[WestCoast]

This is a semi intro about me, I've been working on the Street for a while and here are some options for everyone. Feel free to ask questions

Order of post:
1. Advice for everyone
2. Advice for well off peeps
3. Advice for people with high risk tolerance


1. First NEVER take advice from sell side research such as Jim Cramer or xyz dude from JP Morgan. Unless you work with them you will never know if they are conflicted. I don't even want to know who believed a buy rating on RIMM selling a shit stock to a dumbass.

If you really believe America is F'd. Move your cash to a different currency and trade in that fashion. Ex: want to retire in Poland your capital should be in euros since it is converting soon. If you want to invest in the US and want 0 risk, buy TIPS basically your return is inflation, and the govnt always overstates the number.

Unless u are dead broke, get a rewards card. You can open and shut cards and not F up your credit. Because your score is based on the last 60 items I ur record that are not delinquencies. So you can soft pull your credit (means just checking it on a site like free credit report, 60 times) costs you $60 and you just got 40K miles times 3. I do warn this is better for middle income US people as the rules are slowly changing.

Finally, another good thing for everyone. Get 10K in your 401K, you can pull this amount to buy real estate without a withdrawal penalty. So no downside here free money from your company match also.

2. People with cash, get an account at lending club ASAP. Run some capital theology there becuse it compounds monthly. Before that company gets huge and spreads get shitty u should be rolling thru it and getting a good return.

Get your money in multiple currencies because owning something like gold can fuck you over if the paper you have is defunct based on the bank issuing it. I don't know what country I will like best, but I run mine through 4 currencies for countries I like.

3. Black market cash is by far the most lucrative investment. For example in Venezuela it is pegged at 4, but the black market is 8. Clearly dangerous as fuck but my visit to Caracas Was profitable because of this, bring down 5K and you can do a vacation for 2 weeks for free!

Sorry but I won't be putting my name on this site because I would get fired for sure. I trust roost won't be giving away my email address, but feel free to ask any financial questions I won't be dolling out bullshit on here.

[scotian]

I'm not much of an investor (although I should be studying finances more) but your #3 suggestion about Caracas caught my eye "...Clearly dangerous as fuck but my visit to Caracas Was profitable because of this, bring down 5K and you can do a vacation for 2 weeks for free!"

Can you write up a data sheet on Caracas? Its known to be one the the world's most dangerous cities, how did you find it?

[WestCoast]

Sure I can write one up when I eventually get in front of a computer I am literally day gaming and writing this response, but want to keep this thread pc used on finances so I don't throw up a random Caracas sheet

[MikeCF]

If you're 30 years old, liquid one million, no kids or spouses....What would you do?

[CGS]

(03-03-2012 07:26 PM)MikeCF Wrote:  

If you're 30 years old, liquid one million, no kids or spouses....What would you do?

That makes you an accreditted investor, the world is your oyster. How much finance knowledge do you have? I would say find a hedge fund that you can drop some of that into.

[phoenix101]

(03-03-2012 08:18 PM)CGS Wrote:  

(03-03-2012 07:26 PM)MikeCF Wrote:  

If you're 30 years old, liquid one million, no kids or spouses....What would you do?

That makes you an accreditted investor, the world is your oyster. How much finance knowledge do you have? I would say find a hedge fund that you can drop some of that into.

Hedge funds aren't a guaranteed way to make money. Many lose money. Many blowup, implode, or shut down. And on average they take 20% of profits and 2% management fee. Liky mutual or other funds, will have other normal expenses that can match or exceed the management fee. Many even if in a loss position will still restart taking 20% of profits after 2 or 3 years.

[WestCoast]

@ MikeCF. If you are already that liquid and green and have 0 financial knowledge I would advise you to run a portfolio as such.

20% Cash position in multiple currencies
30% peer lending on aforementioned website (http://www.lendingclub.com). The reason i push that site so much is because you're basically acting as a bank lending to individuals. This means rates and returns on that are gonna get squeezed over time so i would rather have capital in there before it starts getting lower. No I do not work for them.

