Citibank

rpadula said:
Found in my blog rounds tonight. Made my head explode. Too complex for me!
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Absolutely fascinating and cool. Being that I began to understand it....

So these "pros" are not only betting on the shaky proposition that Citi will survive, but further that they can predict how a never-ever-before changed-every-day erratic nobody-knows-nuttin government investment is going to end up? :yikes:

We tell Ben it's as safe as buying Lotto tickets and it turns out even the pros didn't get that. :D
 
Excellent article. Lesson to be learned, if you have no idea why a stock is moving strongly in one direction or another; don't fool with it until you do understand. The best traders I know often stand aside until the herd is done blowing through.
If you're standing there all day watching, you might be able to get in and out quickly. For most of us, competing against professional traders is a losing proposition.

I got caught in a short squeeze in NVR. The stock went up over $40 per share in one day--while I was off doing something to make a living <g>

Best,

Dave
 
Dave Siciliano said:
I got caught in a short squeeze in NVR. The stock went up over $40 per share in one day--while I was off doing something to make a living <g>
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Which has always made me wonder, what happens if a trader doesn't HAVE the funds to cover a short position (say the stock increases in price dramatically)?

The trader has already paid a margin to borrow the stock for the short position, but let's presume he really messes it up and suddenly owes $60K. If he doesn't have that kind of money, how does the position get settled?
 
TangoWhiskey said:
Which has always made me wonder, what happens if a trader doesn't HAVE the funds to cover a short position (say the stock increases in price dramatically)?

The trader has already paid a margin to borrow the stock for the short position, but let's presume he really messes it up and suddenly owes $60K. If he doesn't have that kind of money, how does the position get settled?
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I think it's like a margin trade where all of the trader's assets are on the line. The broker should do the margin call and freeze all of the trader's holdings and involuntarily due the short position. The principle being that the trader can't get into the short position unless he has other holdings to cover it sinking totally.

Right, Dave?

You're right Troy, one aspect of that of that is say you short 1000 XYZ at $10, which means you sold it at $10, netting $10,00 and if it goes to $100, you have to be good for buying the 1000 shares at the $100 a share or $100,000 and there's no upper limit because there's no upper limit to the stock gain (or maybe there is a stock market trading limit on the up side, too.) By my theory if you have only $100,000(? or some multiple/percentage) in stock in your portfolio at that brokerage you would have been liquidated before the day ended.
 
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mikea said:
I think it's like a margin trade, all of the traders assets are on line. The broker should do the margin call and freeze all of the trader's holdings and involuntarily undue the short position. The principle being that the trader can't get into the short postion unless he has other holdings to cover it sinking totally.

Right, Dave?
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Yes, it's a margin trade and funds must be there to cover a reasonable move against one; if the move is such that additional capital is required, one gets a margin call and the funds have to be posted quickly. If one doesn't post the additional funds, the position is liquidated and the account holder owes the loss amount. If the account holder can't pay, the brokerage firm takes the loss.

Best,

Dave
 
Dave, I appreciate your help with this. I am a total noob when it comes to trading. My 403B is managed by TIAA-CREF, but I wish I knew more so I could be more involved.
 
Ben: Take a couple courses if you can. There are investment clubs where folks get together and chat about investments and why a company's stock makes sense.

We are in unusual times. Even with Warren Buffet you would be even in his stock from about ten years ago. Many folks have lost a lot in the last two years in the stock and real estate markets.

The folks I follow are leaning toward stocks that produce things: Steel, copper, etc. right now. This would benefit from the stimulus package recently passed and from inflation during a recovery.

Me, I'm still short highly leveraged companies that will have difficulty refinancing. Short the S&P 500 index and a home builder, but I have over seven figures in single family home lots on the ground. Some of this is a hedge against my business being bad.

If I was just an investor for the long term, I'd stay in cash for a bit longer except in my retirement plan. There I might have an oil trust or some basic industries with good dividends.

But, there are lots of experts out there with other opinions <g>

Best,

Dave
 
Are you keeping up with the changes to accounting rules: specifically mark-to-market? This could change Citi's balance sheet substantially. The G-20 also always gets folks riled up; then, things settle back after everyone realizes nothing really changes, but there will be more stimulus.

Mark-to-market changes are like putting new carpet and furniture in the basement,but not fixing the leak that ruined the previous decor.

