Stock Market 2022 except we just talk about stocks

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We'llBeDoneIn15Minutes said:
I don't understand how you diminish total premium by rolling? I roll at the same strike so the only result has to be increasing total premium. I think it's stuck in a trading range for a while and collecting risk-free premium is easier than timing the bounces (I understand capital gains in stock price are capped with covered calls, but the premium in your pocket is yours forever). Tech stocks like Amazon pay nice premiums. Other stocks often not worth it, very low premiums.
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oh maybe i worded it poorly. i meant what you said with premium getting less and less significant. when do you like to let it expire? or do you always roll
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anbuitachi said:
oh maybe i worded it poorly. i meant what you said with premium getting less and less significant. when do you like to let it expire? or do you always roll
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I try to not sell calls after a sell off. Best after a runup for obvious reasons, higher call price. If the stock drops way back I let sold calls expire or even buy it off if cheap enough so the stock is free again. Only once had the stock run away (up) too far that holding it made little sense. So I bought the calls and sold the stock.

I don't have covered calls on everything I own (mostly tech stocks). Just depends on option prices and what I think of the stock (breaking out, treading water etc). Market could run up in a mania 20-30% this year and I'm ok capping my gains and being more conservative because by historical measures it's still a very rich market. I have a fair amount of cash in bonds, and gold. The last 40 years are incredible unlikely to be the next 40 years.
 
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We'llBeDoneIn15Minutes said:
I try to not sell calls after a sell off. Best after a runup for obvious reasons, higher call price. If the stock drops way back I let sold calls expire or even buy it off if cheap enough so the stock is free again. Only once had the stock run away (up) too far that holding it made little sense. So I bought the calls and sold the stock.

I don't have covered calls on everything I own (mostly tech stocks). Just depends on option prices and what I think of the stock (breaking out, treading water etc). Market could run up in a mania 20-30% this year and I'm ok capping my gains and being more conservative because by historical measures it's still a very rich market. I have a fair amount of cash in bonds, and gold. The last 40 years are incredible unlikely to be the next 40 years.
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Agree. Pretty much do similar.
 
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anbuitachi said:
haha 95 strike here as well.
i dont think amazon earnings will be good, but who knows. direction of this rally will depend on earning season imo, barring any major macro stuff.


but who knows. bitcoin skyrocket to 21000. market changing maybe
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Have you rolled the calls yet?
I took the bird in the hand a week or so ago pre-earnings and rolled to April 95 for 2.5 pts, 16% annualized. Just looked and rolling out to Apr 95 go for 3.5 pts, 22% annualized. That's a really nice return I'd take any day. With no earnings before April I'm going to try to hold this time till the last week before expiration.
 
We'llBeDoneIn15Minutes said:
Have you rolled the calls yet?
I took the bird in the hand a week or so ago pre-earnings and rolled to April 95 for 2.5 pts, 16% annualized. Just looked and rolling out to Apr 95 go for 3.5 pts, 22% annualized. That's a really nice return I'd take any day. With no earnings before April I'm going to try to hold this time till the last week before expiration.
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yea i did. but waited too long. amazon skyrocketted due to meta earnings. didnt get much. too expensive to buy back rolled from 2/3 to 2/17, so 2 weeks hahaha. it looks like the 2 week roll was only .82 (but still would be 10+% return annualized so i'll take it )

you already rolled to april?? 2 months?

are you holding onto amazon long term?? im thinking once it gets back to close to 95 i'll just let them expire depending on the environment
 
anbuitachi said:
yea i did. but waited too long. amazon skyrocketted due to meta earnings. didnt get much. too expensive to buy back rolled from 2/3 to 2/17, so 2 weeks hahaha. it looks like the 2 week roll was only .82 (but still would be 10+% return annualized so i'll take it )

you already rolled to april?? 2 months?

are you holding onto amazon long term?? im thinking once it gets back to close to 95 i'll just let them expire depending on the environment
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Yes I would like to eventually hold long term. Typically a crash doesn't immediately turn around so I want to roll calls for a while. This time could be different, who knows.

So you're only at 2/17. Yeah there's really nice premium to had from that point forward.
 
GassYous said:
You mean the guys who can't consistently beat the market and make their money from taking huge chunks of principal?
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Yes they can’t beat the market that’s why wealthy investors give them their money to lose it, makes sense.
 
forchinet121 said:
Yes they can’t beat the market that’s why wealthy investors give them their money to lose it, makes sense.
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It's a well known studied fact they do not consistently beat the market. It doesn't matter who gives them their money and why they give them their money.
 
