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Messages - Califoilia

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1276
Random / Re: Simple Retirement Plan
« on: September 18, 2015, 01:33:17 AM »
PB, while the general concept of your work so far is good, I have to question this paragraph, and a few of your computations and assumptions....
Quote
If the amount you need to draw from your savings is more than 4 percent (including all the fees you pay to advisers, brokers, etc,) then you’re in trouble and you need to fix your plan. Four percent is a thumb rule, but it’s an important one. The number comes from solid research, but there’s a rational explanation behind the raw number. Over the last 80 years the general stock market averaged a 7 percent return. You might think that would make a good number, but if you spend at that rate you will almost certainly run out of money well short of 20 years. The prime culprit is market volatility. When the market is low you’ll be selling more shares to make up your 7 percent.  You won’t be buying shares when the market is high, but you’ll be on the most destructive side of the sell low, buy high portfolio ratchet that panicky investors fall victim to. If that volatility happens in the early years of your retirement your portfolio will suffer even more from an effect called Sequence Of Returns risk. Volatility is generally not damaging to portfolios when you are accumulating them if you take advantage of dollar cost averaging (more later or Google) but when you’re selling your portfolio over many years, that same cost averaging effect works against you to deplete your savings much faster. Historically the net effect of volatility and the Sequence Of Returns risk is about 3% of your portfolio. Subtract 3 percent from 7 percent and Presto–4 percent.

While over the past 80 years, the market did average a 7% return annually (6.7% to be exact), however, adjusting for inflation, it's less than 3% (2.9%).....in the past 30 years, it's been 8.1% (5.3% adjusted)....the last 20, 6.5% (4.1% adjusted)....the past 10, 4.9% (2.8% adjusted).  Do you see a pattern here?  And that's just the "market" in general (S&P 500), and doesn't take into consideration the limited opportunities offered some folks depending on where their 401(k) or 457(b) plans are held.

For instance, the small handful of mutual funds I have/had available (all 60 of them) in my 457(b) plan account at Nationwide (transferred most of it out to TD Ameritrade some time ago).....the "best" fund out of the whole lot, returned a whooping 16.24% over the past 10 years, and that's with this explanation below all of them.....
Quote
Performance numbers represent the total percentage change in share or unit value, with capital gains and dividends reinvested, for the period indicated. Plan charges, if applicable, have not been reflected. The results shown represent past performance and do not represent expected future performance or experience.
.....nowhere even remotely close to the 4% annually you recommend.  Hell, it's not even keeping up with inflation....and remember, that's the very best return of all funds available in that plan, some have 10 year returns of single digits, not even 1% annually, and that's before "plan charges"!!

While I understand that your 4% is just a number that you extrapolated as somewhat achievable from 80 years of average returns, but toss inflation into the mix, and the typical, recent performance of some of the "better", and "safest" investment vehicles over the past 10 years that many talk about, and are betting their retirements on, and.....

Folks better start figuring out how to live off of strictly their pensions and social security (if it's still around by then), or come up with a much better, even if less comfortable investment plan than most are doing at present....because 4% ain't as easy as it sounds doing it the "old fashion way" as some might consider it.


1277
Random / Re: Scientist Predicts 60% Market Collapse
« on: September 17, 2015, 06:35:53 PM »
I view anyone who invests in individual stocks without some kind of insider information (which is, of course, likely to get you free meals for a few years, but no wine with dinner) to be simply a gambler.

PB, I know that you're a very astute numbers guys, and while investing in individual stocks might seem like a gambling crap shoot to you, I really believe the one little article I'll link below, might put things in a little better perspective of what's currently available with the advent of technology putting probability algorithms in the hands of self-directed investors....which just a few years ago were only privy to the equivalent to the "Vegas" big boys, taking money from the market's "gamblers" as you say.

What if you you could place a trade ("bet" if you like) that gave you the potential of making $435, from "investing/betting" $1565 over the next 39 days, and had a probability of success of 79.42%....would you take it for the potential 3.34% ROC in just over a month (that some mutual funds won't even pay you in a year)?

