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$10000 to invest. Zero or 1 million in 5 years.

Discussion in 'Economy' started by Youngdan, Nov 29, 2015.

  1. OP
    Youngdan

    Youngdan Moderator Staff Member Moderator Political Irish Donator

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    The important thing is not to be scared off the table but to keep your wits about you.

    I see fb, bby,tesla, Netflix and a lot of fancy tech related stuff have come back down some over the last few days. My shorts are small potatoes compared to the longs but I hope I just got on too early. My mining positions were losing for the first 2 months.
    Only one person can hit the exact high or exact low in any position so it is just, hope for the best.
    There is no doubt now whatsoever the the real estate bubble is and has burst in most markets here. The slush fund and dirt cheap gas kept this ball rollong up to this. This very cheap oil can't last much more. Me buying a gal of juice at $1.95 is certainly out of kilter in 2016
     
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    Youngdan

    Youngdan Moderator Staff Member Moderator Political Irish Donator

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    We have being waiting for the vital pronouncement from the Fed which will be delivered in 5 hours, fingers crossed as this is the biggie until December and will move the market
     
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    Youngdan

    Youngdan Moderator Staff Member Moderator Political Irish Donator

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    Off to the races now, I will be back to the high in no time at all
     
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  4. Tadhg Gaelach

    Tadhg Gaelach Posting Legend Political Irish Donator

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    What did you think of the Bank of Japan and the FOMC? Seems to me the markets have been left without direction. The uncertainty could certainly be very good for precious metals.
     
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    Youngdan

    Youngdan Moderator Staff Member Moderator Political Irish Donator

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    The Fed has zero credibility now. There may be a delay but gold is about to jump imo. December is an eternity away
     
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    Youngdan

    Youngdan Moderator Staff Member Moderator Political Irish Donator

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    My work has eased off so I will give a decent update later. My gold/silver shares have retreated so I had a hefty margin call. I sold short 14 shares more of HD today and I sold just 4 PUT contracts OF HL strike 5.5 the day before yesterday. First time ever I sold puts, but it certainly is something that I will be doing more of. A complete update as I said, later tonight.
     
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  7. Tadhg Gaelach

    Tadhg Gaelach Posting Legend Political Irish Donator

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    I was telling Youngdan earlier in the summer that I'm dabbling a bit in Forex. I have a couple of interesting trades on at the moment. I'm shorting the Mexican Peso against the USD on the basis that I expect a continued drift downwards in oil prices at least until the proposed OPEC meeting in November (which I wouldn't be at all confident will come to an agreement). But more importantly, I'm betting on a Trump victory. News today that Trump is in the lead in Florida sent the Peso into retreat, and me into profit. I also managed to short WTI (oil) at the high of 52.16 and now its below fifty, so that's doing well for me. The next trades are a bit of a gamble. I've shorted the New Zealand Dollar (NZD) against the Euro and against Sterling. I think the Euro is a bit underpriced after weeks of battering. Likewise with the Pound (which took another tumble yesterday). NZD has had a fantastic few weeks, and has outperformed across the board. However, the Reserve Bank of New Zealand is set to cut its base rate in November over fears of sluggish inflation, and all the commodity currencies, including Australian dollar and Canadian dollar are looking overpriced going into the winter. In effect, I'm hoping for short covering on the Pound and perhaps a slightly less dovish tone from the ECB (Euro got a boost today after Draghi said that the ECB is not comfortable with such low interest rates over the long term - but tommorow's Deutsche Bank Q3 earnings will present a considerable risk to the Euro). I've ramped up my gamble on Sterling by buying it against the South African Rand (ZAR). I've also bought the USD against the ZAR on expectation of a FED rate hike in December. But most of all on the fact that the South African economy is facing into bad times. There is some speculation that Moodys is going to relegate South Africa to junk status by Christmas. Investor confidence in SA is largely based on confidence in finance minister Pravin Gordhan, and now he has been indicted for alleged irregularities ten years ago. It's widely suspected that this is a politically motivated move by Zuma - none of which instills confidence among real money. As a kind of hedge against USD weakness, I'm long gold.

    So, all medium to long term trades. I like to be above the daily noise of the market and concentrate on the fundamentals. I just use technicals for entry and exit points and stop positions - not for forcasting market direction. I'd like to short the Canadian dollar also, but I haven't thought of a way to do it without adding too much USD \ Euro \ GBP risk. Maybe against the Swiss Franc or the Yen.
     
