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Well, other govts using us as a reserve currency (and holding our USD) is one thing preventing us from becoming Venuezuela...
Hey, now; Venuezuela is a Banana Republic, I... Oh, Right.

Nevermind.
 

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1) GPS (Gap inc, parent company of Banana Republic) is sucking it. A lot of my clothing for work is BR but I'm not exactly wearing that now. It's not clear to me why they've recovered so much

2) Here's a decent explanation on how to generate income by selling cash covered puts while you wait for a stock price to drop. OR, to generate income from shares while you wait for the price to rise (selling covered calls).
 

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I'm so done with apparel. I got burned on UA. I doubt I'll ever buy another apparel company. If I do it will be a very short term hold. That market has been monopolized by Nike. Addidas, Converse, UA, are also rans.

The only other apparel company that I should have/would have bought would have be Luluemon (LULU), but that ship has sailed.
 

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Looks like RH is cutting off the kids who were betting their "life savings" plus margin on day trading


I wonder how much volatility will decline on darling stocks of the millenials. Top 10 most popular holdings
Ford, GM, AA, Disney, DAL, CCL, GPRO, MSFT, ACB, AAPL
Pretty much all the ones we've talked about here except maybe Go Pro.

 

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Discussion Starter #345
With moves like that, I wonder if these people will move over to other platforms such as E-Trade, Fidelity, etc.
 

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With moves like that, I wonder if these people will move over to other platforms such as E-Trade, Fidelity, etc.
Both eTrade and Fidelity have been at the user/risk management/mitigation game for quite a long time; eTrade started as an online broker accessible from AOL and Compuserve 1991 (pre-internet being very accessible to the public). They already had restrictions to prevent people putting together complex options strategies that several folks didn't really undertsand.

I doubt either will be more willing to let users with <$25K of liquid assets day trade on margin OR pull the shennangians to leverage up $5K into $1M worth of margin credit like Robinhood.

CONFIRMED: eTrade has similar day-trading rules to restrict PDT (pattern day traders).
 

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Discussion Starter #347
There are more brokers out there. I only brought up E-Trade and Fidelity because that's what I could think of at the time off the top of my head, and both are well established. Would a newer brokerage dealer, specifically targeting millennials and the older Gen Zers, be available for them to do these shenanigans? Perhaps Acorns? Maybe Webull?

That's what I'm trying to get at.
 

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There are more brokers out there. I only brought up E-Trade and Fidelity because that's what I could think of at the time off the top of my head, and both are well established. Would a newer brokerage dealer, specifically targeting millennials and the older Gen Zers, be available for them to do these shenanigans? Perhaps Acorns? Maybe Webull?

That's what I'm trying to get at.
I don't think its just willingness to court millenials; you must also have the naivete to not block certain known exploitation techniques, a crappy risk mitigation team, and a bankroll to go after them.

I think Acorn's pitch is fractional investing (micro investing) and robo-investing. It's supposed to appeal to kids who want a piece of AAPL but cannot pony up $350/share.

Think or Swim might be a candidate as they are supposed to have good platform tools BUT they are owned by a "real" brokerage (TD Ameritrade) so they know how to identify wannabe day traders.

Kapitall. I actually played with this one for giggles and the idea here was gamification + stock trading. the interface LOOKED like a video game. I think it shut down b/c not enough people put real money into the site. I think I put the minimum to get their bonus.

Webull: never heard of this one but their sales pitch is hillarious: we'll give you a platform AND if you deposit $100, we'll give you 2 shares of stocks valued between $2.50 and $1650. Bwahahaha. I might set up an account just for giggles but let's be realistic: your gonna get ABEV, PBI, CLNY, etc. Something youve heard of but isn't worth much.

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IMO, RH is still easy to use (just look at the app), cheap, and still learning how to watch their users so I doubt there will be an exodus. If there was, I suspect it might be to crypto. It's like the wild west out there since strategies banned from the stock markets worldwide are still possible to implement in BTC. This article discusses bots putting in fake orders and classic pump and dump schemes. Both exist in crypto