That trade is from the chart in the middle of this article...... http://www.nasdaq.com/article/probabilities-of-success-a-primer-cm194794 ....and available to anyone who puts a little time into understanding those numbers. 

Want a higher probability of success (like the 87.26% one mentioned in the article)?  That's easy enough too, but the chart doesn't go low enough to show the actual prices of the 141 strike/price that the guy talked about, so I couldn't give you exact numbers to get the risk vs. reward figures, but it really is that simple.   

Your ROC won't be as good, but your probability of the success just went up another 8%....like anything in life, you have to give up a little to get a little.

Still look like gambling?  I say "yes", but this time you get to be "Vegas", and collect all the small wins....with the added benefit of being able to define just how much you'll pay out should someone happen to beat whatever "odds" you set for them.

Yeah I know, not for everyone, but just another way of looking at "investing/gambling" I suppose....

1278
Random / Re: Who won, Secretariat or True Heart?
« on: September 17, 2015, 05:30:50 PM »
Hey admin....we need a puking smiley.
Here ya go.....



....thought it appropriate for the thread.   ;) ;D

1279
Random / Re: Simple Retirement Plan
« on: September 17, 2015, 05:15:01 PM »
Good read and information PB, and Suppa adds some valuable thought/ideas also.  I think the biggest three takeaways from both should be...

1. The advisor side of the financial industry seems to be built around taking as much as possible in fees while doing as little as possible to earn them.

2.  Educate yourself..."to figure out exactly what it is we want to do".

3.  "What I think is a very good system, which I am happy about. 100% DIY."

And if I might add a fourth....spend time while still working, to better plan/enhance your retirement contributions, and management of your retirement account(s).

Maybe it goes without saying, but if #1 is valid with your post-retirement account(s), which I believe 100% that it is, than why do many/most wait until after retirement to shift their retirement/investment goals out of the "advisor's" hands, and into their own?

Unfortunately, many that I spoke with while still working, and those now when retirement happens to comes up in the conversation since I've been retired (almost six blissful years now)...is that I'm continually surprised at how most simply feed money into some IRA, or 457(b) accounts....and either just toss it into some mutual funds they dang near just pulled out of a hat, or put wherever some "advisor" said they needed them to be, and they have very little, to no idea how those funds really perform. 

They have no idea of their cost/fee basis, nor how they stacked up against the market as a whole as a barometer of if, or how their money was or wasn't working for them. Their goto criteria for performance it seemed, was that if at the end of the quarter when they receive their statement, if their new balance was higher than the previous one they're fat and happy.

As you alluded to in a prior post PB (or maybe actually wrote about earlier, I don't really remember), there really is a fairly easy, low cost, and "reliable" (if one can ever really call the market that) method of "self-directed" investing that beats 70-75% of the "advisors" and their mutual funds annually. 

This is a blog from 2012 that I read, and find quite accurate, and a good read....even if folks are not quite ready to go it on their own, at least they have some information for which to compare/evaluate the performance of their current investments, and at least be able to use the information to ask their "advisors" as to "why", they're not returning at least what the SPY is returning....and charging them extra, exorbitant fees for that lesser performance to boot.  >:(

Quote
A simple strategy that beats most traders

I often find myself thinking about possible strategies and end up playing with historical data whenever I have the time. I like to come up with some experiments or simply have some fun enjoying the exercise of trying to design trading systems for different portfolio sizes and risk tolerances. Needles to say it is a tough exercise and most of the time I end up frustrated, but that's not the point for this article.

The other day I thought about a simple idea, so simple that I'm pretty sure many traders have thought about. A simple strategy that despite its simplicity beats most traders out there over the long term, and most mutual funds as well.

We know that 90 to 95% of traders lose money, and we also know that 70 to 75% of professional  money managers can't beat the S&P500 year after year. That means if you achieve the returns of the S&P500 you are doing better than most.

