Re: October [censored] thread
 

Going to be a good day for the VIX

Re: October [censored] thread
 

[ QUOTE ]
vanity license plate spotted at/near ryerson university in toronto. 52WEEKHI pretty creative i thought, but it was on a mazda 3 :\

[/ QUOTE ]

Heh, in 1999 (NYC) I saw a porsche turbo with the
vanity plate 999x999. In '02 I saw the same plate on a Jetta.

Re: October [censored] thread
 

anyone know where I can look at graphs of option prices? Do they even exist?

Krishan

Re: October [censored] thread
 

[ QUOTE ]
anyone know where I can look at graphs of option prices? Do they even exist?

Krishan

[/ QUOTE ]

heh, not that I know of. Would be very nice to have. We're now thinking about storing all historic options prices for our products (at my request!), but I doubt we'd make them public. I'm getting excited just thinking of everything I could do with it.

Re: October [censored] thread
 

for the optinos newbs..what could you do with it?

Re: October [censored] thread
 

i just contributed to my IRA...gogogo international stock index fund

Re: October [censored] thread
 

Dollar Index at new low. 1 Canadian = 1.035USD.

Re: October [censored] thread
 

Is there ever any useful information on CNBC? Every time I watch it for a few minutes it's just some hot chick narrating what the DOW and oil prices are doing, as if anyone who cared wouldn't already know. Then they interview some random fund managers/analysts or whatever who explain fairly obvious things about the market or a sector in general.

Re: October [censored] thread
 

[ QUOTE ]
[ QUOTE ]
anyone know where I can look at graphs of option prices? Do they even exist?

Krishan

[/ QUOTE ]

heh, not that I know of. Would be very nice to have. We're now thinking about storing all historic options prices for our products (at my request!), but I doubt we'd make them public. I'm getting excited just thinking of everything I could do with it.

[/ QUOTE ]

It seems like a simple powerful tool and I'm surprised it doesn't exist.

Krishan

Re: October [censored] thread
 

[ QUOTE ]
Is there ever any useful information on CNBC? Every time I watch it for a few minutes it's just some hot chick narrating what the DOW and oil prices are doing, as if anyone who cared wouldn't already know. Then they interview some random fund managers/analysts or whatever who explain fairly obvious things about the market or a sector in general.

[/ QUOTE ]
That's why you read newspaper.

Re: October [censored] thread
 

i'd much appreciate any thoughts on my current idea i've just posted in the ultimate leverage thread.

basically leveraging pretty heavily in 1 commodity, 1 forex, 1 index and 1 stock. hold till there is a better option available. maybe add an extra one for each depending on whether good ideas out there.

Re: October [censored] thread
 

wtf has happened to the hang seng index over the last 2 months, it's up 45%!?!?

seriously some of you guys must have made a killing?

Re: October [censored] thread
 

[ QUOTE ]
wtf has happened to the hang seng index over the last 2 months, it's up 45%!?!?

seriously some of you guys must have made a killing?

[/ QUOTE ]

too scared [img]/images/graemlins/crazy.gif[/img]

Re: October [censored] thread
 

Any suggestions of what to do with 15k worth of cash in US dollars. Its becoming depressing as the dollar continues to drop. I currently have it in a high yield savings account that was earning 5.05 but now is about 4.5%. I am holding it for the time because I speculate/think that the market will react to a 4th quarter miss of earnings as a sign of a recession at which time many companies will be for sale at a discount (i don't want a comment about timing the market).

Thoughts appreciated.

Re: October [censored] thread
 

Didnt know where to post this but dont think it deserves a new thread. Need to answer this Q and have no idea where to even begin with it. Dont really know too much/anything about the subject (have just started reading intro into global markets). Oh Im in the UK although since most IBs are international I dont think it matters too much

Given current market conditions what do you think Investment Banks should do to remain competitive?

Re: October [censored] thread
 

[ QUOTE ]
Given current market conditions what do you think Investment Banks should do to remain competitive?

[/ QUOTE ]

someone is filling out IB graduate recruitment applications [img]/images/graemlins/smile.gif[/img]

gl with them

Re: October [censored] thread
 

[ QUOTE ]
[ QUOTE ]
Given current market conditions what do you think Investment Banks should do to remain competitive?