Biggest hurdle from all of these kids getting into the market? any 18yr old idiot with $2.50 can buy shares in ABEV even if they can't buy AMBEV's products (beer). I have an EE degree and I barely understand some of how this **** works w/ crypto (esp the derivative products like DEFI Loans/interest using coins based on Ethereum. If there are arbitration opportunities (say between exchanges or between currencies), I suspect most kids are NOT going to be able to identify them. Meanwhile, CS majors are probably trying to beat pros in developing trading bots to fight on shady exchanges like Kucoin over the next hot shitcoin. I learned enough about how it worked playing with some extra coins coinbase threw my way to realize that honestly, 99% of the non BTC/Ethereum coins exist on the greater fool theory (meaning someone has a lot of these coins already and are now trying to convince others that they are worth something/differentiated enough to cash out.) if that' not a pump and dump scheme, I don't know what is.
I believe in the promise of BTC (esp as a decentralized store of value vs an easy to use currency) to hold some for giggles and I have a few bucks in Ethereum b/c I think their whole smart contracts thing is pretty nifty actually -- the fact that online casinos/gambling exist using Ethereum as the currency and smart contracts as the randomizer/payout strategy is quite impressive. From what I can tell though, it's not terribly easy to use and barely anyone over 45 (aka the holders of a majority of the wealth in the US) will have no idea how to use them.
 

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Random suggestions:

1) Consider revisiting your investments based on their expenses.
This weekend, I figured out how to get Google Sheets to pull the expense ratio for all of my funds. I then noticed that some of my funds were WAY higher (like almost 1%) than others -- and definitely higher than I remember when I acquired them. Some of these positions were fairly small so I set about wiping them out today.

Consider revisiting your investments based on their holdings
  • I also noticed that i was still in some foreign small caps (not just big companies like Alibaba, Reliance, Nintendo, etc). Given that I am hesitant to stay in small caps in the US market, I redirected these investments since they would represent two levels of risk (smaller companies are less able to weather storms vs large companies AND currency risk).
  • I think we talked about fund overlap before but its worth repeating. If your investments are in a bunch of ETF/MF, you might want to check to see how much overlap you have between funds. You might think you have a larger chunk of the market covered but there might be a ton/excessive amount of overlap concentrated in a few specific stocks (esp if you also hold some individual stocks).
Just found this tool as my 401K administrator ran this for me before offline. This one is FREE.
Pro-tip: if you have a spreadsheet that tracks your holdings, create a new sheet in the workbook that matches this web tool's input format. You can then re-run the XRAY report with your current holdings by exporting the sheet and clicking a button

Quick tool for ETFs only.
 

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A month ago we talked about Nikola - a magical electric truck company who some folks are betting to be the "next" Tesla. A month later, I honestly think these guys are snakeoil salesman

* They claim to be on track to break ground on their new factory on July 23rd... in Arizona... during a pandemic surge. I'll be shocked if they get beyond the stage Faraday Future made on their "billion dollar factory" in Vegas. IIRC, that factory was announced to much fanfare in Dec 2015 but work on the site had ceased by Nov 2016. There are some lines in the dirt.

* More importantly, have you seen how fake the pictures of the Nikola Badger truck look? Well, they are all renders. For a vehicle that is supposed to be in production in 2022, they won't show it off until EOY 2020.

* FWIW, their fuel cell semis seem more real.

* Would i short them? No, as I believe markets can act irrationally longer than I can fund gambles.

However, take a look at the options available for sale for Aug 2020.

This is a stock that zoomed up from $10 -> $70 in six months. On hype and the believe that if Anheiser Busch signed up with them, well, someone must have done due dilligence here.
Looking at the puts side, there are quite a few people who are willing to pay you $1/share for insurance that you will buy their stock if it craters to that price before 8/21. Sure there may be folks with $10/share stock wanting to lock in some profits but the sheer number surprises me. That is a 78% discount off the current price.

Why? Well "As of June 5th, 2020 there are 24 million Nikola warrants outstanding (ticker NKLAW) trading at $28. These are similar to call options with a strike price of $11.50 and can be exercised on July 6th, 2020.
I would expect the value of the warrants to get close to the market price minus $11.50

Here's a guy gambling on the warrants themselves by betting on the "greater fool theory" (meaning a greater fool, likely @ RH), will buy his warrants at a premium before the shares pop. He also highlights that the shares underlying the warrants haven't even been registered yet (so they aren't factored into the market cap).

Also, read the risk factors in their S1 from June 15th. They are admitting in the fine print that htey won't make money until 2021 at the earliest AND will be burning money by the bale before then.
Counterargument: its priced in based on the delay to go from NKLAW to NKLA shares

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Two thoughts:
1) Buy the warrants as this guy suggests. NKLAW is at $36.19 so adding $11.50 each share means on 7/6, you could trade them from NKLA for $47.59. That's a discount of 32%. NKLAW price should climb up to (or NKLA should decline) so the delta will be around $11.50/share. Idea is to buy NKLAW and sell off before the normalization.
- I'm not a day trader and this gets into day trading territory (meaning how quickly you have to monitor and react to market changes) for me.