Best,

Dave
 
wbarnhill said:
It's kinda been my thought process recently that I might join in the market. I figured there's one of two outcomes... 1) the market recovers, and I make some money for retirement, or 2) the market collapses, and I've got much much worse to worry about.
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Not a bad way to look at it really, though on another board there's a kid that recently got in the market and is down:cryin:, where as my investments at the Blackjack table have payed pretty handsomely this year, better than the best Dot Com bubble deal ever did.:cornut:
 
Henning said:
Not a bad way to look at it really, though on another board there's a kid that recently got in the market and is down:cryin:, where as my investments at the Blackjack table have payed pretty handsomely this year, better than the best Dot Com bubble deal ever did.:cornut:
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And I bet you had a LOT more fun than he did...
 
Henning said:
Not a bad way to look at it really, though on another board there's a kid that recently got in the market and is down:cryin:, where as my investments at the Blackjack table have payed pretty handsomely this year, better than the best Dot Com bubble deal ever did.:cornut:
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And the casinos give you "free" drinks! :cheerswine:

Dave S, I think you might like this blog post on mark-to-market. David Merkel is one of my favorite, level-headed financial bloggers.
 
rpadula said:
And the casinos give you "free" drinks! :cheerswine:
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Yep, and I order.....coffee. Even on a six deck shoe I can still track high value cards, but not when I'm drinking Tequila. Those drinks are far from "free", they cost some people dearly....
 
Henning said:
Yep, and I order.....coffee. Even on a six deck shoe I can still track high value cards, but not when I'm drinking Tequila. Those drinks are far from "free", they cost some people dearly....
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So folks, Henning just admitted to "cheating. :cornut:
 
mikea said:
So folks, Henning just admitted to "cheating. :cornut:
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It's not cheating, it's part of the skill of the game. They don't like it because it eats into their odds advantage which is marginal in Blackjack anyway, and if they figure out you're doing it, they ask you to leave and not come back, but if they figure out you're doing it, you must be using your fingers and toes to count....
 
Thing about CW and the markets working is because the market doesn't really operate off of value, it operates off of perceived value. Conventional wisdom at this point from everyone I know in the game says "another year" and so it shall be. If someone with a lot of clout, say Warren Buffet, were to say "I think we're pretty much bottomed out now" and start buying, the market would turn in a few weeks.
 
Henning said:
It's not cheating, it's part of the skill of the game. They don't like it because it eats into their odds advantage which is marginal in Blackjack anyway, and if they figure out you're doing it, they ask you to leave and not come back, but if they figure out you're doing it, you must be using your fingers and toes to count....
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I know. :tongue: I saw the "Breaking Vegas" show on Ken Uston, who wailed that it wasn't cheating.


Part 2
http://www.youtube.com/watch?v=hmJW8PYCGZ0


At one point Atlantic City told the casinos they couldn't ban card counters and for a few months their team, for the first time right out in the open, raked in hundreds of thousands. Then the casinos got AC to let them put the on card counters ban back in.
 
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I still like the Equity funds, paying a guaranteed 9.75%. Gross gain may not equal the hit or miss stocks that can dive as fast as rising, but the 9.75 is consistent upon what was originally invested, regardless of what the various Fund(s) own stocks holdings are valued.

HR
 
Lawreston said:
I still like the Equity funds, paying a guaranteed 9.75%. Gross gain may not equal the hit or miss stocks that can dive as fast as rising, but the 9.75 is consistent upon what was originally invested, regardless of what the various Fund(s) own stocks holdings are valued.

HR
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Guaranteed annualized 9.75% invested in equities without regard to fluctuation in the equities markets? There was a guy named Madoff who managed a fund like that...
 
Chip Sylverne said:
Guaranteed annualized 9.75% invested in equities without regard to fluctuation in the equities markets? There was a guy named Madoff who managed a fund like that...
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No Madoff in these. I bought them through RBC(Royal Bank of Canada) Wealth Management. There's only been one "delay" of income. One of the funds owned Piper Aircraft. When Piper was at a low point the fund received SEC(?) permission to temporarily delay normal payback. Then when Piper was sold to the foreign firm (Imprimis? Imprintis? -- I don't remember) for hundreds of million$ cash, the selling fund restored the quarterly distributions.

But in the first several months I was holding the funds I watched each fund's market value -- and they kept shrinking based on their own holdings of stocks. "Why is that?" I asked my broker.
"Not to worry; what you put into each fund is what each pays the 9.75% return. It remains a constant." It just took a while for me to get used to being paid quarterly. (But January 15 isn't far away)

HR
 
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