short-Term Futures ETF
TVIX - VelocityShares Daily 2x VIX Short Term ETN
TVIZ - VelocityShares Daily 2x VIX Mid Term ETN
UVXY - ProShares Ultra VIX Short-Term Futures ETF
VIIX - VelocityShares VIX Short Term ETN
VIIZ - VelocityShares VIX Mid Term ETN
VIXM - ProShares VIX Mid-Term Futures ETF
VIXX - Jefferies S&P 500 VIX Short-Term Futures ETF
VIXY - ProShares VIX Short-Term Futures ETF
VXX - iPath S&P 500 VIX Short-Term Futures ETN
VXZ - iPath S&P 500 VIX Mid-Term Futures ETN
VZZB - iPath Long Enhanced S&P 500 VIX Mid-Term Futures ETN
XIV - VelocityShares Daily Inverse VIX Short Term ETN
XXV - Barclays ETN+ Inverse S&P 500 VIX Short-Term Futures ETN
XVIX - UBS E-TRACS Daily Long-Short VIX ETN
XVZ - S&P 500 Dynamic VIX ETN
ZIV - VelocityShares Daily Inverse VIX Mid Term ETN
CVOL - C-Tracks Citi Volatility Index Total Return ETN

Mix match them the way you like... and add options to them or whatever you want to do.

best of luck to all of us in 2014,

regards,

Nemencine

Quote: (01-01-2014 09:51 AM)reaper23 Wrote:  

hypothesis:

volatility is low, market is over valued, P/E's out of wack, share buy backs propping up prices, yen carry trade pushing assets, fed QE pushing economy, nothing real moving economy.

play:

i want to play long vol, short the market

question:

best way to do this with the understanding that the market can be irrational longer than i can be solvent

one thought I had was out of the money long dated puts on DIA or SPY. but I can't get expiration dates later than dec '14 / jan '15 through etrade.

any ideas?

thanks. definitely familiar with the and its pricing impact on options. Which is one reason right now why I thought buying puts would both expose me to vol and give me the shorting feature at the same time.

time decay is a bitch though

i'll check out some of those etfs you suggested.

thanks

Just an FYI, be careful of these "Daily" ETF's. They have to re-balance every day and lose a bit of their value. Part of it is due to contagion, but most of it has to do with how the investment is structured. Typically you shouldn't long them.

If you go up 3% one day and down 3% the next day, you won't be at even. You'll be down. Always read the prospectus with odd ETF's like this.

I have a good feeling for Spanish stocks this year. Telefonica for example is paying a very good dividend (above 6%) and offers good prospect. The banking sector also appears stronger, BBVA more than Santander. Iberdrola is also paying good dividend.
I bought also some Jazztel with 10Eur objective.

I kept my open position of Credit Agricole I bought at 3.90 Eur (that I asked in another post), it's currently at 10.40 so nice profit so far and more to come.

Regarding bonds, since the credit spread has dropped below 200bps in Spain, the yields are not so attractive. I may try to look at stuff in Portugal, a country which is doing well and should achieve its fiscal targets of 5.5% of GDP in 2013 and approach its 4% target this year.

Quote: (01-17-2014 05:58 AM)julio26 Wrote:  

I have a good feeling for Spanish stocks this year. Telefonica for example is paying a very good dividend (above 6%) and offers good prospect. The banking sector also appears stronger, BBVA more than Santander. Iberdrola is also paying good dividend.
I bought also some Jazztel with 10Eur objective.

I kept my open position of Credit Agricole I bought at 3.90 Eur (that I asked in another post), it's currently at 10.40 so nice profit so far and more to come.

Regarding bonds, since the credit spread has dropped below 200bps in Spain, the yields are not so attractive. I may try to look at stuff in Portugal, a country which is doing well and should achieve its fiscal targets of 5.5% of GDP in 2013 and approach its 4% target this year.

How do you trade stocks on another market? Can you do it through an american broker like Schwab or do you have a special account? I wanted to pick up a british stock (BLND when it was at 550) one time but Schwab wouldn't let me.

Isn't Spain still as fragile as Greece right now? I think I'm going to try and stay out of Greece, Spain and China for now.

Quote: (01-17-2014 11:45 AM)Richiavelli Wrote:  

How do you trade stocks on another market? Can you do it through an american broker like Schwab or do you have a special account? I wanted to pick up a british stock (BLND when it was at 550) one time but Schwab wouldn't let me.

Isn't Spain still as fragile as Greece right now? I think I'm going to try and stay out of Greece, Spain and China for now.

Richiavelli, I'm based in Spain so I trade directly from here.

But I guess you won't have problems to buy stocks like Telefonica, Iberdrola or Repsol as they are in the EuroStoxx 50.

Regarding Spain being as weak as Greece, of course not. The Spanish economy is not as bad as it was 2-3 years ago. They have passed important reforms and are in line with the objectives given by Brussels. Their banking sector is also in much better shape.
The only problem is the unemployment but the real estate should pick up soon from the lows registered last year.

If you look at the 10y CDS of Spain against Italy you will see that Spain is actually trading at 195-200bps, roughly 10bp lower than Italy. I think the max was above I think if you go with the periphery, Spain is a good bet. And look at how the Ibex raised since the beginning of 2014.

Of course everything is subject to what's going to happen in America (Tappering) and in Europe (debt levels/deflation threats) and you have to be ready to exit quickly

I think a double dip recession is in the wake. Not sure when but its coming. The gov't is going to have to get use to the new unemployment rate being the NEW norm.
That being said....interest rate s are going to have to rise at one point. They are artificially keeping them low(cds suck and banks don't want to take risks for very little either) and that's propping up the stock bubble we now have. With a reduction of QE and higher interest rates on the horizon, although done slowly, folks who parked money in the market to escape 0% rates will flee. That's going to lower the Dow considerably.
I think its good to park capital safely and buy back in at low prices after the fall.
Keep away from Bonds.

Just sayin'.......

my 2014 advice : i'd get rid of some USD's, if that's all you hold. Other currencies, commodities, bitcoins, whatever.

#Bernanke