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forchinet121 said:
Yes they can’t beat the market that’s why wealthy investors give them their money to lose it, makes sense.
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Yes, wealthy people never make extremely boneheaded personal wealth management decisions

Screen Shot 2023-02-07 at 5.12.05 AM.png
 
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We'llBeDoneIn15Minutes said:
Yes I would like to eventually hold long term. Typically a crash doesn't immediately turn around so I want to roll calls for a while. This time could be different, who knows.

So you're only at 2/17. Yeah there's really nice premium to had from that point forward.
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i have too much in amazon considering how tiny my total portfolio is.

what else are you rolling?
 
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anbuitachi said:
i have too much in amazon considering how tiny my total portfolio is.

what else are you rolling?
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Been rolling Google 100's for a few months which today look really good with the 9 point pullback. I need to sit back and relax and stop taking the bird in the hand and wait closer to expiration. Risk is the stock moves too far away by then, but the reward is much greater if the price remains near strike. I'm rolling way too early.
 
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Any Pepsi fans? Good earnings report today. Picked it up a few days ago at a 10% discount off the high. Excellent near term trade prospects to upper 180s, and if the trade channel fails, as often the best plans do, I love it as a long term hold that I've had an eye on for a while. That's a serious lower left upper right 50 year chart.
 

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We'llBeDoneIn15Minutes said:
Any Pepsi fans? Good earnings report today. Picked it up a few days ago at a 10% discount off the high. Excellent near term trade prospects to upper 180s, and if the trade channel fails, as often the best plans do, I love it as a long term hold that I've had an eye on for a while. That's a serious lower left upper right 50 year chart.
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roll your pepsi?
 
anbuitachi said:
roll your pepsi?
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Nope haha. Can't roll everything.

Earnings are done. They were good. Has a nice one year channel and heading back up. Hoping for a 15 or so pt net short term pop (in at 171).

Now, if that falls apart and turns into a solid long term hold (historically great company and stock), sure I'm open to looking at some nickels and dimes on out of the money calls with a strike price I'd be happy to sell.
 

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For the folks looking to max out their kids' 529s for this (and each) year (just under 15k to avoid gift taxes), is there any logical argument for not doing it all at once in a lump sum ASAP? In theory, DCA'ing is just to ease the emotional toll since we don't know if each installment will be at a higher or lower price, markets already look forward 6 months, none of us know anything the market doesn't, etc.

Also, in an inflationary environment where assets grow continually more expensive (and dollars lose purchasing power), wouldn't compression of earnings and the downward pressure it creates on valuations potentially be offset by the inflationary pressure on assets (stocks being an asset), leaving us with stagflation/sideways movement in the markets?
 
gasdoc77 said:
For the folks looking to max out their kids' 529s for this (and each) year (just under 15k to avoid gift taxes), is there any logical argument for not doing it all at once in a lump sum ASAP? In theory, DCA'ing is just to ease the emotional toll since we don't know if each installment will be at a higher or lower price, markets already look forward 6 months, none of us know anything the market doesn't, etc.
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just dump it in
 
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sevoflurane said:
5 year performance is trashView attachment 365740
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That is such a tough call. Are the glory days over or is it that time when the last holdouts like yourself dump signaling consolidation may be wrapping up and finally time to ride up again.

Microsoft was low 30s in 2000 and still low 30s in 2013.... then it went to 300s. Who knows when that next ride comes for sure. Could always split the difference somewhat and sell and roll the AMZN 95 calls like a couple of us are doing. Very rich premiums.
 
We'llBeDoneIn15Minutes said:
That is such a tough call. Are the glory days over or is it that time when the last holdouts like yourself dump signaling consolidation may be wrapping up and finally time to ride up again.

Microsoft was low 30s in 2000 and still low 30s in 2013.... then it went to 300s. Who knows when that next ride comes for sure. Could always split the difference somewhat and sell and roll the AMZN 95 calls like a couple of us are doing. Very rich premiums.
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Maybe back to 30s haha
 
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Diversification in the 529 plan. Did you guys ever hear of VALUE ETFs? Perhaps, the next 3 years VALUE will outperform growth significantly as a reversion to the mean. That means a combination of Value ETFs including small cap value. The days of 15% returns are likely over except for those who can catch a giant move in Tesla or another high flyer. Investors need the diversification while traders need a growth stock like Tesla, NVidia, AMD, etc for those big moves.