The core of the strategy is owning SPY shares. The SPY is the Exchange Traded Fund (ETF) designed to track the performance of the S&P500 index. By owning SPY shares you are essentially obtaining the same return as the S&P500, which means you are beating the majority of traders and professional money managers.

One added benefit of owning SPY shares is that they pay dividends. These dividends have oscillated between 2% and 4% per year during the last few years. So, not only would you be beating most professional money managers by simply tracking the S&P500, but you would also be getting paid quarterly dividends that would add up to somewhere between 2% to 4% of your capital year in and year out.

Notice that in a Bear market, like the one we have had for the last few years, with the 2001-2002 crisis, the 2008 crisis, the 2010 recession in Europe, the issues with US National debt etc, the major indices are around where they were in 2000. Yes, you wouldn't have had much capital appreciation, in fact almost none, but you wouldn't be negative either, and with the added benefit of the dividends you would be better off than with a savings account offering 0.75% yearly returns in any of the major banks.

Of course, this is a hard to stomach strategy, subject to the mercy of the S&P500 and psychologically tough draw downs such as the one experienced in 2008. But anyways most Mutual funds didn't escape the 2008 calamity either and we realized they were not as "safe" as it had been promised for years.

Finally, I just have a little upgrade to the strategy just to make it a little better in my opinion.

You simply leave 10% of the portfolio available in cash in order to apply the Covered Call strategy. For every 100 shares of SPY you own, you simply sell 1 SPY Call option from time to time. But you don't do it randomly. You patiently wait like a sniper for very overbought markets: 70% of stocks being above their 20 Simple Day Moving average combined with an oscillator of your preference being overbought. That should happen 3 to 5 times a year. At that precise point you sell your out of the money Calls in the front month, 5% to 10% above current price, simply trying to add returns of 2% - 5% per year with this little add on.

By using the SPY Etf you are also avoiding all the crazy and insane costs and fees imposed by the Mutual Funds industry. You are automatically free of things such as Administration Fees, Performance Fees, Early Redemption Fees, Deferred Sales Charges, etc. Most people are trapped in this industry full of fees. Fees charged for under performing services most of the time.

No wonder they say the industry is in crisis. If a very simple strategy like the one I described could easily beat the highly priced and under performing Mutual Funds industry, then it is an industry in a permanent crisis. Investors wouldn't need hundreds of hours monitoring their positions or investigating particular stocks or anything like that. A simple, cost effective strategy for long term investing that would allow them to keep their daily jobs.

Unfortunately, most people are lazy, and don't want to make an effort and just learn the basics to apply something like this. Or they simply don't question the status quo of going to a professional for him to manage your money believing he will do better. Seriously? How much better? There's no guarantee.

If you have another basic, yet effective idea, I'd like to hear about it. traderlazy@gmail.com or simply add it in the comments sections for discussion.

Happy trading folks!

Btw, that one "little upgrade to the strategy" is a very important one IMO, and allowable in IRA accounts , as it helps in meeting one of the tenets of an astute investor who's taught me quite a lot; and that is, "You never make any money until you sell something".  Maybe that's obvious to everyone else, but it wasn't until that sank in with me, and I got away from the strict "buy and hold" mentality, did I finally really start to grow my accounts.

Anyway, hope that helps, and adds a little more food for thought to what I think were a couple other fine posts.

1280
Random / Re: Scientist Predicts 60% Market Collapse
« on: September 16, 2015, 05:40:47 PM »
At the risk of a stern talking-to by our gracious Admin...

No way!  I love these threads.  The markets, theoretical physics, diet.  Topics where you can be wrong more than right and still be an expert in your field.


Love these threads also, as they simply instill the fact that the investing world is a crazy, and loopy as ever.  They are the exact opposite of the "random walk hypothesis" which then makes the "efficient-market hypothesis" that much more understandable.

IOWs, the current price of whatever stock or index you want to use at any time during the trading day (or after hours), is the "fair market value" at that moment, and there is basically just a 50/50 chance of it being higher or lower (sans the small % that the stock closes exactly the same, which is negligible in highly liquid issues) in a minute, five minutes, five hours, tomorrow, next month, or in whatever time frame you wish to use....