    Last edited: Oct 26, 2016
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  8. Tadhg Gaelach

    Tadhg Gaelach Posting Legend Political Irish Donator

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    South African Rand (ZAR) strengthened significantly this morning, pushing Sterling (GBP) right down to its flash crash low, on reports that charges have been dropped against finance minister Pravin Gordhan. I took this as an opportunity to short the Rand again at a much better price. I don't see any long term respite for the SA economy, and further reports have emerged that Standard & Poors are set to reduce SA to junk status. My Mexican Peso short had a boost from Hillary's latest woes. I went ahead and bought Japanese Yen (JPY) against the Canadian dollar (CAD) as global equities seem set to push lower thus promoting safe haven flows into the JPY and oil prices have continued to decline, undermining the CAD.
     
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    Youngdan

    Youngdan Moderator Staff Member Moderator Political Irish Donator

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    That is very interesting. I have decent positions in HMY and DRD and they are both steady and indeed up slightly. The rand moves a lot. We await more news, if any, till the election
     
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    Youngdan

    Youngdan Moderator Staff Member Moderator Political Irish Donator

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    I have to seriously update this. I made a few more short sales that are not going my way except for one. My mining shares have suffered greatly so I had a series of big margin calls which I met. I sold short 4 puts in HL which despite everything are hopefully going to expire worthless. It is just $176 but it is a trial. I never before sold options, I was always a buyer
     
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    Youngdan

    Youngdan Moderator Staff Member Moderator Political Irish Donator

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    Undaunted, I bought 100 shares of NEM at $55.535 today, judging/hoping the drop is over
     
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    Youngdan

    Youngdan Moderator Staff Member Moderator Political Irish Donator

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    That was 35 and change not 55 and change.
     
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    Youngdan

    Youngdan Moderator Staff Member Moderator Political Irish Donator

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    I must update this as it has gooten very complex. Basically I had to come up with a lot of margin money and indeed sold some positions. I also added a lot of shorts, which to nobodies surprise are sitting on severe losses. I will list my positions that I still have and fill in the rest tomorrow.

    Bought 31 DCTH @8.70. now 0.0725 It is not easy to lose 99% so quickly.

    Sold short 100 TRNO@27.82 now 29.62. a quick loss.

    Sold short 20 STZ@153.03 now 170.35 a slower loss

    Sold short 31 STAG@23.62 now 26.29 another significant loss

    Bought 400 SLV@13.91 on average now 17.31 a nice profit. I added to my initial position as it rose

    Sold short 111 RGC@22.13 today now 22.14

    Sold short 101 O@61.31 on average now 61.41 I was up so I added more and am now down slightly

    Sold short 15 MTN@158.15 now 189.91 Badly in the wrong direction

    Sold 41 MDP@59.80 now 64.35 Another loss

    Sold short 45LOW@74.87 now 82.41 more pain

    Sold short 56 KNL@25.12 now 24.14 a gain so will be looking to add to that.

    Sold short 100 KBH@19.23 now 20.04 a loss but no panic

    Bought 550 IAG@2.89 now 4.39 happy days and hope to buy more when my margin allows.

    Bought 6114 HL@4.21 on average now 5.63 A nice winner and my biggest position which I have averaged up. I lust to have 10000 shares of course.

    Sold short 8 HELE@87.50 now 91.25 I am tempted to sell short more but the golden rule is never in increase a loser regardless of how tempting.

    Sold short 30 HD@125.10 now 148.20 A loser but it will come back.

    Bought 3201 GSS@0.4818 now 0.8672 My biggest percentage gain so I should have averaged it more than I did but was squeezed for margin money.

    Sold short 21 FB@116.43 now 139.98 Thankfully it is only 21 shares

    Sold short 22ESS@213.98 now 236.79 another that went badly against me.

    Sold short 92 DRE@25.52 now 27.57 a loss

    Bought 581 DRD@3.70 now 5.03 a nice profit but this is something that I will sell because there is no future in South Africa

    Sold short 5 CHTR@320.63 now 332.30. A loss

    Bought 2019 CDE@7.21 on average. now 9.69. This is my serious greed position. It hit over 16 and I rode it back down in the 7 but it is going decent now. This could go very high.

    Sold short 33 BUD@107.60 now 110.04 A loss but it will turn.

    Sold short 123 BBY@30.12 now 48.65 This is by far my nastiest loss.

    Bought 147 AU@11.42 now 12.51

    Sold short 23 AAPL now 141.49. Look at that for a percentage loss. Again lucky enough it is only 23 shares


    I did 4 option trades and closed out some positions that I will relate tomorrow.

    Considering the trump effect on short sellers I did OK
     
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    Youngdan

    Youngdan Moderator Staff Member Moderator Political Irish Donator

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    I have 4 instances of options to talk about. Options are extremely volatile and are not for everybody by any means. You have to almost assume you are going to lose but when you do win, you will big.