2) Looking at the premium for selling puts a different way, $100 for a $1,500 commitment is a 6.67% ROI or an astounding 41.95% APY (compared to 1% if you left your money in the bank). You are risking that the house of cards doesn't fall apart before 8/21 though (and after 7/6 when 24M shares COULD flood the market - roughly an additional 6.7% of the 357M shares currently available)

I dunno. This ones a total gamble. Makes BTC look stable.
 

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Tesla is successful in no small part because Elon Musk is a cult of personality, and the rest is coming out with a viable product no one else had at the time, that now everyone else is answering. Upstart car companies still have about a 0.0000000000009% chance of breakthrough success in this day and age, especially when the upstart company in the EV field names themselves Nikola.

This is may be very unscientific but there is zero chance the only two high volume car makers to emerge from scratch and not immediately implode in a century are Nikola, Tesla. If that works out I’m pulling myself up by my bootstraps and starting my own power company to compete with Com Ed, I’ll call it Com Tom!
 

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Tesla is successful in no small part because Elon Musk is a cult of personality, and the rest is coming out with a viable product no one else had at the time, that now everyone else is answering. Upstart car companies still have about a 0.0000000000009% chance of breakthrough success in this day and age, especially when the upstart company in the EV field names themselves Nikola.

This is may be very unscientific but there is zero chance the only two high volume car makers to emerge from scratch and not immediately implode in a century are Nikola, Tesla. If that works out I’m pulling myself up by my bootstraps and starting my own power company to compete with Com Ed, I’ll call it Com Tom!
To be fair, we may be coming into a world where everyone is their own "power company."
Right now, looking out my window, I see about 40% of houses in my line of sight have solar panels. I haven't put an array on my own house yet but my roof is 25? yrs old so when I do have to replace it in the next few years, I'm likely to drop the cash to put some panels up even though our electricity bill is <$100/mo.

A co-worker actually put his own system together and got a larger system for the same amount of $ than if he paid someone to do the work. He spec'd and installed the panels and inverters himself and only paid an electrician for the final hookup to the house mains. With some companies advocating microinverters (small DC-AC inverters behind each panel vs at the end of each array), my understanding is that the rooftop work is even easier.

From what I can see, the biggest issue is the cost outlay. While some companies make this cheaper by offering a lease model (which I would definitely consider in any place where storms/hail could damage the panels), here in CA where there isnt' much severe weather the cost is a small portion of your house. In comparison, my friend in Boise finds this idea much harder to swallow since his nice midcentury home is only $150-200Kish and any solar could be ~10% of his homes value.

These costs will continue going down though so it may be worth it for you in a few years.

PS. If Nikola had stayed in their lane until the semis were in production, I would be less skeptical. However, they've announced everything from UTVs to an F150ish truck now without having released a single product. This makes me question if theres any cattle behind the big hat.
 

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Not to mention delivery vans. They've partnered or are discussing partnering with Mercedes, who currently controls the delivery van market.

 
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Got any shares which are losers and you haven't cut your losses yet because they'll climb back eventually and/or they still pay dividends? Well, I bought in on CCL and RCL too early (while they were still going down) and I'm underwater (~50% of the price I paid).

I was thinking about ways to make some money while i wait for this whole industry to recover.
One classic approach which I will be experimenting with is selling covered calls.
I wouldn't say its a good idea to put yourself in my position here but if you find yourself in a similar situation, it may be worth looking at.

Cash covered Call options are basically promises to sell 100 shares of stock you already own at a set price anytime between now and the options expiration date.

My thinking:
  • I'll set my strike price to be my cost basis for the stock. Since my alternative is just to sit on the stock, there's no reason to have the shares called away at a loss even if I could get more of a premium up front.
  • Set the options date as short as possible while still maintaining my target strike price.
  • Valuing cash covered put sales is easy because you get X premium for tying up Y dollars for Z time. It's easy to calculate an annual yield with those three datapoints.
  • With covered call sales, I clearly know I will get X premium and Z time but Y is the value of the shares I'm putting up. While the numbers may look more favorable if I agree that 100 shares should be valued at the price at T=0, for me, a more realistic analysis would be based on my COST BASIS for the shares. Therefore, other people would see different calculations depending on what price they bought the underlying shares for.
Anyway, I plan on deploying this tomorrow for CCL and RCL. It doesn't look like there's an options market for EADSY.
I may consider doing this with GILD though.
 

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I'd like your opinion on something.
- I made a dumb purchase with one of my IRA accts. YOLO. It's now sitting at 50% of my cost basis ($10.50 vs $21.xx). YOLO yields ~4% but that number has been cut a few times since inception. Next dividend in Sept. The whole market hasn't done well (see things like ACB).

