patrick.net

MAGA says

I've been out of the market for five years. Everything is in CDs with my credit union. I am 67-years-old, retired, debt-free, and have a positive cash flow. Most of my estate is going to charity after I pass away.

Have you considered BLM or the george floyd family?

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I like writing covered calls as I did that back in 2009 to 2013. I bought 1000 share of Carnival Cruise Line at $10 a share a couple of months ago.

I have been writing covered calls each week and making at least $250 a week with the contracts expiring (ie.., out of the money) for last 10 weeks just on the underlying stock or asset Carnival Cruise Line.

I am also writing covered calls for other stocks and ETFs I bought in April like JETS, UNG, Bloomin Brands, IMAX, Royal Caribbean, MGM, Exxon, Chevron, Phillips 66, and Twitter.

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I read "One Up On Wall Street" by Peter Lynch when I started investing, and I always remembered Lynch saying "Options are a fast game played by some of the smartest people in the world."

That was enough to keep me out of options. I don't short stock either. Or buy mutual funds (except for Vanguard index funds). I just straight out own shares.

komputodo says

Have you considered BLM or the george floyd family?

hhahahahahahaaha!

The risk-reward for parking "capital" in treasury debt that pays no interest, (or nearly no interest), especially for small depositors like most of us, is not worth it. Since there's no interest income, the only upside will be for a capital gain if the rates go negative.

The downside though, is that the market value of those bonds could go down. A lot. In recent months UST bond yields (and therefore bond market values) have been more volatile than stocks.

When, or if, a stock price crash comes and it's time to "jump back in", we must buy with cash (or credit I suppose for fancy-pants margin folks). We cannot buy with bonds. Those bonds must be sold to convert to cash to make the stock purchase. If the market value of those near zero yielding bonds has dropped, you won't get your money back in the sale. If you're in cash, you'll still have your cash. It won't be like you missed out on much income compared to those low yielding bonds.

I dunno, dude. With government bond yields where they are now, I'd use FDIC insured bank deposits for dry powder. (Maybe that's what I'm doing). I would not be buying bonds for dry powder.

If you wanna have bonds or bond funds for the income then those might be the "high yield" corporate types. But you said as dry powder to jump into equities. I like cash for that. Cash is King.

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Writing covered calls presents the least risk.

Never trade on margin and never short a stock. Always trade with a cash account (ie.., covered calls), and your option level is 0 (covered calls and cash secured puts).

If you want extra risk by shorting the market than get a Proshares ETF like Proshares Short S&P 500 (SH) or even the more leveraged short ETFs like Proshares Ultrashort S&P 500 (SPXU).

I did the covered call strategy back in 2009-2013 and am doing it now with the repeat in volatility.

Its not difficult and it does not require any significant analysis. Just sell or write contracts (i.e., "sell to open" or "write to open") that expire within 5 business days and with strike prices that are at least 20% greater than the current share price for the most volatile stocks and ETFs like Carnival Cruise Line and JETS.

I expect perhaps silver etf (SLV) will rise and show volatility as well, but bitcoin and cryptocurrencies are competition to precious metals more now than in 2009-2012.

Even with non volatile or stable underlying stocks and ETFs you can make an extra 7% a year with covered calls.

This is one of the better sites out there: https://www.borntosell.com/covered-call-tutorial/covered-call-example

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Booger says

WookieMan says

It could drop 50% tomorrow and I'd be okay by the time I reach 50.

There are people here under 50?

I don't think there are many. 37 this month for me. I for some reason got into real estate as a career during college and stumbled across this site I think about 2007ish. I can't remember the exact year, but I lurked forever before getting active and commenting. I was a fucking baby when I found this place basically.

Patrick says

I read "One Up On Wall Street" by Peter Lynch when I started investing, and I always remembered Lynch saying "Options are a fast game played by some of the smartest people in the world."

That was enough to keep me out of options. I don't short stock either. Or buy mutual funds (except for Vanguard index funds). I just straight out own shares.

Vanguard has a low etf equivalent for nearly every MF they offer...

I gave you all plenty of warning.
Now, here comes the Depression.

Shaman says

I gave you all plenty of warning.
Now, here comes the Depression.

