Check this out.............

[ragerover]

People who are filthy rich buy the 'cheap' Ferraris at $200-$300k, F430 etc., just so they can stay at the top of the "F-list" (see this weekend's WSJ). That allows them the option to buy the rare car like an Enzo - that IS likely to be collectible.

Interesting stuff Brad! I believe you had to have purchased at least 3 Ferraris to even be put on the list for the Enzo. And that was not a guarantee you would be sold a vehicle. Similar story with the PAM203.

And currencies: that's one of the riskiest games in town, even the pros have a hard time making steady trade returns (which is why I don't hedge more than 50%).

I try not to hedge more than 50% anymore either. I'd love to learn more about currency, but don't have the time between medschool and the watch forums Risk arbitrage has always fascinated me. Remember LTC? Black–Scholes? Covered calls is my game. Been doing that for a while. I like to hedge a bit, sell calls, then throw the call money back in to buy more or just keep the keep money to offset and reduce the credit.

Some 45% of the S&P's long-run returns has come from *dividends*.

Once again, true. But why not hedge on top of the dividend paying stocks by selling calls on it? Although most of what I own is not dividend paying. History shows that non-dividend paying companies grow faster (i.e. stock goes up quicker). Although dividend paying stocks tend to be "safer" (i.e. less volatile). Due to decreased volatlity, calls usually don't pay much. But every few % helps in the long term.

But what do I know? I'm not in the finance industry. Just my $0.02.

 

[bigbadbrad]

OK - won't post any more on this investment stuff here

Remember LTC? Black–Scholes? Covered calls is my game. Been doing that for a while. I like to hedge a bit, sell calls, then throw the call money back in to buy more or just keep the keep money to offset and reduce the credit.

OK - we're getting waaaay off-topic ... my last post in this thread on investment, PM me if you have a general query.

I did my undergrad honours thesis on BSOPM implied vol. The BSOPM has issues. Too much for the board! LTC is elegant testimony to the long-tailed event, in layperson's terms, the part of the 'iceberg' that you don't see (model risk). It also goes to show that raw brainpower - Nobel prizewinners - does not preclude a firm from 'blowing up' from converging risk vectors. I saw Scholes at a uni seminar - early 90s (he's passed now).

History shows that non-dividend paying companies grow faster (i.e. stock goes up quicker). Although dividend paying stocks tend to be "safer" (i.e. less volatile). Due to decreased volatlity, calls usually don't pay much.

I will answer this. That's what most believe. But empirically it's just not true in aggregate.

I'm not putting you down mate You clearly know a lot of stuff. I too believed the 'div not equal to growth' myth until I read the lit. on it.

BTW, one of the authors ( [2] below), Asness, runs AQR Capital, a huge hedge fund - and Arnott has about $10B in his fast-growing firm, Research Affiliates. The nexus of high growth of earnings and no divvy is a popular furphy. I'm also making the point that the authors are not necessarily 'ivory tower' academics - they run serious $$$ (more than $20 B).

See:
[1] Dividend Payout and Future Earnings Growth
Financial Analysts Journal
Ping Zhou, CFA, and William Ruland
May/June 2006, Vol. 62, No. 3: 58-69

and

[2] Surprise! Higher Dividends = Higher Earnings Growth
Robert D. Arnott and Clifford S. Asness
Financial Analysts Journal, Jan 2003, Vol. 59, No. 1: 70-87.

 

[ragerover]

Thanks for the info Brad. If you ever want to email me your thesis, my semester ends in about 6 weeks I need something to keep myself busy over Dec & Jan.

I think there is more brain power on this board than Panerisiti & The Purists combined...which is how this thread got started in the first place!

Regards, Dave G

 

[efnstefn]

Interesting digression from the topic.....

BBB, Are you a CFA or some whacky Wharton MBA academic type of cat?

Let's ponder the tranfer of risk over the past few decades from institutions to private investors through the securitization of home mortgages. I define "institutions" as those holding mortgages assets on balance sheet versus "private investors" as those purchasing mortgage backed securities in this example. Considering the high probability that mortgage defaults will increase as variable rate products originated over the past five years reset (in combination with stagnating real estate prices), there is also a high probability that mortgage backed securities will suffer the same fate due to resultant reduction in cash flows. As such, private investors wll take the brunt of the losses and compound the drag on the economy incurred by the initial mortgage defaults.

Would you consider the above an accurate statement? Please consider the adequecy of risk managment through utilzation of historic static pool default analysis in your answer.

_____________

If that doesn't make a finance junkie chuckle, I don't know what could possibly tickle your funny bone.

 

[Cucumber_Jones]

Yes we would all be amazed at the brain power here. I think we have all walks of life at RWI. I have to say I totaly agree with

Some 45% of the S&P's long-run returns has come from *dividends*.

I put this right next to "The only way to create long term wealth is by protecting capital". That is the quote I have created based on seeing many stupid things in the ivestment world.

