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JustinBustin

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Who fs with stock here? Just read the big short by michael lewis 2x and some supplementary material on reading financial reports/balance sheets/value investing etc. Even a primer by some then 13y/o kid in India who's related to a bunch of financial bigwigs over there. Very eye opening material

wat's in ur PORTFOLIO bros? I don't wanna do anything retarded like support companies that do dumb **** like nuclear and logging, no I am not a tree hugger but it's obv retarded, how can I enjoy good sushi if reactors keep blowing up in the ocean or breathe good air if rainforests keep getting pwned?
 

Tenacity

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Well, right now my investment strategy is diversified between the business I operate as well as safe passive investments including CDs and low risk Bonds.

When you operate a business and do it well, this involves you investing in YOURSELF and putting in Sweat Equity to achieve your returns. If you do this well, you should be pulling at least 100% returns per year from your business. That is the highest potential return you can achieve from ANY investment vehicle EVER created.

I take the profits earned from my business (which are usually around 400% or more) and use them to payback any small amount of short term financing used, pay for my personal expenses, small amount of business expenses, pay for Fed/State taxes due (after slashing them with high amounts of deductions), invest into my Social Security Account, and then put the rest into my passive investments such as CDs and Bonds that I look to target 4% per year currently.

So for example, I use my Credit Cards for short term financing and I receive things such as 0% interest for 15 months with a 1% upfront transaction fee. I take $15,000 out and pay the 1% upfront fee for $150 and invest that into my business office. Within 12 months, I have created revenue of $40,000 already but will also generate most likely another $25,000 in additional revenues over the course of the next 8 months thereafter, for a real revenue creation total of $65,000. I payback the $15,150 which leaves profit of $49,850 before taxes, which is a total return of 332%. I would take about $7,500 of that amount to put into a long term CD or Bond, averaging about 4% per year for 10 years conservatively (which means there should be no losses), allowing me to project another $3,600 from the new interest created over that 10 year period, adding to total overall returns which end up at $53,450.

That's from just one year's worth of work.

I do not invest anything in the Stock Market, the Real Estate Market, or other Alternative markets such as Gold, etc.

- The reason I don't invest in the Stock Market is that I have no FREAKING idea what creates capital appreciation with the Stock Market, and neither does anybody else. If there's no capital appreciation with the Stocks you buy, there's no returns. In a nutshell, the returns are OUT OF MY CONTROL.

- The reason I don't invest in the Real Estate Market is because external forces that you have no control over that surround the Real Estate, make up the major appraised value of the Real Estate. Which means once again my returns are OUT OF MY CONTROL. I could turn the Real Estate into a business through leasing it out however, but which is a totally different strategy that brings upon a number of Tenant risks that again become out of my control.

I invest in what I know and what I can directly control. With Bonds, I choose Bonds that are from companies/agencies that are relatively sound, I hold the Bonds until Maturity and don't do any Trades. This is something I can control and something I fully understand in terms of the return on investment.

For CDs, I search for the highest returning CDs with long term structures such as 10 years. While we all know that CDs are the lowest returning of the bunch, the CDs I pick always beat Inflation due to my careful selection of them.

I'm what you might call a "Very Conservative" investor.
 

evan12

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What is your knowledge level , if it is entry go read "investment for dummies" then "Mutual funds for dummies" then try to invest in some index mutual funds .
dont go to high risk , your heart will not resist that and you might sell it on loss
 

JustinBustin

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thanks for your thoughts. tenacity respect for your work, what type of business do you run? While I appreciate your notion I feel it's become glib to hear sh*t like "oh well f the dollar it has no real value and the fed reserve prints fake money out the wazoo, PLUS all money's digitized, and firms have machines that make millions doing thousands of micro trades on forex every second, so why trust the stock market?" Every loser from obese anime nerds to clueless construction workers talks like this. No I don't like high-nosed sociopaths hoarding wealth but we live in the world we live in, and since being like them sucks I'd rather suck it up and learn the system. low-risk high secruity areas like CDs and bonds are ok but you might not even beat inflation @ 4%. Why not j learn how to read financial statements, learn the stock market and look for low risk high reward returns (only after paying LOTS of due diligence ofcourse?). Like options.