Look at the VALUE trade as interest rates go to 5.25% and stay there. Look for the GROWTH trade 6-8 months prior to the Fed cutting rates in late 2024.
Even then, Value still makes money albeit at a lower rate when the Fed is cutting rates.


https://www.lazyportfolioetf.com/etf/ishares-sp-small-cap-600-value-ijs/

iShares S&P Small-Cap 600 Value (IJS): which are the historical returns and the worst drawdowns? Is it a good choice for your portfolio?
www.lazyportfolioetf.com www.lazyportfolioetf.com

In the last 30 Years, the iShares S&P Small-Cap 600 Value (IJS) ETF obtained a 10.85% compound annual return, with a 19.03% standard deviation
 
We'llBeDoneIn15Minutes said:
That is such a tough call. Are the glory days over or is it that time when the last holdouts like yourself dump signaling consolidation may be wrapping up and finally time to ride up again.

Microsoft was low 30s in 2000 and still low 30s in 2013.... then it went to 300s. Who knows when that next ride comes for sure. Could always split the difference somewhat and sell and roll the AMZN 95 calls like a couple of us are doing. Very rich premiums.
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I won't dump it all. Just rebalbance a good chunk into somehting else. I own way too much in both stock and etf's.
 
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TSLA has a valuation that is higher than all legacy automakers combined. Put a crazy valuation with a sleazy CEO and it seems like a great short opportunity on the surface. When the market unravels these high flying stocks will have a lot of downside
 
I still think stocks are over-valued at 4100 but I am happy my portfolio has recovered most of the losses. But, with the Fed raising rates another 0.25% in May and earnings coming in weaker than expected, I think the market is looking past the mild recession and towards 2024. The fed will likely pause after the next hike and earnings becomes the focus this summer. A pull back to 3800 is still in the cards so be ready to buy when the VIX Spikes and all the talking heads predict doom and gloom for stocks.

I am a long term bull as inflation falls to 4% by the end of 2023. As long as the Fed will allow 3.5-4% inflation stocks should do well in 2024. Inflation is sticky around 4% so it will take most, if not all, of 2024 to see inflation drop below 3%. I'm hoping the Fed leaves rates at 5% but the market has mispriced rate cuts going into the Fall of 2023. There won't be any rate cuts in 2023 unless the economy tanks and that means stocks will be below 3600 if not 3400.

I am still purchasing Treasury Bills and Intermediate bond funds as interest rates are about to peak in May.

www.cnbc.com

Jamie Dimon issues warning on rates: 'It will undress problems in the economy’

Higher rates jammed up swaths of the economy this year, from bankers who bet on low rates to consumers who can no longer afford mortgages or credit card debt.
www.cnbc.com www.cnbc.com
 
BLADEMDA said:
I still think stocks are over-valued at 4100 but I am happy my portfolio has recovered most of the losses. But, with the Fed raising rates another 0.25% in May and earnings coming in weaker than expected, I think the market is looking past the mild recession and towards 2024. The fed will likely pause after the next hike and earnings becomes the focus this summer. A pull back to 3800 is still in the cards so be ready to buy when the VIX Spikes and all the talking heads predict doom and gloom for stocks.

I am a long term bull as inflation falls to 4% by the end of 2023. As long as the Fed will allow 3.5-4% inflation stocks should do well in 2024. Inflation is sticky around 4% so it will take most, if not all, of 2024 to see inflation drop below 3%. I'm hoping the Fed leaves rates at 5% but the market has mispriced rate cuts going into the Fall of 2023. There won't be any rate cuts in 2023 unless the economy tanks and that means stocks will be below 3600 if not 3400.

I am still purchasing Treasury Bills and Intermediate bond funds as interest rates are about to peak in May.

www.cnbc.com

Jamie Dimon issues warning on rates: 'It will undress problems in the economy’

Higher rates jammed up swaths of the economy this year, from bankers who bet on low rates to consumers who can no longer afford mortgages or credit card debt.
www.cnbc.com www.cnbc.com
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any thoughts on the housing market? Lease ends on 6/30 but have the option of staying in an empty family house 1.5 hrs away if needed for short term. Market already feels different but overpriced. Would love to see some correct in the next 3-4 months.
 
finalpsychyear said:
any thoughts on the housing market? Lease ends on 6/30 but have the option of staying in an empty family house 1.5 hrs away if needed for short term. Market already feels different but overpriced. Would love to see some correct in the next 3-4 months.
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Housing prices have leveled off but I doubt they correct much. There are too many people looking to buy vs too few homes on the market. Home builder stocks are doing just fine with high interest rates and a slowing economy.