[/ QUOTE ]

someone is filling out IB graduate recruitment applications [img]/images/graemlins/smile.gif[/img]

gl with them

[/ QUOTE ]

Lol - someone is. Although I aint got an internship (couldnt get one last year [img]/images/graemlins/frown.gif[/img])

Any ideas of a sort of answer or even where to look for info?

Re: October [censored] thread
 

i just blagged mine, i got through a couple, a major error on my cover letter likely meant i didnt get anymore (plus better competition as well).

i suggest defining what the current market conditions are (bbc business will help, just babble on about global credit crunch etc) and how best an IB should react to this - i don't know, you'd need to find this out somehow. here is a good place, someone who knows something will post.

Re: October [censored] thread
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
Given current market conditions what do you think Investment Banks should do to remain competitive?

[/ QUOTE ]

someone is filling out IB graduate recruitment applications [img]/images/graemlins/smile.gif[/img]

gl with them

[/ QUOTE ]

Lol - someone is. Although I aint got an internship (couldnt get one last year [img]/images/graemlins/frown.gif[/img])

Any ideas of a sort of answer or even where to look for info?

[/ QUOTE ]

Buy anything and everything they can get their hands on going into next year (except for subprime [censored] duh). Diversify and buy buy buy!

Re: October [censored] thread
 

So I'm reading One Up On Wall Street. Lynch says to "make sure the company has consistently paid out their dividends." What does that mean? Do some companies sometimes not pay the dividends they say they will? How do I find out if a company has been skimping on dividends?

Re: October [censored] thread
 

I think he means to make sure they dont retain all earnings. But thats less relevant today than when it was written. If you exclude all companies that dont pay dividends you are really limiting your selections.

Re: October [censored] thread
 

Yeah, I certainly wouldn't exclude companies that don't plan on paying dividends, and are upfront about it. I don't think he was saying those stocks should be avoided based only on that.

But from the wording he uses, it seems that he's saying some companies that promised to pay dividends will sometimes back out and not pay them when they get into some financial trouble. As opposed to a company that never promised to pay them. And as opposed to a company that has a record of paying them even when they were in trouble.

Re: October [censored] thread
 

Nothing like selling coach because you think the US economy is entering a recession and nobody will be spending money on luxury apparel and then being proven right only 2 weeks later.

Re: October [censored] thread
 

That was a quick drop.. hovered at down 4 points for a looooong time then shot down 20 points

Re: October [censored] thread
 

[ QUOTE ]
Yeah, I certainly wouldn't exclude companies that don't plan on paying dividends, and are upfront about it. I don't think he was saying those stocks should be avoided based only on that.

But from the wording he uses, it seems that he's saying some companies that promised to pay dividends will sometimes back out and not pay them when they get into some financial trouble. As opposed to a company that never promised to pay them. And as opposed to a company that has a record of paying them even when they were in trouble.

[/ QUOTE ]

i think he's talking about if a stock has a regularly scheduled dividend payment per quarter and sticks to that consistently, then it's solid in the case that it's not taking overaggressive bets on things that could go wrong (with "one off" losses, "unexpected market conditions", etc.)

Re: October [censored] thread
 

Financials. That is all.

Re: October [censored] thread
 

Not sure if the financials are oversold or not. I bought my positions mid august for what I thought was a good price. If I learned anything though its when you are buying for value and some bad news hits a whole group that gets really sold off, dont buy the company that gets hit the hardest for apparently no really big reason (MER,C) buy the company that has the reputation for excellence that got hit as well (GS). In bad times the cream separates itself more clearly from the crap.

Re: October [censored] thread
 

I like the financial stocks too, but I don't think they have hit bottom yet. There will be further reprecaussions from the credit crunch... I think... I'm holding off for now and will reevaluate in 30 days.

Re: October [censored] thread
 

Hi ahnuld,

Sorry I’m late to the party. You missed a test question about global minimum variance portfolio with two risky securities:

[ QUOTE ]
The global minimum variance portfolio formed from two risky securities will be riskless when the correlation coeffcient between the two securities is..


D) -1

[/ QUOTE ]

To understand how perfect negative correlation effects portfolio variance, we may examine the portfolio standard deviation formula:

http://www.spreadsheetmodeling.com/i...%20Assets3.gif

Two securities with perfect negative correlation have the same standard deviation, but the direction of the deviations is perfectly opposite (as you know). Since I can’t type the rho character (for correlation) and sigma (for standard deviation), I will refer to them as p and s respectively.