To be honest tho f the stock market im more interested in passive income and a free lifestyle. How did you come upon your business plan? Is it online or off? How much research and time went into it before u got it off the ground and how many people work with you?

thanks for entertaining me loL!
 

Tenacity

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JustinBustin said:
thanks for your thoughts. tenacity respect for your work, what type of business do you run? While I appreciate your notion I feel it's become glib to hear sh*t like "oh well f the dollar it has no real value and the fed reserve prints fake money out the wazoo, PLUS all money's digitized, and firms have machines that make millions doing thousands of micro trades on forex every second, so why trust the stock market?" Every loser from obese anime nerds to clueless construction workers talks like this. No I don't like high-nosed sociopaths hoarding wealth but we live in the world we live in, and since being like them sucks I'd rather suck it up and learn the system. low-risk high secruity areas like CDs and bonds are ok but you might not even beat inflation @ 4%. Why not j learn how to read financial statements, learn the stock market and look for low risk high reward returns (only after paying LOTS of due diligence ofcourse?). Like options.


To be honest tho f the stock market im more interested in passive income and a free lifestyle. How did you come upon your business plan? Is it online or off? How much research and time went into it before u got it off the ground and how many people work with you?

thanks for entertaining me loL!

In regards to what business you start, depends on what you can supply (skills, forecasting ability of a market opportunity, capital, etc.) and what the market is demanding in terms of unmet needs of prospective clients or customers. You want to look at how you will bring something different to the market, what you will charge, what your costs are, etc. to determine if it's a profitable venture.

In terms of the Stock Market, I'm not saying investing in it is bad or good. To be honest, I will more than likely eventually put more of my passive investment dollars into the Stock Market but just under Moderate/Conservative means. I wouldn't seek 25% returns, but relatively conservative returns over time that will average in the 5% - 10% range.
 

guru1000

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The savvy diversify a portion of their investment portfolio into option derivative plays such as credit & calender spreads, iron condors, and diagonals. Note: here you are selling out-of-the money options and collecting premiums, not buying them.

I have created a trading platform using only five securities which generates conservatively 50% - 60% per annum up to $10 MM trading max; irrespective of bull, bear, or flat market. Above $10MM, the derivative markets I use grow illiquid using this methodology; thus, most hedge funds are precluded from engaging.
 

Tenacity

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guru1000 said:
The savvy diversify a portion of their investment portfolio into option derivative plays such as credit & calender spreads, iron condors, and diagonals. Note: here you are selling out-of-the money options and collecting premiums, not buying them.

I have created a trading platform using only five securities which generates conservatively 50% - 60% per annum up to $10 MM trading max; irrespective of bull, bear, or flat market. Above $10MM, the derivative markets I use grow illiquid using this methodology; thus, most hedge funds are precluded from engaging.

Guru,

Maybe you can help me further understand what makes a stock's price increase and what makes it decrease. I have always had a hard time really determining it, it just seems like the Stock Market is totally out of my control as it's based on various variables such as:

- Management of the company
- Ethics of the Management
- The Customers of the company
- The Competitors of the company
- If the company refuses to change and adapt
- If the company's expenses are too high
- If the industry that the company is in, is taking a beating
- If the economy as a whole hits a recession

How does one sit down and determine that this stock's price at $15 will go to $25 by XYZ time? So, I might as well buy 1,000 shares so I can clock in $10,000 by XYZ time? How do people configure this OR....is it nothing but a guessing game?