 

[Cucumber_Jones]

Considering the high probability that mortgage defaults will increase as variable rate products originated over the past five years reset (in combination with stagnating real estate prices), there is also a high probability that mortgage backed securities will suffer the same fate due to resultant reduction in cash flows. As such, private investors wll take the brunt of the losses and compound the drag on the economy incurred by the initial mortgage defaults.

This is what my main worry is these days. I have heard many well educated thinkers say this is not a worry - but I don't buy it.

In Canada we are now seeing 40 amortiziation products and no-down payments. It is not as wild as it is in the US but I do not like the trend of these products. I think lenders are creating a major problem.

PS - Let me know if you want this topic split.

 

[efnstefn]

Honestly, I was being a bit of an i-banker wiseass with that mortgage default post, but it really is a serious topic. I think that the home mortgage industry has set not only itself, but many investors in their mortgage backed products, for a huge fall which will cause serious harm to the economy.

Good God, a 40 year am with no money down?? That compares to these negative am mortgages here in the US. Seriously bad stuff!!

OK, that's enough from this buzzkiller.

 

[Cucumber_Jones]

The term "negitive amortization" make me nauseous and weak in the knees.

 

[bigbadbrad]

The term "negitive amortization" make me nauseous and weak in the knees.

Especially if one faces it!

(not you CJ!)

 

[Finepics3]

I'm about to post a reply on the Paneristi as I'm sick of listening to their bollocks - and I really don't give a monkeys fuck about it either - what can they do - ban me!!

 

[panman8888]

more power to you!

I'm about to post a reply on the Paneristi as I'm sick of listening to their bollocks - and I really don't give a monkeys fuck about it either - what can they do - ban me!!

i say freedom of opinion and speech are pretty damn important, so if the spirit moves you, go for it, mate!

having said that, you will never change them and they will never change you/us. to each their own. it's amazing to me that they openly will have their gen 005's dlc'd to look like a 195. or will work on 6152 projects. but at whatever their arbitrary line is, they will condemn "reps".

i like the info on that site--bar none, the best concerning gen pan's--but i have a lot more fun here! being the owner of both gen and rep pans, i laugh at everybody who doesn't indulge in the best of both worlds. a closed minds makes the world a (more) limited place.

 

[Klink]

It would be good of you not to use same screen name there as here...
just saves problems from happening..



Life is Good!
Klink

 

[seraphe]

I'm about to post a reply on the Paneristi as I'm sick of listening to their bollocks - and I really don't give a monkeys fuck about it either - what can they do - ban me!!

I felt exactly the same too... and that's when I KNOW I've crossed to the "DARK SIDE".

(And ironically, the DARK SIDE is more ENLIGHTENING... )

 

[Klink]

OK, back on topic!

$$$ Easy way to go to Vegas and come back home
with small fortune!! :


































Simple, go with BIG one..

(is famous 'negatory amortize' thing...)

 

[Finepics3]

Well I had a little restraind pop at them - I actually thought (but might have been wrong) that Guillermo was the same as Guilles on the Panereh who had thrown a load of money at a watchmaker and told him make me a 6152 using an RXW case. I'm certainly not worried about my log in name - what can they do - it's not an offence in the UK to own a rep (suprising actually given our otherwise nanny state). Also the thread is now a few pages down so unlikely anyone will bother to read it now.

 

[Perspex Tropic]

Enlightment, Darkness.....
Are You familliar with the Ancient symbols of Yin & Yang? or The Universal Arch symbol Right & Left revolving Swastika!?

One of their multiple insights is "All is One"! (1)
With out Yin no Yang, No Day without night, War, Peace, Hapiness, Sadness, Inhale, Exhale, Life and Dead (Replica, Geniune :wink

The Right revolving Swastika (Power) can't be seprated form the Left revolving Swastika (Compassion).....Well The Power symbol did help The Nazi's Goal of Conquering the World, But lacking the Compassion of the Left revolving one, they could not sustain Its power.

Replica or Genuine they are connected,
If You want to waste Your energy By fueling The Other sides Fire by Just giving them something to Inflame!
The Fire that revolts the wheels is kept Alive always by two sides, Opinions......

It is al so Relative

 

[babola]

I'm about to post a reply on the Paneristi as I'm sick of listening to their bollocks - and I really don't give a monkeys fuck about it either - what can they do - ban me!!

Mark, not worth the effort, really...I thought about doing the same yesterday but decided not to, stuff 'em I'd say, let them live in their own little world 8)

cheers,
babola

P.S. The plot tickens...there's now mafia and organised crime involved...God, there are some real loonies over there.
http://www.network54.com/Forum/353391/m ... d%21%21%21

 

[takashi]

Hahahah... Am i part of the vice city?

 

[Perspex Tropic]

Let them life their lives in their tiny Exclusive circle,
In Our Small world!