What happened?

Shaman says

I gave you all plenty of warning.
Now, here comes the Depression.

Dow is still almost at 26k as I type this. Did I miss something newsworthy? Not being a dick, I just still don't see a depression coming besides a war breaking out at this point. Almost everyone has the same or more money to spend now than they did 5 months ago. They're going to spend it. Certain industries will be fucked though for sure. Cruise lines and commercial real estate are top of mind.

WookieMan says

Certain industries will be fucked though for sure.

Big cities are fucked too. Their reliance on consumption taxes is getting thrown back in their faces.

1)lockdowns coming back in some states
2)businesses continue to fold
3)unemployment increasing not decreasing
4)insane orders from governors creating chaos
5)25-30% of renters not paying and haven’t been paying
6)40% of businesses not paying rent
7)housing dipping down (7% so far)
8) banks were propped up by stimulus but beginning to falter as mortgage delinquencies rise dramatically
9)no stimulus on horizon, Congress still AWOL
10)shipping traffic way down Due to lack of demand
11)education mafia trying to get paid without serving the community
12)second race riots on horizon
13) federal $600 unemployment runs out in two weeks.
14)states out of money and borrowing to sustain spending.

Shaman says

5)25-30% of renters not paying and haven’t been paying

Shaman says

6)40% of businesses not paying rent

Shaman says

10)shipping traffic way down Due to lack of demand

Shaman says

7)housing dipping down (7% so far)

I'm not sure where you're getting this info, but I've yet to see any of the quoted stuff happening around me. You have any links? My SIL is the only one I know not working and she lives with MIL. Everyone has been busier than usual to be honest. My primary network is in the line of work for real estate and construction (housing, infrastructure, municipal engineering, etc). My one buddy is in textile marketing (hats, shirts, etc) and he's as busy as can be. Another does office IP phone systems and he's working more hours than ever.

I'm very anecdotal in my observations and making decision about how things are going. I live along a busy train line (BNSF) and unless the amount of cars are less, the frequency hasn't changed. Corp. jets at the local airport. During 2008 that was one of the first things to disappear. No closed down restaurants. If you can't pay the rent, you're not buying product to cook. Lots of help wanted signs. My Toyota buddy tells me their sales are fine. Just a slight dip when this all first came around. They're struggling to get sales people at dealerships to handle demand because of the $600/wk.

Commercial real estate and government debt is going to be where the problem is. I just don't think it's going to be that big of a problem for now. I worry about next year, but I'd be hesitant to pull out of anything now. At least collect a dividend on a blue chip stock/fund with a safe amount of money.

I personally thought we were going to see 12-15k on the Dow at some point early on in this Covid BS (May/June). I'm not really seeing it now, but I could be wrong. It really makes no difference to me at my age though, so maybe I'm naive. We're pumping money into the market with each check. It will be worth more in 20 years and pump out dividends over that time that just get reinvested. If anything a downturn helps my family, so maybe I'm not the best person to listen to.

History shows again and again
How nature points up the folly of man
Stimunculus!

WookieMan says

My SIL is the only one I know not working

My SIL lost high paying corporate job at Marriott HQ. BIL lost high paying IT job.

WineHorror1 says

WookieMan says

My SIL is the only one I know not working

My SIL lost high paying corporate job at Marriott HQ. BIL lost high paying IT job.

Winehorror, where was the BIL doing IT? I'm curious as to what industry that was affected.

I've been dead busy. I'm currently working 2 full time jobs (both remote and can juggle, one ends August). My online company just had a killer month and my wife's company had her best month ever in the last 6 years in March. I wonder depends what industry we're talking. My BIL is a realtor and says he's still selling homes.

I don't know anyone unemployed from this, but I do know a few in the medical industry who's hours have been cut severely.

WineHorror1 says

WookieMan says

My SIL is the only one I know not working

My SIL lost high paying corporate job at Marriott HQ. BIL lost high paying IT job.

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High paying is a relative term currently though. You get your usual unemployment benefits which is not full pay, but still a decent amount. Then plus the $2,500ish a month. They may not have received the one time stimulus I suppose, but if you're at that level of income, you didn't need it.