- I'm lucky enough that I don't need this money currently tied up for other investments. I comfortable with my level of exposure into the market that I don't want to put the money in something else that could yield more.

- The way the options market is trading, I can basically sell a call that has a strike price close (but not over) my cost basis. Which means, in the UNLIKELY event that the market blows up and the ETF climbs 2x, I will realize a loss.

- Long term, I'm not sure the ETF is going to be a winner so I wouldn't mind if the ETF was called away (as long as I wasn't "losing" money on it. Their expenses have crept up to closer to 1% which annoys me and overall, the market cap of the ETF is quite small ($45M) so the chances that YOLO will have bought a "winning ticket" with the next starbucks of weed is pretty minimal. I spoke with another friend and his commentary is that he suspects that as legalization goes nationwide, you will see a ton of more local growers/mfgs (kind of like beer). The whole reason I bought into YOLO was because I was hoping that THEY would be able to pick the next Starbucks. Meh.

OPTIONS:
1) Do nothing. Collect the dividends. Be annoyed that this is on my books. Live with the failure :)
2) Sell YOLO and buy something else with higher yield/potential appreciation. Again, I don't need to as I have other money I could use if I wanted to "buy something else". This is my least favored option.
3) Sell calls for 8/21/20 (fairly near term to 2x is even less likely) @ SP of $21. For every contract, I would make $5 premium but i would be risking realizing a loss of $20 if the ETF doubles. There is no guarantee of this option because the market isn't there yet but I could offer it.
4) Sell calls for Feb 17, 2021 @ SP of $20 (ETF going 2x is possible but certainly not likely). For every contract, I would make $20 premium but my risk is a potential loss of $100. There are enough bidders offering this price to fill 6 contracts (aka make $120 and risk a potential loss of $640).

I'm sure I'm over thinking things for a relatively small amount of money but part of this is entertainment as well.
Please LMK what you folks would do in my shoes.
 

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If it's YOLO money let it ride (Option 1) unless you've completely lost confidence in the company ever turning around or are unwilling to just let it ride then exercise Option 2 and reinvest it elsewhere. I'm still sitting on huge losses on UAA and UA that I should have dumped when Kevin Plank split the hell out of the stock. I'd have been happy to take 50% losses when it last rose to ~ 25 but now I've got to sit it out or take huge losses. Like you, I'm on the fence about that one as well.

I'm sorry I'm not versed in options. If you can sell at a loss, turn around and put what's left of that money to better use elsewhere then that's probably the better option. Lick your wounds and move on.
 

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Discussion Starter #357
Anyone own EKSO? I bought some shares when we discussed about it here before their reverse stock split.

I guess the FDA approved EKSO for some exoskeleton suit on brain damaged patients bumping up their share price 125% on my last check. I'm happy, lol.
 

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I bought EKSO on 2/6 at .39 and sold it on 2/28 at .29 on a stop loss. Yeah, good for you! It was a YOLO investment for me. I'm kicking myself for setting that stop loss. Glad you made some money on it! You're welcome for the recommendation! :p
 

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If it's YOLO money let it ride (Option 1) unless you've completely lost confidence in the company ever turning around or are unwilling to just let it ride then exercise Option 2 and reinvest it elsewhere. I'm still sitting on huge losses on UAA and UA that I should have dumped when Kevin Plank split the hell out of the stock. I'd have been happy to take 50% losses when it last rose to ~ 25 but now I've got to sit it out or take huge losses. Like you, I'm on the fence about that one as well.

I'm sorry I'm not versed in options. If you can sell at a loss, turn around and put what's left of that money to better use elsewhere then that's probably the better option. Lick your wounds and move on.
So that's my quandry. I don't need the money to invest elsewhere. My first inclination is to let it ride. However, I wanted your opinions on how likely you think this ETF will 2x in the OCT or Feb timeframes.

I suspect its not it worth risking $200 for $50 worth of profits, or $600 for $100 worth of profits? That's the part I'm debating with myself.
 

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Anyone own EKSO? I bought some shares when we discussed about it here before their reverse stock split.

I guess the FDA approved EKSO for some exoskeleton suit on brain damaged patients bumping up their share price 125% on my last check. I'm happy, lol.
I daytraded EKSO and VXRT today in a virtual account in a million dollar game and made $3100 and $2600 respectively, and also sold my short position in Wirecard that I opened Monday.

I can't afford the time in the day or the fortitude to daytrade with real money. I can't manage that stress and still have a day job.
 
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