I run an Independent Sales Office (a business) and my returns are at least 300% per year, that's just per year but not the entire returns, the entire returns off one year of an investment is more along the lines of 500% - 600% due to the repeat business/referrals from that same client that I don't have to spend a DIME on for marketing/acquisition. I have then taken the profits and lived off of them for personal expenses, paying back a small amount of loans, and put the remains into conservative vehicles like CDs and certain Bonds held to maturity.
 

guru1000

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I'm a little drunk now, but I'll share as best as I can in my state, lol:

Stocks trade purely on the law of supply and demand. A stock could have dog-crap financials, poor management, and a dismal outlook, but if the street thinks it’s hot, they will buy it and stock price will surge higher. The key is understanding the street’s feelings about a stock’s trading range. Thus, the most effective means to monitor a stock’s short-term trading range is purely a technical analysis. Fundamentals being the operating financials and future projections of a company, and technicals being the mapping of the support (low-end trading range) and resistance (high end-trading range) of the underlined.

Let’s take Apple for example. The last three months the stock has traded between the range of 117 and 133. What does this mean? Absent any fundamental changes (earning increase/decrease, Feds raising or lowering rates, news that can impact the company’s bottom line, etc.), if the stock trades close to the resistance level of 133, then it’s time to short (profiting from a lower price) the stock. Conversely, when the stock trades closer to the 117-122 range, its support, absent any fundamental change, then it’s time to buy the stock. Some traders use two-week, 1-month, 2-month, 6-month charts to map support and resistance levels. Other traders like to convolute the trading process with esoteric terms/approaches such as mapping the regression line, regression channel, Fibonacci retracements, extensions, time series, time ratios, time extensions, arcs, spans, spirals, pitchforks, fans, circle brackets. The best approach is simple: Study only a few stocks, learn their volatility and trading ranges; then trade based on your studied observations.

Notwithstanding the above, my opinion is technical stock trading is the kindergarten class for the savvy. The savvy trade derivatives, a/k/a options.

In the options market, you are not saddled by directional moves only like stocks; instead you can sell options and collect premiums ($$) if a stock remains within a specific trading range within a specific time—or play directional moves or both.

Here is a derivative play I use often called an iron candor (buying and selling call and put options simultaneously for credit premiums). I opened this position last week in Apple, APPL with way out-of-the-money options:

Sold 20 Apr 24 Calls with Strike Price 145 = $2.1 Credit
Bought 20 Apr 24 Calls with Strike Price 150= $1.3 Debit

Net Credit .8 = $1,600 premium received

Sold 20 Apr 24 Puts with Strike Price 115@ $1.5 Credit
Bought 20 Apr 24 Puts with Strike Price 110 $1 Debit

Net Credit .5 = $1,000 premium received

What this means is that I collected $2,600 in upfront premiums. Nice isn't it?! However, without a stop loss order, my total downside could be $7,400, which is a big chunk to lose in one play. The way this works is if Apple remains within the trading range of $115 and $145 at 4/24/15, I make a $2,600 profit. If it doesn’t, I could potentially lose $7,400. But if I use a stop loss order of 100%, I limit my total downside to $2,600.

Now here’s the key: Apple's 45-day support and resistance levels are between 122 and 133, so my play is 90% likely to work. How do I know its 90% likely? There is a derivative term called delta which is a mathematical algorithm which dictates the likelihood that a stock reaches a specific price within a specific time. The delta--which is public information on any trading platform--shows 10% likely to hit.

I don’t need to wait till 4/24 expiration: I can cash out any time with less profit. In other words, instead of waiting till 4/24 with a $2,600 profit and potential risk should the position work against me, I closed my position and cashed out this Friday with a $1,200 profit, as the stock remained within the range I needed. When I closed my position, I captured the time decay, which was $1,200.

So what does this all mean? Let’s do the math: I utilize stop loss orders on all my plays, so total downside cannot eclipse 100% of the net premium I receive. I will win 90% of the time but usually cash out at 50% or less of the total premium, and lose 10% of the time with a full premium loss. Thus, I net roughly 350% after 10 plays.

Now I don’t utilize my whole portfolio in credit plays as when I trade only one play like above, I tie up $7,400 in that one play until its liquidated. So with a portfolio of plays, most of the monies are tied up in potential downside risks. I also need to keep cash aside to adjust plays that work against me if I wish not to use a stop loss. The above is a super-abridged version, but overall, I’ve been averaging 50-60% per annum on my whole portfolio, with hundreds of plays annually.
 