This last part will piss off the world is ending type people, but currently as of today I would use the other 50% as 40% stocks and 10% bonds. The reason is long term bonds have gotten expensive in my view, the returns are less than 2% for a 10yr bond so being heavy in here means u are losing money... I really dont know why anyone would ever bu them at this point.

In terms of specific stocks, unfortunately i am not going to straight give names because that might give away who i am but I can give you some ideas to help you out.

1. Say you believe in real estate... Only the clinically insane believe the only way to profit is to buy a home. You can basically buy into sets of mortgages yourself example: ticker REM.
2. Say you believe the "social networking story" and when Facebook goes public around may you believe tech will do well. Then you buy up the NASDAQ at the minimum because its 90% tech companies. There are also multiple companies with private positions in the stock already. Just google Facebook private investors etc. and you can find multiple ways to play this. There is a reason Goldman Sachs is not on the cover and it's because they are conflicted and have a position in here already.
3. Cyclical stocks. Consumer type companies tend to roll very much in the same fashion over the course of a year look at ANF (Abercrombie's) chart over the course of any year and u'll start to see what i mean.

@ CGS. I would only be looking at HF's when i had low knowledge and and was much more green than a mil, prob around 10+ because then its a diversification play. Then again if i had that kinda coin i would probably just call it quits and live off 2% risk free returns and have the time of my life!

@phoenix. Your post is dead right, slightly cynical in the sense that picking the right fund is possible though because u need to know who u're giving ur cash to and what kinda strategy is being run. Generally though, yes correct avoid it unless super green. I am no where near that level of $$$ but would be an option once u hit 8 digits.

[Jackhammer]

Say I have no prior investing experience or knowledge. I'm currently reading up on some stuff, and it's all a bit overwhelming and hard to get an accurate picture. I have 2K in a savings account, and will have $500 extra per month to drop into something. I have no 401k or any sort of retirement plan through my job. I'm not in a financial position to throw large sums of money into anything.

I'm still quite young so I'd like to invest in something now that will pay off for me down the road.

What should I do? I feel like I'm wasting my 2K just having it sit in a savings account which I don't plan on touching anytime soon.

Thanks!

[MikeCF]

What is your personal portfolio?

Why would you get a guy a million liquid into stocks/bonds rather than commercial property?

What do you think will be the biggest market mover (up or down) in the next 1, 5, and 10 year?

[WestCoast]

Jackhammer - if you're only liquid 2K you are probably young so I would split my direct paycheck and open 2 new savings/checking accounts that get you $200ish sign ups so you just made your account 20% bigger immediately. Your credit will get normalized within a few months. I would keep it liquid in savings till I had at least 6months savings because u never know when shit hits the fan. As soon as you get it to 6 months open up a trading account put it all in TIPS so u guarantee inflation protection. Hit me up when u feel u got a good 6 month cushion and I can help out again.

Mike - I don't advise commercial property because that's illiquid. Secondly you can essentially buy the same thing in the form of a stock (REM etf) basically u get large dividends because they are massive lendin machines. Tax rate on dividends lower than capital gains 15% vs prob 40% with that kinda bank roll.

1 year I would be in technology, that's what I own, I trade a lot but it's a bubble. Facebook will likely make that shit massively over valued by end of this year.

5 years I would make the call that Apple will finally crash, they have a long time to go up and right because of penetration rates.

10 years I hope I am not even in the country so no clue haha.

Sorry I am not gonna throw out my individual stocks think I mentioned I want to make sure I don't get fired. But I def want to help because I know I'll prob be asking people such as yourself about places abroad. Can all feel free to pm me, I'll be infront of a computer tonight.

[MikeCF]

Legit thread. I'd never heard of Lending Club or REM.

Both are very legit funds.

Thanks for the info.

What I like about your threads instead of the others is that you're not proposing some kooky trading strategy or get-rich-quick scheme.

[WestCoast]

I got a PM from a dude but i'm gonna post the answer publicly to kill 2 birds.