    My first encounter was when I sold 4 Put contracts of HL which expired on Mar 17 2017. I did this in December I think. A Put gives a person an option to sell a stock at a given price. So if you think a stock is about to fall you buy a put and then you can force the buyer of the Put to buy the stock from you at the agreed price, called the strike price. Buying options usually ends up losing because you have to be correct in guessing the direction but it also has to happen before you run out of time and the option expires. Therefore I decided to instead sell the Put options. So I sold 4 Puts and got about $175 put into my account.The stock was about 6 and the Puts had a strike of 5.5 and an expiration of Mar 17th 2017. So I was hoping that HL would not fall below $5.50 until after Mar 17th if ever. Otherwise I would have to buy 400 shares at 5.50 regardless of what they were trading at. The absolute worst that could happen isif they went to zero and I had to buy at 5.50 and would lose $2200 on the 400 shares.

    Things went fine until the day before they were to expire and sure enough HL dropped like a stone below 5.50 and the next day I HAD 400 shares PUT to me and I had to buy them at 5.50 when they are worth about 5.00. That was a bummer to come so close to pocketing all the cash but I still did ok as the 175 was about the same as I was down on the shares. Now as it turned out the 400 shares are today worth 6.05 as we speak so I have made about 400 dollars on them. This does not often happen with a happy outcome, they could have just as easily dropped another dollar and I would have lost another 400 if not more.

    My next plan was to sell 1 Calll contract of NEM at 35 for March 17th expiration as well. A Call is the opposite to a Put.If you think a stock will rise you buy a Call. You buy it from a lad who thinks it will not rise in the timeframe and he agrees to sell you 100 shares at the higher price, hoping it won't get there and he pockets the option cost entirely. This is what I did. If you don't own the 100 shares and have it available to sell to the Call buyer it is called being NAKED and that is extremely risky. So I had the 100 shares so my lose if wrong was limited, I would just miss out on the profit above 35 dollars as I had to sell them at 35 regardless if they were 40 0r 60 or 200 or whatever.The stock was about 34 and I got about 2.5 so if I was wrong and it went up I still would make $250 by selling the option contract plus $100 on the price increase from 34 to 35. If it went to 45 I would be kicking myself for missing out. If it went to 25 I would be kicking myself because I can not sell until the call option has expired because the shares are needed to cover the option, hence the name COVERED CALL.
    This option did expire worthless so the sucker who bought it off me lost his 250 and I have it now.

    I later sold the NEM shares I had which I will get to later.


    A few days back I did what I swore I would never do. I bought 14 Call option of SLV at a strike of 20 and a March 2018 expiration at a cost of 0.88. It cost $1232 and it is down about 25 dollars which is basically the same or slightly better than when I bought it as there is a spread between bid and ask.

    Yesterday I bought 13 Call options on SLV with a strike of 19 and expiring next January. So I have less time with these but a nearer target of 19. They cost me $1079 and on the close now they are worth $1222.

    SLV closed at 17.53. I need it to get to over 21 dollars to have both of these make a lot of money.Of course the odds are that they will expire worthless and SLV ends below 20 by next March. SLV tracks the price of silver but about a dollar lower. I will either lose all the 2300 dollars or I will make hopefully 10 grand to justify risk.


    I will fill in the closed out positions later and also I had to put in well over 10000 dollars in margin calls so the whole thing is bigger than I had wished thanks to Trump sending the market against me, but I am confident on being right.

    Famous last words
     
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    Youngdan

    Youngdan Moderator Staff Member Moderator Political Irish Donator

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    I also took more shorts today.
    I sold 35 shares of ELS short at $79.15. It closed at 79.35.

    Another 7 dollars lose.

    I need fat boy Kim to make me some money over the weekend. Market closed tomorrow.
     
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    Youngdan

    Youngdan Moderator Staff Member Moderator Political Irish Donator

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    I foolishly bought calls and had to put about 3500 more in this week.I will give a complete update tomorrow. Trump has really hurt. But surely silver can't go any lower than $16.45
     
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  17. amsterdemmetje

    amsterdemmetje Well-Known Member Political Irish

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    I buy stocks off the FTSE 100 based on a websites broker forecasts. Buy the 8 that have the strongest consensus sell every month to hold for 6 months and sell once profit can be realised. Roll if no profit forthcoming. It's an experiment. Normally no more than 12 have a consensus sell and never the same 12 month after month.
     
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    Youngdan

    Youngdan Moderator Staff Member Moderator Political Irish Donator

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    Well at least you are attempting to perfect the buy low part.

    I hope it works.
     
  19. amsterdemmetje

    amsterdemmetje Well-Known Member Political Irish

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    In November 2016 the strongest consenus buy in the broker forecast was shires at 4799. 3 months later it was up 1p. Now it's down 170p.
     
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    Youngdan

    Youngdan Moderator Staff Member Moderator Political Irish Donator

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    It is an uncomplicated approach. Taking the contrarian position.

    How apt, as you supposedly deal with overly contrary people nightly.
     
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