Consider the three terms under the square root (we’ll ignore square root for now, and eliminate it later). By substituting –1 for p, the third term becomes:

- 2 w ( 1 – w ) s1 s2

When analyzing the three terms together, we can factor it using the binomial factoring property:

a^2 + b^2 – 2ab = ( a – b )^2

Therefore, the term under the square root become:

[w s1 – ( 1 – w ) s2]^2

Since this is a squared term and it is under a square root, we may cancel the power. In addition, the standard deviations are equal (since it is perfectly negatively correlated), therefore if the weights are equal, the equation will equal 0. When two securities are perfectly negatively correlated, using equal weights and factoring, all terms cancel each other in the portfolio variance formula.

While you were taking the test, you made incorrect assumptions about the effect on portfolio variance of short selling a security that is negatively correlated with another. I can see how you got confused. If we look at the two extremes (perfect positive and negative correlation) you may see why you missed the question. We assume equal weights (as you did while taking the test).

Consider two stocks that are perfectly positively correlated. For simplicity, imagine it is the same stock. You short 10 shares and long 10 shares. What would you expect to happen to the portfolio variance? It will be zero (coincidentally the return will be zero since it is the same security). A move in any direction of the long security will be offset by the move of the short security.

Now consider two perfectly negatively correlated securities. You short a security, hoping it will drop. The same drop will cause your long position value to rise by the same magnitude. This does not eliminate any variance. In fact, you are causing two securities that move in opposite directions to perform equally.

Hope my explanations and examples help you and make sense.

Clark

Re: October [censored] thread
 

[ QUOTE ]
Hi ahnuld,

Sorry I’m late to the party. You missed a test question about global minimum variance portfolio with two risky securities:

[ QUOTE ]
The global minimum variance portfolio formed from two risky securities will be riskless when the correlation coeffcient between the two securities is..


D) -1

[/ QUOTE ]

To understand how perfect negative correlation effects portfolio variance, we may examine the portfolio standard deviation formula:

http://www.spreadsheetmodeling.com/i...%20Assets3.gif

Two securities with perfect negative correlation have the same standard deviation, but the direction of the deviations is perfectly opposite (as you know). Since I can’t type the rho character (for correlation) and sigma (for standard deviation), I will refer to them as p and s respectively.

Consider the three terms under the square root (we’ll ignore square root for now, and eliminate it later). By substituting –1 for p, the third term becomes:

- 2 w ( 1 – w ) s1 s2

When analyzing the three terms together, we can factor it using the binomial factoring property:

a^2 + b^2 – 2ab = ( a – b )^2

Therefore, the term under the square root become:

[w s1 – ( 1 – w ) s2]^2

Since this is a squared term and it is under a square root, we may cancel the power. In addition, the standard deviations are equal (since it is perfectly negatively correlated), therefore if the weights are equal, the equation will equal 0. When two securities are perfectly negatively correlated, using equal weights and factoring, all terms cancel each other in the portfolio variance formula.

While you were taking the test, you made incorrect assumptions about the effect on portfolio variance of short selling a security that is negatively correlated with another. I can see how you got confused. If we look at the two extremes (perfect positive and negative correlation) you may see why you missed the question. We assume equal weights (as you did while taking the test).

Consider two stocks that are perfectly positively correlated. For simplicity, imagine it is the same stock. You short 10 shares and long 10 shares. What would you expect to happen to the portfolio variance? It will be zero (coincidentally the return will be zero since it is the same security). A move in any direction of the long security will be offset by the move of the short security.

Now consider two perfectly negatively correlated securities. You short a security, hoping it will drop. The same drop will cause your long position value to rise by the same magnitude. This does not eliminate any variance. In fact, you are causing two securities that move in opposite directions to perform equally.

Hope my explanations and examples help you and make sense.

Clark

[/ QUOTE ]

The answer is correct but you might want to check your assumptions - correlation of -1 does not imply that the standard deviations are the same.

Re: October [censored] thread
 

Gold at $785. If it goes to $1000 before July 1st 2008, Barron owes me $500. Going to spend that money on a hooker on his dime.