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Guru,

Excellent information! So you are more on the direct trading side of things, you have your Series licenses?

You seem to have a good grasp on getting the returns within the market and I have heard of options before, but I'm confused on if they work as a hedge for losses or if they work as "stock insurance"? Meaning, if I tie an option in there does it somehow protect my principle or does it just limit how much I can "lose" per say?

Also what do you personally think of my current strategy? Which is to invest most of my available investment dollars into my business, get the 400% minimum returns, from those returns I pay my expenses/taxes and small amount of loan payments, then the rest goes into safe/conservative vehicles like CDs and certain Bonds?

I have been HAMMERED across the internet on Investment Forums for listing out my idea because people say that I'm in my very early 30's and should be heavily in the Stock Market. But I own my own damn business, which provides 400% returns per year, investing in the Stock Market would get me a solid 7% - 10% on average per year over the long haul (10 years at least). Why would I want to do a high risk investment to only get back 7%? And I still do not understand the stock market and what allows me to make money in it, so I would be FORCED to depend on a guy (like you Guru or another Stock Broker or Mutual Fund manager) who says he knows what he's doing but I just cannot tolerate the volatility shyt. Dude I can't log into my investment portfolio and see negatives, I just can't, I have operated my own business since 2007 and I never (I repeat never) have lost any money any year, ever....even as a damn Rookie.

The CDs and Bonds I use average 2.5% - 5% per year, I hold everything until maturity, no trading. The Bonds are conservative as hell and the CDs are long term like 10 year ones. Even with the 2.5% - 5% returns this does beat Inflation, hell that range has been beating inflation since 1999: http://www.usinflationcalculator.com/inflation/current-inflation-rates/

But despite this, the Investment Community still hammers the hell out of me for not investing heavily in stocks.
 

dasein

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Guru's post is an excellent introduction to spreading. Any interested in options can get loads of free information from the CBOE website, even free modular "classes" last I checked. Just don't get "jargon overloaded." The basics of options are very simple for anyone with HS math to grasp. Start there, basics of puts, calls and spreads. Don't worry too much about all the advanced trades or math to start.

Also agree with Tenacity's posts completely. The best investment you can make, if you are at all capable and willing to work, is in your own business. This is also a great way to have a fulfilling, interesting, rich life, regardless if you are making a living or a bundle while doing it. Technology allows you to do this with minimal expense, staff, accounting, legal, until you get established today. You just have to treat it like a job at first, with established work patterns and time.
 

Tenacity

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Dasein,

Right and in my business, I'm an Independent Agent within Financial Services, so that 400% return really is a lot larger as I mentioned because all of the repeat business, renewals, overrides, and referrals I'm compensated on for the lifetime of my relationship with the client. Once you build a certain size portfolio, you can live off of the clients you already have and not work to acquire new accounts, this is what I'm working UP to right now. I have some clients that I have been working with since 2008, which means the profits on that individual client are so high I can't even calculate.

Now, I do realize that everybody can't do this, it requires a level of skill and specialized education. But my question is why does the Investment Community hammer me so much for not putting anything into the Stock market? It's like I feel as though I'm "missing out" on something but I'm trying to figure what that is.

Also when I research the wealthy and how they really got rich, you know what I'm finding? I'm finding that the wealthy truly got that way through owning their own business or being an Equity Partner in a Start-Up. It's like all of the people playing the Stock Market game to "ride in on the success" of the company are too late....the people with the REAL GAINS were the ones that started and operated the companies to the point of them being able to go Public.
 

guru1000

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Tenacity said:
Guru,

Excellent information! So you are more on the direct trading side of things, you have your Series licenses?
I used to be a licensed stockbroker and principal in my 20s. I'm a VC now, and trade one hour per day. Trading is more of a passion than a job for me.

