Financial topics

[richard5za]

Rivian is about $120/share and to buy a put option at $120 strike price (current price) for January 20, 2023 costs about $45.

https://finance.yahoo.com/quote/RIVN/op ... 800&p=RIVN

If you short at $120 and it goes to zero in the next year you don't even triple your money.
I think this means lots of people think it will go down but the risk of it going higher is real enough that shorting is also risky.

Shorting is much higher risk than buying to sell at a higher price (long) If you are doing the short term plays then the maths and discipline is crucial. We all have our methods but mine starts with the fact that I am prepared to lose up to 2% of my total capital on a trade but no more. So when I calculate the trade I build this in to the stop loss. Generally I look for trades where I can make 4% of my capital if the trade goes well. If I can get it right 6 out of 10 trades then I lose 4 X 2% and gain 6 X 4% which is a net increase on 10 trades of 16%. When I am fully disciplined I don't get to do that many trades but increase capital on an annual basis 40% to 80%. When I am less disciplined doing more trades which increases risk my annual returns are much lower even a loss.

[richard5za]

"Averaging stock market capitalization to GDP ratios from seventeen developed economies over the past 150 years reveals the world has never witnessed an equity bubble of the current magnitude."
[...]
"The conclusion of the K&Z paper is that until the 1980s stock market caps in developed economies grew roughly in line with GDP. Hence, the weighted average market cap to GDP ratio hovered around 50% for 110 years. Since the 1980s, market cap growth accelerated much faster than GDP, caused by increases in stock prices, not issuance growth. According to K&Z the key reason has been a profit shift from other parts of the economy towards listed firms. And higher profit margins have mostly been aided by lower interest expenses."

In other words, the Fed's low interest rates have blown the biggest bubble the world has ever seen.

https://thegoldobserver.substack.com/p/ ... bal-equity

Vince, do you have a subscription to the Gold Observer? I would dearly love to read Part 2 on the Gold articles but have hesitated at the subscription payment

[vincecate]

Vince, do you have a subscription to the Gold Observer? I would dearly love to read Part 2 on the Gold articles but have hesitated at the subscription payment

No, I don't.

[vincecate]

Powell has realized he is "behind the curve" and that "inflation is not transitory". Maybe we are finally past the peak.

https://www.youtube.com/watch?v=e_zRjELIGtU

I suspect that Powell feels freer to do what is right after having secured his next term.

[Cool Breeze]

Powell has realized he is "behind the curve" and that "inflation is not transitory". Maybe we are finally past the peak.

What's your best guess now for this December and Q1 2022, vince my boy?

[vincecate]

What's your best guess now for this December and Q1 2022, vince my boy?

Guessing stock market goes down.

[aeden]

So it begins.

[vincecate]

So it begins.

Seems so.

[vincecate]

Sen. John Kennedy says people forecasting inflation with Fed Chair Jerome Powell have the same credibility as Late-Night Psychic Hotlines

https://www.youtube.com/watch?v=aLX3zdg5sRk

[richard5za]

Sen. John Kennedy says people forecasting inflation with Fed Chair Jerome Powell have the same credibility as Late-Night Psychic Hotlines

https://www.youtube.com/watch?v=aLX3zdg5sRk

And Kennedy's credibility?