Re: October [censored] thread
 

grizwold thanks, thats a pretty good explanation. it was the only question I missed on the test so no biggie, but im happier now understanding why. And I believe PB is correct, that the correlation will be 0 as long as the both go up on up days and down on down days but that doesnt necessarily mean they have the same SD. (not sure if thats right)

Re: October [censored] thread
 

wtf i've found a stock with an 18 % dividend...how?

Re: October [censored] thread
 

[ QUOTE ]
wtf i've found a stock with an 18 % dividend...how?

[/ QUOTE ]

you looked for it and found it? j/k

Which stock?

Re: October [censored] thread
 

I just got my first issue of The Economist, "Lessons from the credit crunch." I'm a week behind because I didn't get it until yesterday when it was in my mail at home on Monday. Great magazine! I've been reading it every chance that I get.

Re: October [censored] thread
 

[ QUOTE ]
wtf i've found a stock with an 18 % dividend...how?

[/ QUOTE ]

lol yeah and i bet you can find a ton of REITs right now with similar distributions, doesn't make it a good investment.

Re: October [censored] thread
 

I don't want to start a new thread, and I don't know where to put this question, so I'll just ask in here.

When we are talking about Euros and we have to talk in Euro dollars and cents, how would you say Euro $1.42? Is it 1 Euro Dollar and 42 Euro Cents? 1 Euro Dollar and 42 cents? or any other variation?

Re: October [censored] thread
 

[ QUOTE ]
[ QUOTE ]
wtf i've found a stock with an 18 % dividend...how?

[/ QUOTE ]

lol yeah and i bet you can find a ton of REITs right now with similar distributions, doesn't make it a good investment.

[/ QUOTE ]

Nor does that alone (the high dividend) make it a poor investment, shipping stocks are great examples of extremely high yielding stocks that have historically been great investments with dividend yields as high as 15%

Jimbo

Re: October [censored] thread
 

I've been reading the quarterly report, and there are definite issues with the company so it isn't as simple as an unnoticed ridic dividend.

Its a canadian income trust on the TSE exchange with the ticker CUS.UN. It will be affected by the new income trust legislation that comes in 2011, and thus have to pay income tax after that, though depending on how they treat their dividend payouts (if any of course) after that the after tax returns for an investor should remain somewhere around the same. It produces sodium chlorate and a few other chemicals for pulp production. Their business is of course going to be negatively affected by the Increasing Canadian dollar, but they have bought options to hedge, and switched most of their debt to american dollars (back when it was at 0.92 cents) and canadian manufacturers account for over 2/3rds of sodium chlorate production so some of the appreciation of the dollar will be taken up by price increases for US buyers of the chemical. They have also had to deal with a number of what seem to be one time issues like a repair issue at one of their plants etc.

They pay the dividend every month and it works out to about 86 cents a year if i remember correctly. I still don't understand completely how to value stocks and completely understand balance sheets so i'm still sticking with my etfs, but i thought it was an interesting stock that could have some possibilities. I just don't have the confidence to give it a solid valuation.

If anyone takes a look at their quarterly reports feel free to correct anything i've said as i'm really just trying to learn here.

Also, anyone know a good resource for me to learn everything i need to know about balance sheets. Would it be worth it for me to take an Accounting class that focuses on that or something? I don't mind just buying a textbook tho and reading it instead of actually wasting time in a class.

Re: October [censored] thread
 

hey guys,
Im the definition of an investment-noob, but I have some money, that I dont want to have uselessly sitting at my bank - so I figured Im just gonna start here and ask some questions:
as I looked around the forum, I found out, that the main advice for noobs like me is to invest in some index-fonds. and thats what I was planning to do.
but then I didnt know which investor/broker to choose - I dont just want somebody to invest for me, I want the ability to trade by myself over my internet-connection, especially as I hope to consistently gain knowledge and experience. so what would be my best option to do so (Im living in germany, that may be something to consider.)?
then I plan to simply put 90% in some index-fonds and 10% in some stocks.
but another thing that concerns me is the rumour of an upcoming downswing of the whole market. I mean it has been rising incredibly high over the years. therefore Im afraid that it starts dropping now that I start investing and that my market-oriented index-fonds will drop and I lose money. would it be more reasonable to just put my money on a bank-account for ~4% interest. can someone like me earn money at the financial market at the moment and the middle-term (1-2 years: maybe long-term for the market reconsodered) future?
sorry about that post, but I would be happy about any constructive answer.
thx