Tenacity said:
You seem to have a good grasp on getting the returns within the market and I have heard of options before, but I'm confused on if they work as a hedge for losses or if they work as "stock insurance"? Meaning, if I tie an option in there does it somehow protect my principle or does it just limit how much I can "lose" per say?
That is beauty of the derivative market. Options can be used to hedge a stock position, used as a directional play, or used to sell “stock insurance” and collect credit premiums. There are hundreds of derivative strategies that can be combined with stocks or traded alone. You must find your niche. I have done incredibly well with iron condor credit spreads using 5-6 securities that I know inside out, so I stick with my methodology, as it works.


Tenacity said:
Also what do you personally think of my current strategy? Which is to invest most of my available investment dollars into my business, get the 400% minimum returns, from those returns I pay my expenses/taxes and small amount of loan payments, then the rest goes into safe/conservative vehicles like CDs and certain Bonds?

I have been HAMMERED across the internet on Investment Forums for listing out my idea because people say that I'm in my very early 30's and should be heavily in the Stock Market. But I own my own damn business, which provides 400% returns per year, investing in the Stock Market would get me a solid 7% - 10% on average per year over the long haul (10 years at least). Why would I want to do a high risk investment to only get back 7%? And I still do not understand the stock market and what allows me to make money in it, so I would be FORCED to depend on a guy (like you Guru or another Stock Broker or Mutual Fund manager) who says he knows what he's doing but I just cannot tolerate the volatility shyt. Dude I can't log into my investment portfolio and see negatives, I just can't, I have operated my own business since 2007 and I never (I repeat never) have lost any money any year, ever....even as a damn Rookie.

The CDs and Bonds I use average 2.5% - 5% per year, I hold everything until maturity, no trading. The Bonds are conservative as hell and the CDs are long term like 10 year ones. Even with the 2.5% - 5% returns this does beat Inflation, hell that range has been beating inflation since 1999: http://www.usinflationcalculator.com/inflation/current-inflation-rates/

But despite this, the Investment Community still hammers the hell out of me for not investing heavily in stocks.
400% returns are incredible, but three questions:

1. How many hours must be invested weekly to realize those returns?

2. What is the dollar cap? In other words, you may invest $25,000 to earn $100,000 in a year, but what if you were to invest $500,000, would you earn 2MM? Some businesses may have incredible returns with nominal dollar amounts invested, but diminishing returns with larger dollar amounts.

3. I assume your 400% returns are net? Just checking!

Yes, your business is your priority, and if you are diligent with elephantine returns as you state, you are best to keep the bulk of your monies invested into your business. It’s great that you hedge your liquidity against inflation, as stagnant money is a losing portfolio.

I strongly discourage relying on money managers to trade your portfolio. I have witnessed too many instances of bad-faith money management. This does not mean that all money-managers are unethical, but realize their motivations are grounded in their pockets, which sometimes may or may not align with your portfolio appreciation. Best to educate yourself, open a paper-trading account in any online brokerage to start, then dabble a small percentage of your portfolio until you gain trading acuity.
 

Tenacity

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I'm in BOLD


guru1000 said:
I used to be a licensed stockbroker and principal in my 20s. I'm a VC now, and trade one hour per day. Trading is more of a passion than a job for me.

I started working in Commercial Finance in 2007 at age 23, but I was thinking of going for a Stock Broker as well or a Mortgage Broker. I decided with Commercial Finance because I have this passion for consulting/selling to small business owners and C-Level executives.


That is beauty of the derivative market. Options can be used to hedge a stock position, used as a directional play, or used to sell “stock insurance” and collect credit premiums. There are hundreds of derivative strategies that can be combined with stocks or traded alone. You must find your niche. I have done incredibly well with iron condor credit spreads using 5-6 securities that I know inside out, so I stick with my methodology, as it works.

Yes, this is what I always try to do, that's find a workable strategy with any investment. I'm honestly still lost on stocks because while I understand the surrounding variables such as the ratios, financial statement analysis, etc., I still don't really have a clue what makes a stock go up or down other than some random forces such as what the News Media is reporting? How do you control what the News Media is reporting?