I'm not saying people aren't losing jobs. But in rare cases do you make less being unemployed until the end of this month when you factor in the median family income is something like $60k. And if you lose a truly high paying job you should be able to handle it. You were paid the big bucks in most cases because of your skill. Go get another job or collect a lower UE check and figure it out.

I'm not trying to be a dick, I'm just simply stating that it's not that bad here in IL of all places. I think coastal areas, if that's where you are, are getting hit much harder because of the high COL. When your $150k job goes away and you have a $600k mortgage, I get it's probably going to get tight. Hence why you don't live in those areas and make $150k somewhere else with a $200k mortgage. And then spend $10-20k per year to travel to those places and enjoy them. Then bank the rest. I love CA, but will never live there for the reasons just stated.

You guys crack me up.

It was about a year a half after the fall 1929 stock market collapse before folks began to realize they were living in something worse than what we now call a "recession".

Party On, Hipsters.

WookieMan says

I worry about next year

B.A.C.A.H. says

It was about a year a half after the fall 1929 stock market collapse before folks began to realize they were living in something worse than what we now call a "recession".

That's why I made the above comment. Consumption tax states and municipalities (sales tax, amusement, etc.) are going to be hurting. How they're dealt with is going to be interesting. Outside of that, our economy has a lot of bend to it without breaking due to monetary policy. I've yet to see any fatigue in the bending is all I'm saying. September is going to be an interesting month when we see the fall out of the $600/wk dropping off the balance sheets of business revenue.

joshuatrio says

Winehorror, where was the BIL doing IT? I'm curious as to what industry that was affected.

Oracle

WineHorror1 says

joshuatrio says

Winehorror, where was the BIL doing IT? I'm curious as to what industry that was affected.

Oracle

He can try at communication sw/hw co. they are still hiring.

Blue says

He can try at communication sw/hw co. they are still hiring.

What company is that?

WineHorror1 says

Blue says

He can try at communication sw/hw co. they are still hiring.

What company is that?

Any co. working on video conferencing sw products or hw co. that supply gear. There is a great demand. I'd try at cloud or data center hosting co. Try at Cisco, marvell and competitors. Amazon is hiring a lot, also Facebook.

I can see that a rational analysis would have called for the stock market to fall, and still seems plausible.

But "the market can remain irrational longer than you can remain solvent" as they say.

Patrick says

I can see that a rational analysis would have called for the stock market to fall, and still seems plausible.

It's rational, but in normal cost areas, things are doing okay at worst all things considered. I'm sure there's more doom and gloom out in CA with the higher incomes and higher COL. I'd guess 7 in 10 people laid off in the midwest and south are making more money than they were employed in the fields hardest hit. Well maybe not oil, but that's one of the few.

August will be the month to watch going into September. Once that $600/wk dries up, people are going to want their jobs back and to open back up. If that doesn't happen, expect unrest from the commoners that has nothing to do with skin color for once. People want their money, even if it involves working for it.

If we hit say August 15th and states are still trying to lock back down, then we're in territory that gets scary. People can't work with kids at home. A month or two was one thing, but losing the $600/wk and having to take care of kids all day is a big deal. It would require another stimulus round or we're forced to completely open back up and deal with the consequences.

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Here is how I came across Patrick.net: https://abcnews.go.com/Nightline/story?id=3731415&page=1

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WookieMan says

If we hit say August 15th and states are still trying to lock back down

They are trying to further sink the economy so that even a slight improvement will make President Biden (and his unelectable Vice President) look brilliant and effective.

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ad says

WookieMan says

If we hit say August 15th and states are still trying to lock back down

They are trying to further sink the economy so that even a slight improvement will make President Biden (and his unelectable Vice President) look brilliant and effective.

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Biden won't be elected though. There were vocal people I knew for Hillary in 2016. All I hear is crickets for Biden right now. Most intelligent people understand that a virus has nothing to do with Trump.

Notice that even the left here don't even stick up for Biden. The Democrats are so divided within their own party that turnout is going to be a problem outside of CA, NY, IL, etc. We're under 4 months from an election against what the left deems to be Hitler. I'm in a purple county that should be important to Biden as I'm not certain IL can't be flipped in all seriousness. I've yet to see a single Biden sign. Hell, I haven't even seen one yet in the midwest that includes two trips up to WI. A super important state for Biden.