Unless of course someone has discovered the magic stock picking crystal ball that they've not shared with the rest of us, but I think it's a 100, 1000s times better bet to say that that crystal ball's yet to be found, than it is to guess where the market will be at any time in the future....up, down, or sideways.  So how does this all play into the market?  Options, and volatility.....

There's a good reason that statistics show that 90% of the folks buying options lose when doing so, as they think they are able to (or they've heard someone) "predict" that a certain market or issue will be at a certain price in the future.  The only problem lies, in that so far, no one's be able to accurately predict "when" in the future this is supposedly going to happen.

So they go out thinking that the price is going to shoot up (or down) at some guessed time in the future, and go and buy the appropriate stock option to reflect their bias.  Option sellers love this, because what these folks don't realize , is that the market makers using price movement modeling algorithms have already priced these same "guessed" price moments into the premium of the options being sold.

What poor Joe Q. Public option buyer doesn't realize, or price into his "investment", is that it is costing him X-amount of dollars per day for the supposed opportunity to wait for the price to move in his direction and fast enough.  Let me give you a practical example.  Adobe (ADBE) has an earnings announcement coming tomorrow after the close, as a result of this "unknown", the front month option prices are 49% more expensive than they usually are.  But why does this matter?  Well.....

Yesterday, with ADBE trading at roughly $79.50, people "predicting" that ADBE would go up $5.50 by Friday, were willing to pay $69 for every "100 share" option contract for the "right" to buy ADBE for $85 by the close of trading in 3 days....and actually more ($100/contract) for the people "predicting" the opposite, and that ADBE will be down $4.50 by Friday.  All the while, the market makers selling the options have priced in a $4.82 move in ADBE by Friday.

So these poor folks are paying (or "losing"), $28 per day/per contract on average, which is going into the pocket of whomever sold it to them, just for the "right" to buy ADBE at $85/share or sell it for $75 a share come Friday ....meaning ADBE needs to move roughly $2.40 ($85.69-$79.5=$7.19 divide by 3 days) in their direction per day for the "up predictors" just for them to break even in the trade.  Today ADBE was up $1.....

Oh, and the folks selling those options get another nice added bonus.....sell both sides of ADBE, and they not only collect the $21 a day from the folks who were "sorta right" (ADBE did go up, just not fast enough so far...tomorrow it needs to pick up not only the $1.40 it was short today, but also the $2.40 it needs to for that day also), but they also pocketed the $33 per day from the folks that were completely wrong in their prediction today, and who now need ADBE to go down the $1.83 they missed today, plus the $1 it moved up today against them, plus the $1.83 it needs to lose tomorrow, and all the remaining two days till Friday expiry.

If you didn't happen to notice, the folks thinking ADBE was going down, are now looking for a $4.66 down move tomorrow just to get back on track for the $1.83 per day they needed....but they had "predicted" a $5.50 overall move by Friday.  And let's not forget those people who were "sorta right" today, if ADBE does happen to go lower a few dollars tomorrow at the joy of the "down predictors"....the up predictors have just lost any "gain" in their direction from today.

In the "mathematical nutshell" to eventually land this plane....for the people selling options to the stock market "predictors", they are going to collect a total of $1.66 per share for the obligation to sell ADBE for $85 per share if it happens to go that high by Friday (the mathematical algorithms say there's a 79.27% chance that it won't after today's trading)....or buy ADBE for $75 per share (a 79.87% that it will not, also from the same modeling algorithms) from those who thought it would fall that low.

However, if you apply the $1.66 per share they've already collected from the buyers.....ADBE can go all the way up to $86.66 or as low as $73.34 before they start losing money.  IOWs, they can make money if ADBE goes up some, down some, or ends up right back where it is the day they sold the option....when the option buyers, can only make money if ADBE goes up, and up much faster than the market makers setting the "fair market value" of the options believe it will move.