400% returns are incredible, but three questions:

1. How many hours must be invested weekly to realize those returns?

This is hard to note because as Outside Agents we don't punch a clock. I would estimate that from doing calls, some field appointments, managing apps, managing current client service calls, I probably only do actual "work" of 25 - 30 hours a week on average. Some weeks might be 40 but I think 25 - 30 is about a good estimate.

2. What is the dollar cap? In other words, you may invest $25,000 to earn $100,000 in a year, but what if you were to invest $500,000, would you earn 2MM? Some businesses may have incredible returns with nominal dollar amounts invested, but diminishing returns with larger dollar amounts.

Yes, see here's the thing. I have to close my own deals and there's only so much one agent is going to be able to do unless he brings on sub-agents which I have avoided doing because they usually just become a pain in the a.ss. But reasonably if I put up $25,000 for leads and marketing, I would be looking at acquiring about $100k - $150k in total revenue across the new client pick-ups, which includes their original deal pay-outs as well as their renewal deals, recurring service revenues, and referrals on those clients. I would say there's a limit to how much I can go, but I think I can reasonably as one person throw $50k out there at one time, bust my tail off and make sure I get every dime of that $200k - $250k total revenue for the year.

But also add to this, my conservative investments. Because as mentioned I live off the profits to pay for personal expenses, the small amount of business expenses, taxes, social security contributions, and then I fund the rest into my CD/Bonds at 2% - 5% per year. So the conservative interest earned on let's say putting $10k a year for a 5 year time at a small 4%, at the end of those 5 years that $10k turns into $12,166.53 so I count that additional $2,166 in new interest monies as earnings also because the investment is so safe there's not going to be any losses.



3. I assume your 400% returns are net? Just checking!

They are after I take out the business expenses that went into it, they don't include what I have to pay for Fed and State taxes. I do get a host of deductions and most of these are personal expenses that have been turned into business expenses, so the biggest tax I honestly have is Social Security even after I get the Social Security Tax Credit. But hey, with Social Security, that is at least going into a side asset column where once I get into my 60's I can start getting that back.

Yes, your business is your priority, and if you are diligent with elephantine returns as you state, you are best to keep the bulk of your monies invested into your business. It’s great that you hedge your liquidity against inflation, as stagnant money is a losing portfolio.

I strongly discourage relying on money managers to trade your portfolio. I have witnessed too many instances of bad-faith money management. This does not mean that all money-managers are unethical, but realize their motivations are grounded in their pockets, which sometimes may or may not align with your portfolio appreciation. Best to educate yourself, open a paper-trading account in any online brokerage to start, then dabble a small percentage of your portfolio until you gain trading acuity.

You know I have always had the same mentality about Money Managers, it's funny when I talk to other Investors (who are usually in their 50s) they usually SWEAR by their Money Manager even though the guy produces consistent negative returns annually. I also debate these guys about being smart with investing and knowing what you are investing in before you do it, but they HAMMER me about how a young guy like me should just be jumping into Equities as fast as possible because....and I quote...."The Stock Market always goes up son!" Then they show me the 20-30 year chart of how well stocks do in general, which is great, but I still have no freaking clue what made the stock prices increase other than speculation, hear-say, and the News Media riding the ____ of a CEO that they happen to love that particular day!
 

dasein

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Tenacity said:
Also when I research the wealthy and how they really got rich, you know what I'm finding? I'm finding that the wealthy truly got that way through owning their own business or being an Equity Partner in a Start-Up. It's like all of the people playing the Stock Market game to "ride in on the success" of the company are too late....the people with the REAL GAINS were the ones that started and operated the companies to the point of them being able to go Public.
I hope lots of younger members are reading this thread, lots of gold here that I never got when in my early years. What guru says is true too, lots of sweat equity required, but that can be part of the fun.

There are so many niches out there with outsized returns, business loan brokering, auto finance, credit card debt repackaging, and in the past with easy money and lots of static assets out there, there was LBOs, governance plays. Some are played out, some are not.