In '08 all I saw was Obama stickers, flags and graphics everywhere. Rural and urban. The Democrats don't believe in Biden and I'm still convinced he won't make it to the convention or election day.

The stock market is largely influenced by interest rates.

Evidently people think something else matters as much.

Some guys have new cash to invest; they are in the Philippines, Mexico, Singapore, China, etc.

They are going to invest it, not buy sucker CDs.
So, is it bonds or stocks?
Their decision is based on interest rates.

It's not complicated, but it is not interesting.
I just made $ with my Roku stock.
My Wells Fargo stock is still a mile underwater.
Buffet said he just loved Wells.

clambo says

Buffet said he just loved Wells.

I've always had a problem with Banking Stocks.

Just what is it that you own?

In the upside down world of banking, loans (debt) are assets and deposits (cash) are liabilities. Go ahead and call me stupid, Hipsters. Sticks and Stones. For investing, I just can't wrap my simpleton head around it.

Payback is a bitch and Fed chairman Powell is going to rain shit bombs on trump and trump's economy for all the ridicule his big mouth has dished out.
Over 9 Trillion has already been handed over to the banking/trading houses since 9/2019-3/2020, bonds bought and monetized by Powell and his buddies and the market flush with Fed money so the zombie business corporate leaches could sell their stock to retail and their bonds to the fed and be positioned and all set when the money flow is cut from the spigot... Federal Reserve, the most powerful corporations in the world and DNC are all globalist when the dots are connected and all are equal with the same goals ... Powell's moves have not been to save Trump and the markets in my opinion, but rather to save the entities I listed before the liquid runs dry and the cash is gutted.

Markets don’t seem rational right now. Or maybe news are just fake. So hard to tell what reality is.

BACAH I largely own mutual funds, but I have a few stocks.

A stock which I have bought a couple of times is Apple AAPL. The last time I bought it was before the 7:1 split and I am not buying it except for the shares the dividend buys for me.

In 2017 I inherited some shares of Wells Fargo WFC, Microsoft and some others.

I sold all but Microsoft and Wells Fargo, out of laziness I kept most of the WFC shares. I also believed the Buffet hype.

I sold a little bit of the Wells Fargo and bought Ailbaba, John Deere, and Roku.
Those are doing much better than the WFC I sold to buy them.

I don’t like owning stocks so much as mutual funds, except for Apple.

WookieMan says

It would require another stimulus round or we're forced to completely open back up and deal with the consequences.

OPEN BACK UP YOU SACKS OF FUCK!!!

Shaman says

Look, our economy was heavily based on service jobs already which is where we stashed the underclass, there to be our servants when we wished luxury and convenience. Now we have abandoned them and withdrawn to our castles to await the coming of the great vaccine and these people are left in the cold without a job and with the businesses that employed them folding by the thousand every day.
Now big corporations are frothing at the mouth to raise shareholder value by laying off white collar workers who survived the past three months working from home. Come September, they’ll have the green light. Come September, a whole fuck ton of teachers are also going to get the pink slip. And we will still be in a pandemic with media hyping the fear to the moon.
Think that will be good for the economy?
The stock market bounced back based on ONE CALCULATION! That we were going to have a V shaped recovery, and everything would be back to normal by summer or at least by Fall. As that...

Teachers are still teaching .... trump already said
Everyone is going back to school in the fall. Even CA schools are doing a hybrid schedule where teachers work full days and kids go halftime smaller classes. Not sure why that means teacher pink slips. If anything they will need more money and resources to prep things for Covid.

Just kidding.... by late September early October... schools will get shutdown with the first signs of flu season. Then the shit will truly hit the fan.

Whoever sold missed out on glorious gainZ

Once the election is over, virus drama will be over too.

BayArea says

Whoever sold missed out on glorious gainZ

- said so many Hipsters in April 1930

B.A.C.A.H. says

- said so many Hipsters in April 1930

Whether you like it, or not, the Fed will buy up the entire stock market if it has to, to support asset prices. It's a little more talented than the 1930's Fed, which has been attributed with causing the crash back then.