Basically there were 3 main pieces to it:

1. How to I raise capital for a biz proposition
2. If i have roughly $20K wut do i do
3. How do i grow the fastest most aggressively from my decent liquid position over the long-term?

1. In a simple answer? Ycombinator http://ycombinator.com/
What you do is gain start up capital by winning they award thousands a year. Sure u might not be getting 500K because no one does that shit lol sorry. But the good news is u can get some seed funding/angel investing. Regardless of the idea most ideas are not gonna be more like $50K start up max because investors are fine with running net loss in the beginning. Plz look at financial prospectus (form S-1 or 424B) on any tech stock that was sub $1B market cap. 99.999% are negative net income. Even if its not a tech idea u can get anything off the ground with 50K unless ur creating the next virgin airlines. And if u are please PM with some free first class tickets!

Anyway, but one huge thing. When working for a Venture Capital firm (I did this for about a year) I have one HUGE question for you. Is your idea to make money? Do you have financials? Can you give me market sizes and Projections? Whats the value add?

... Trick question. No one gives a fuck because we will only invest if you truly have a passion for it. This blog is even a great example clearly Roosh loves to pick up women. Plane and simple. That alone is a better sell to me than telling me i can sell XXX diapers to XXX shit heads.

2. $20K is quite good if you're youngish, quite bad if old IMHO. But generally speaking if u're single do the same formula i gave the poster above. Lock up 6Months liquid cash never know when the grim reaper decides to give u a scare and break your ankle or some shit. After that again open up multiple accounts as mentioned in my original post again because people are "lazy" they don't do this. Its 100% return profile for doing a soft pull on your credit a couple times. If someone is too lazy to manage a few credit cards i'll be god damned if i ever give them venture funding to run a start up which is pretty much just as many hours as i currently work 60-70ish a wk.... if not harder. If your living expenses are NIL and say u can invest $15K? I would just inflation protect your cash for now and buy treasury strips and wait until you are able to understand specific securities and get to around $25K and start investing. As you can see above i gave just enough info to let people understand what products are out there but its up to you to assess risk and manage accordingly since this is an anonymous site and ur not in front of me so i can't be sure anyone who asks me specifics is being truthful.

3. Plz see MIKECF response, no such thing. If u wanna gamble a little bit check out medical stocks thats essentially like buying an option without paying for an option account on the small cap names. If you can't find the names with a google search prob need to repeat part of #2 where you look into how u wanna assess risk.

I'll happily PM back after you get me a rep point for posting this fair? Esp since roosh moved one of my questions to the "newbie" forum and i know i am def not a newb. Again proving my point though that he likes what he does and its well organized and its pretty obvious from writing/tone whose been in the gig a while. Good luck in both $$$ and women. Check out the latest winner of Y Combinator, some of them are slick ideas.

As a bonus to Mike CF, if u have $1M look into being a angel investor if u really wanna get deep into finance but most people don't even know what a dividend is so i'm not opening that bag of worms!

[MikeCF]

(03-05-2012 10:56 PM)WestCoast Wrote:  

As a bonus to Mike CF, if u have $1M look into being a angel investor if u really wanna get deep into finance but most people don't even know what a dividend is so i'm not opening that bag of worms!

Hah.

I actually know a little.

I ask the question about 1 million liquid because it's a major tell about the person.

Does the person ask, "Do you want to retire on it, double it, etc.?"

My answer to that question might be, "Put it in a Vanguard income fund and move to Thailand. You'll live large off 3K a month."

But that answer has its own problems.

So, like I said, I love the question because it shows a lot about the person answering it.

Or does the person throw out the usual clap-trap about diversification.

One guy said hedge fund. That's too much CNBC. Hedge funds, unless you're super rich, are a scam. No way I'd invest in a hedge fund if I were only seven figures.

It's rare I learn something. REM was a great tip.

By the way, what do you think Facebook will open at? $40, or higher?

Where do you think it'll be in six months?