One trend I see forming in the next 2-5 years is in small cap business flipping. There are so many bankable $5-20 million or so revenue businesses run by baby boomers out there with a "proud patriarch" who refuses to plan until nearly too late, often debt averse so with clean vanilla balance sheets. Millions of business owners actively looking to cash out in that segment also and can't. They are too small for even boutique M&A/PE and banks, so are currently vastly underserved, or at least undermarketed to in the liquidity respect. Business brokerage got slaughtered 2008-present, and washed out, so the competition has not reformed yet. IMO people will make bank in this through 2020 and beyond.

That's just what -I- know and there are dozens of other real estate related plays that I'm not competent to address. My niche though is business and financial lawyering, and going to stick to that... which has its own entrepreneurial advantages I am trying to capitalize on as we speak. Corporate legal services, due to lots of factors, is a complete and total dinosaur. If they ever allow nonlawyers to own equity in law firms combined with interstate licensure, watch out, there will be big money there, and the possibility of those changes to the profession are not remote.
 

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I speculate with naked options using only the profits generated from my iron condor positions. Today as QQQ traded close to its resistance level of 109, it was inevitable that QQQ would trade down, given its huge upside move on Friday. Also the puts holding very little time value (expiring in 4 days), and thus discounted, allowed me to leverage the QQQ potential drop fully:

I bought and sold naked puts as follows:

Bought 20 put contracts Mar 27 Expiration, Ticker QQQ Strike Price 110, bought @ 1.02 (before 12pm)
Sold 20 put contracts Mar 27 Expiration, Ticker QQQ Strike Price 110, sold @ 1.7 (at closing)

Principal Invested: $2,040
Profit: $1,360
(minus commissions)

Put was sold at a limit price automatically, so I didn't need to babysit it. Not bad for 30 seconds of work.
 

guru1000

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I'm expecting SPY to drop tomorrow; perhaps long puts at the open.
 

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As expected SPY dropped $1.18 to $208.82. Bought and sold naked puts as follows:

Bought SPY put Mar 4 15, SP 211 @ $.93 at 10:30 am
Sold SPY Mar 4 15, SP 211 @ $1.71 at 3:32 pm

Amount of contracts not outlined, but:

Profit: $78 per contract or 83.8% return

Naked options are extremely high-risk and should invested into only by advanced derivative traders using speculative capital. I have no directional moves for tomorrow, as securities I'm into are between support and resistance levels. Accordingly, iron condors (credit spreads for both put and call sides), which profit from flat markets, are best.

Next, I will outline a conservative iron condor I bought yesterday with a detailed analysis.
 

Tenacity

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Guru,

- When dealing in Stocks let me ask you, how much have you lost since you began investing in Stocks? Some people tell me that they have lost a TON in Stocks, and also made a TON, so I'm not sure what the "net" profit is?

- Another question is, why does yourself and other stock investors, choose stocks over other high risk/high yield investments? I mean I understand the 20-30 year average "net" returns of the stock market (which means absolutely nothing because the prior 20-30 years isn't the same as the next 20-30 years), but why go through ALL OF THAT in terms of education, studying, research, worrying, re-positioning, losing money, gaining it back, losing it again, gaining it back, holding here, trading there, etc....just to get an average of a 7% - 12% per year return over 10 years?

I mean if a person is going to do all of that, why don't you guys just open a business where you will be doing all of the studying, research, education, worrying, negotiation, selling, worrying some more, selling, worrying some more, having nervous breakdowns, being bipolar (business is good you are happy, business is slow you are depressed), etc., but the returns will be in the 100% - 1000% range if you are operating the business profitably?

Just trying to understand the mentality of stock investors. It's like investing in stocks bring about some of the same worries as owning a business does, maybe not in TOTAL but at the core a lot of the same worries, but you are doing it for a 7% - 12% a year return v.s. a 100% - 1000% a year return. Why?

Let me tell you, I have NEVER lost any money in investing, and I will never lose any. You know why? Because my investments are 100% in my control (owning my own business). I can sit down and do all of my homework on a stock like freaking Warren Buffett, have it all lined out, but then out of the blue the CEO does something stupid, pisses the Media off, and now the stock price is falling. How in the hell could I have had any control over that or risk mitigated that?
 
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