So for those option sellers to lose money, ADBE would have to get all the way up to close to recents highs, or fall all the way down to the lows of the recent market "corrections"  Could it happen?  Sure, feds could raise or lower rates, and the market could do all sorts of weird things, but what are the odds that those "weird" things would effect ADBE to the drastic swings either high or low in two days?  Well, the odds are almost 80% against it....I'll put my money on that.

Hope that wasn't all too long, too complicated, or too boring as compared to that cool "scientist" and his crystal ball getting his 15 minutes of fame should he just happen to luck out once in his lifetime, and guess....oops, "predict" when, and just how far the market is going to "collapse" in the next few months (years?).....

Btw, when markets start falling (dare I say "collapsing"?....my gawd!), people start to panic, volatility starts to shoot up, and option prices become even more expensive than they would be in a nice, slowly churning upward market.  Can you imagine what that means to the poor "stock investors"  now wanting to start buying options to "hedge" their accounts as some "advisors" will suggest to them....and for the sellers more than willing to let them?  :o ::)

OK fortunately for youse all....the plane's finally run outta gas.    BZZZZzzzzz.......

Disclaimer:Btw, I'm just an old retired firefighter, with zero formal financial education (if you don't count the School of Hard Knocks)....degrees, licenses, certificates, or any such thing that would suggest you take a single word of the above as accurate, a suggestion, and/or advise of any kind....but rather just a dude sitting on his couch bored to death with the markets closed, and bemoaning the fact that it's rained the past several days round these parts, and I ain't been out on the board for as many days, and may not go out for a couple more, until the "runoff poop patrol police" say it's at least somewhat safe to get back in the water.   Have fun all....

1281
Random / Re: Your political persuasion
« on: August 11, 2015, 04:03:37 PM »
Hmmm, I guess I'll be flipping a coin.....
Jeb - 76%
Hillary - 76%
The Donald - 75%
Weekend at Bernie's - 74%

I'm looking for the ticket of Pono Bill, Headmount, and PDX as Sec. of State.  Hopefully their first order of business will be to open up all State and Federal beaches to SUPs...after that, y'all can do whatever ya want, I trust ya with the keys to the car.  8) :D

1282
Technique / Re: How do you popup on a smaller board?
« on: August 09, 2015, 01:56:24 PM »
Hmmm, I guess I'm missing something....but why exactly are we paddling a "Stand Up" paddle board into a wave on our knees anyway?

If the board is too small to balance and paddle around standing up, and into a wave....I'd suggest you get more time on it somewhere safe off by yourself until you can (which may be what you're doing), or go back to the bigger board to "Stand Up Surf" on if you're around others out there.

Sorry, but have just encountered too many....for no better word..."kooks" in our lineup over the years, knee paddling all over the place in everyone's way, and trying to "knee drop" into waves, with zero control of their board (or themselves), and are just plain dangerous out there.

Now if we're talking about simply knee-paddling a SUP without a paddle in hand, as just a more stable longboard....

....that's fine.  But if you're trying to "popup" from your knees with a paddle in your hand like a surfer, I think you're putting the cart in front of the horse in the learning curve of a completely different sport.

JMO.... :-\

1283
Share the Stoke / Re: Who do you get your stuff from?
« on: July 24, 2015, 08:58:26 AM »
Boards directly from the shaper/factory.....Chelu Performance, and "Corran" Addison (before he move to Canada :( :'()

KeNalu Paddles, a BIG shout out to two Zoners....Ralph ("Sup-position"), and most recently Chris ("capobeachboy"). 

All have delivered excellent customer service, great prices, and are awesome to surf (ie. demo boards) with....sounds like the perfect trifecta to me.


1284
Random / Re: Retirement
« on: June 09, 2015, 01:24:53 AM »
This thread sort of got buried, but I thought it was a pretty interesting read, especially the "efficient market theory", and almost auto tax loss harvesting with the "robo" or automated systems that I'd not heard or thought of previously.