[WestCoast]

Well i mentioned i like tech thru at least mid year (and if u look its been great for that reason) there will be a bunch of morons in that stock later for sure dude. My personal saying "You buy before the idiots do and you sell it to em when u hear you're average joe pitching u the stock" As soon as i hear my barber telling me to "get in there" i am getting the fuck outta there.

But to be specific it'll beat $40 IMHO. But only guys in there at $40 are alrdy owners of the shares so its not like i can buy up today.

6 months is too hard to tell, the guys i talk to who own privately wont even tell you how to value it. they give you "future flows" but likely up massively. Doubt ne one on here has the right connects to buy @ $40. I pity the man that is short the NASDAQ that day as well.

Want something interesting? Look at ticker SOCL and BDCS. Look at Jan 6 when rumors started and see the stocks take off as they are supposed to be somewhat in FB alrdy.

Purposely writing more in jibberish to your answer just so i dont reveal too much.

One thing I do have to say about your HF comment is this. I agree $1M not enough to dump in a HF. But, its not a "scam" because they actually buy lower than spread. EX say u want 10 shares of IBM guess what u pay 2G's because u're worthless. If u want millions? Look @ what Warren Buffet paid. Sub market prices for high loads.

[Roustabout]

WestCoast - let's talk dividends. Do you not like dividend stocks? I do. I think dividends force companies to prudently manage cash knowing that they must pay out a percentage to shareholders. If the dividend is cut, the stock price takes a nose dive, all the more reason for management to be effective. Assuming Obama doesn't raise tax rates on dividends, I see them as a good way to build a passive income stream.

Like the thread, glad you put it up.

[WestCoast]

Sure man. I hate to ask another question but what kind of dividend stocks. If you look at aforementioned REM ticker thats a 10% annual dividend yield stock. Does matter for sure. But i definitely need to ask "what kind of dividend paying stock". Dividends can be cut but the stock may trade up! This is called capital allocation efficiency. If i can lower my dividend by 1% but that 1% bought out XYZ company that's more accretive to your EPS that the cash outflow of the dividend (CFO will eventually mimic Net Income over time) u're making more money.

[Roustabout]

West Coast - nice yield on the REM; thanks for suggesting it. I've never bought an ETF, just mainly blue chips, utilities, oil companies, etc. (boring I know). With my dividend stocks, I look for things we (the consumer) cannot live without. I've looked at a few mortgage REITS like Annaly Capital and American Capital Agency b/c each has a tremendous yield, but have never purchased either because I just don't understand how the Fed's interest rate moves, or the prepayment of the underlying mortgages, can affect the business model of either.

You make a good point with the slashing of the dividend in order to make an acquisition. That would be the best of both worlds, b/c, in theory, I suspect management would attempt to restore the dividend as soon as possible once there was sufficient cash flow to do so.

Thanks for the info.

[WestCoast]

smart man. Buy what you know. In life, the real damage is when you "know" something to find out it really isn't so. No one gets damaged by admitting they don't know.

If you looks at American capital agency that is another example of "trading up after a cut". Tough to understand bu they cut the divy and traded up huge for a REIT (100+bps) immediately.

Anyway I work in equities, but find it hilarious when people tell me they won't buy dividend stocks or bonds because it is for "old people". Translation, you don't low squat because the bond market is 4x larger than the equity market, and the guys are 20x smarter.

Generally think you have he correct mindset to be investing.

[WestCoast]

CD's what is better?

I just got a PM regarding Certificates of Deposit. IMHO no one, not even the lowest risk person should own them because of their terrible return. Doing a quick search i generally have these numbers off my head CiT bank runs close to the best CDs we're talking 1.08% - 1.46% for 1 or 3 years.

The Fed has set an inflation target of 2%... this means you are losing money. In addition, lets assume some tax rate assumptions. CDs are taxed at the regular rate... your true return is roughly 68 bips or 0.68%. That's disgustingly low, even savings accounts in Money market have ~0.9% like ING and thats completely liquid. Locking up a CD means let me lose money right now.