If you want to buy a home I actually think the best strategy is to buy one soon then refinance in 1-2 years when rates fall back to around 5-5.5%. If you wait to buy a home when rates actually fall in 2024 then home prices will be up 5-7% from here as demand surges.

There are too few homes being built for the number of buyers out there and that dynamic won't be changing for at least several years. This is much different than the commercial real estate market where the surplus of properties exceeds buyers/tenants.
 
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BLADEMDA said:
Housing prices have leveled off but I doubt they correct much. There are too many people looking to buy vs too few homes on the market. Home builder stocks are doing just fine with high interest rates and a slowing economy.

If you want to buy a home I actually think the best strategy is to buy one soon then refinance in 1-2 years when rates fall back to around 5-5.5%. If you wait to buy a home when rates actually fall in 2024 then home prices will be up 5-7% from here as demand surges.

There are too few homes being built for the number of buyers out there and that dynamic won't be changing for at least several years. This is much different than the commercial real estate market where the surplus of properties exceeds buyers/tenants.
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Even if we hit a recession in the next 6-12 mo? Maybe I found a good lender i got 5.7% for a 30 year conventional through chase as of now.
 
finalpsychyear said:
Even if we hit a recession in the next 6-12 mo? Maybe I found a good lender i got 5.7% for a 30 year conventional through chase as of now.
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A recession means lower 15 and 30 year mortgage rates most likely spurring demand for homes. I think you buy now then refinance down the road. By the way, 5.7% is still lower than my first mortgage of 7%.
 
BLADEMDA said:
A recession means lower 15 and 30 year mortgage rates most likely spurring demand for homes. I think you buy now then refinance down the road. By the way, 5.7% is still lower than my first mortgage of 7%.
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People are used to the 3% we had before, which will not happen anytime soon.
 
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finalpsychyear said:
any thoughts on the housing market? Lease ends on 6/30 but have the option of staying in an empty family house 1.5 hrs away if needed for short term. Market already feels different but overpriced. Would love to see some correct in the next 3-4 months.
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around me when the summer is over, negotiations are more in your favor as a buyer. most people want to get in before summer is over so there kids can start the school year. if you can wait until august/september to find a place and close in the late fall
 
BLADEMDA said:
A recession means lower 15 and 30 year mortgage rates most likely spurring demand for homes. I think you buy now then refinance down the road. By the way, 5.7% is still lower than my first mortgage of 7%.
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When houses cost 100k and you didn't need a mortgage?
 
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GassYous said:
When houses cost 100k and you didn't need a mortgage?
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Spot on. It really blows when houses your looking at approach 800-900k and close to 6 percent interest rate. That's 40k in just interest i would pay per year. Add in property tax and home owners and we are talking 6000-7000 mortgage per month for 800-1m houses with 20 percent down.
 
finalpsychyear said:
Spot on. It really blows when houses your looking at approach 800-900k and close to 6 percent interest rate. That's 40k in just interest i would pay per year. Add in property tax and home owners and we are talking 6000-7000 mortgage per month for 800-1m houses with 20 percent down.
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And keep in mind these million dollar homes were 700 just 3 years ago
 
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there has to be some mean reversion once the supply is restored. That's the big issue.
 
dabears505 said:
And keep in mind these million dollar homes were 700 just 3 years ago
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It's crazy. I wish I was out of residency before 2019. I could have made so much $$$. I know someone who bought a house for 540k June 2020 in south FL and the same house worth 940k in less than 3 yrs. WTH
 
finalpsychyear said:
Spot on. It really blows when houses your looking at approach 800-900k and close to 6 percent interest rate. That's 40k in just interest i would pay per year. Add in property tax and home owners and we are talking 6000-7000 mortgage per month for 800-1m houses with 20 percent down.
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Not wrong. Did 10% down on $1M, which gives me a monthly mortgage + escrow of $5450.

Edited for correct numbers.
 
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Splenda88 said:
it ain't going to happen
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Agree too. Probably in fly-over states it may dip a bit, but in general from my observation most desirable areas are still undersupply and cash-rich individuals are still buying those homes to avoid the interest.

Unrelated, looking for SPY to possibly correct down to 394 ish and sell some puts.
 
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