Worst case you buy treasury inflation protection, TIPS from an account like fidelity. Not to mention the bonus for signing up (lets say you have $25K in the bank you don't want to risk) you invest that with them and open a united mileage plus account and you just made 25K miles.

"But WC what if inflation is lower?"
If inflation is lower say 1%.... well guess what thats roughly what you would have made on your CD but you are liquid and have the option to simply take it out with no penalty. Freedom is more important for risk free $$. If you wanted to lock it up then u have to go riskier.

Second expected question "What about LT bonds?"
10 year rate is roughly 1.92%... This is essentially guaranteeing a loss as well.

Third response is "But bonds are probably going to have better yields soon right?"
I hate that question/thought because lets assume Obama's dividend policy goes into effect. Now dividends are taxed equally to bonds that means FLOODING of bond market. If liquidation occurs there is no benefit to owning the dividend payout without the break because you've taken on more risk with no reward. Only exception is straight on capital appreciation, but you've still moved a flow of funds away and into bonds driving the yield curve lower.

I am going to come off as a d-bag here... but please read my last few posts in this thread regarding some of the picks... Apple hit $6 bills today... Tech is outperforming as we await a risk reward stopping point to get out. I still can't get into too much detail about exact timing because that's next to impossible but i believe the thesis is playing out.

[WesternCancer]

Good thread, sadly most of this stuff is still gibberish to me. I've been reading a bit into business/investing recently but still feel I don't really know what to do with my money.

Basically I'm going to be gradding from a university considered to be in the top 25 worldwide with a bachelors of science (biology) and I have no idea what to do. I'll have 10k in the bank after gradding with no debt whatsoever.

Suggestions on what best to do with my money? I don't really know what I want to do except make more of it, I have a few fields I wouldn't mind getting into and good ideas for businesses.

[WestCoast]

I would need more details and then I can write an elaborate blueprint for you.

Most important from 1-4
1. Your cost of living?
2. Job lined up? Roughly how much pay
3. I assume 10K cash is your entire net worth, no other assets?
4. Risk appetite, want safe or high risk/reward?

You can be slightly vague to hold your identity but or example a dude with 10K cash but no job should not be taking any risk. A man with 10K and a high paying job should take more risk etc.

[WesternCancer]

1. Unless I move away after school (I want to, but wont until I get a decent job) my cost of living will probably be $200 a month at most for pleasure.

2. No job lined up, but I'm working on it. The starting average in many of the jobs I've looked at were 30-40k/year

3. Yeah, I have a few thousand in records, guitars, etc, but don't want to sell that.

4. I'm not usually a huge risk taker with my money

[WestCoast]

This one is easy then:

Put $5K into your emergency fund account and never touch it.

Use the other 5 to open up 2 savings accounts with sign up bonuses. You'll get a free $200 and there you have a month of "living expenses" the pull drops off your record. In the meantime since this takes all of 1 day to do, pound sand and get cash flow. I am not going to give you advise on vehicles because you will be mentally unprepared to take losses with 0 cash flow. Open up a few accounts that's a free 2% return in one day which equals a "730%" annualized, ps: anyone who talks about investing in any other term than percentages or bips undoubtedly is clueless.

I usually say if you're not chasing tail the day was a fail. But you need to pound sand and get a job lined up, you can get this done in a month if you really hit it hard.

Ping me up again when u get one, also if you need recruiting advise for interviews lmk via a PM keeping this one all financial.

[WesternCancer]

thanks dude!

+

[canucktraveller]

Maybe you can help me put my mind at ease.


The big deal in the past couple years has been the impending crash of the US economy and dollar. By you posts it doesn't seem as though you are very worried and neither am I.

The problem for me is that if it does happen and the US dollar completely collapses is their really any point in being diversified into any "western" equity or currency? As soon as the USD collapses the CAD and EUR will surely follow to an extent and other than carrying a large amount of Yuan's (or maybe Russian Rubles...) there is really no way to protect yourself.