Anyway those of you into the low (and in this case zero) cost/fee mutual fund investing group, there is another consideration out there that I just sort of stumbled upon (thanks Yahoo Finance) which is at least worth a good looking into by those looking for greater flexibility in their "diversity".  How about being your own mutual fund "manager" of creating your own "fund" of  up to 30 stocks, investing as little or much into it as you like....all for $9.95 a trade, and no annual management fees?

Now I have nothing to do with this company, don't even have an account (not my kind of investing), but Motif Investing might be something that those looking for an alternative to mutual funds or ETFs might want to at least poke their nose under the hood there to see if it's worth kicking the tires, and turning the key to see if she'll go.

https://youtu.be/1fPyNE9111M

Here's what some industry folks are saying.....
Quote
"Goldman Sachs and JPMorgan Chase... are among those who have poured $86 million into Motif Investing..."
- Samantha Sharf, Forbes
Quote
"Combines the intuitiveness of Apple's iPhone with the power of institutional class investing."
- Erik Shatzker, Anchor and Editor-at-Large, Bloomberg Television
Quote
"Motif is trying to do for thematic investing what discount brokerage companies did for stock-buying by making it available on a larger scale and for lower fees."
- Paul Sullivan, New York Times
Quote
"Will This Start-up Kill the ETF Revolution?"
- Dan Caplinger, The Motley Fool

Best of luck to all in their future retirements....best "job" I've ever had to date, hope it works out as well for all others here. 

And thanks Bill, and others for sharing your thoughts and help, I think you're doing as well educating/informing, as most other financial "professional" looking to get paid for their advice are doing.

1285
SoCal / Re: HB firing today!
« on: May 16, 2015, 09:30:13 AM »
Ralph must be you guys' Wave Whisperer.  His pics always seem to be on great head or overhead shouldering waves.
That's for sure...

Every time I'm up in that neck of the woods, it's such a closed-out, beach break mess, that it's almost unridable. 

Never once have I been there and had it line up with such pretty looking lefts for this goofy-footer....that Ralph seems to always post here, and I end up drooling over.

Now admittedly, I don't get up there too very often...and with my wave luck and the conditions I run there when I do....maybe you HBers should be happy about that.  :o ;D

1286
SUP General / Re: SUP hate forum from Swaylocks.
« on: April 17, 2015, 09:31:46 AM »
Yeah, old news and things are getting much better IMO....not great, but better.

StandinDan and I were at Boneyards (one peak north of Swamis) the other day, and had not a single problem at all being in and amongst the other surfers.  Had a couple even initiate some pleasant conversation about the day, the conditions, our boards, whatever, not a single unpleasantry....couple years ago, that wasn't the case.

Now had we floated a few hundred feet south into Swamis' lineup, I'm pretty sure I wouldn't be saying the same thing.  But hey, at least the "nails on the chalkboard", squealers aren't out and about as much as they used to be.

Maybe it has to do with the fact that as Old School mentioned, our boards are now shorter than a vast majority of the whiners, so they've kind of lost their steam of, "Hey, get those big old things out of here!" when our response is, "Really?  These boards are 7'7" and 7'8"...how big is that longboard you're stilling on?"....shuts 'em up every time.  ;D

Heck, even the sacred "line of demarcation" at Old Mans is somewhat of a floating boundary now, depending on conditions, numbers in water, and how you play the game. 


1287
Random / Re: Corran Addison SUP Kickstarter in Trouble
« on: April 16, 2015, 06:26:20 PM »
Wow, I'm surprised and disappointed to hear, and read what I am about the situation.  I've know Corran for several years now, and have always had great times when with him surfing or just hanging out him and his family on the beach.  His personalization of boards for me has led me to some of the best boards I've ever surfed, and look forward to the one in production with another boardmaker that Corran also had input on with that shaper.

That said, I hope that he works his butt off to get all those who supported his Kickstarter program the "rewards" as promised, and in a timely manner (meaning, "NOW!")...and will speak to him about such if I happen to see him before he heads to parts north.

Wishing all the best to all of those involved....

1288
SUP General / Re: CA State Park Provision Conflict
« on: April 14, 2015, 09:16:46 PM »
2rivers, you might want to take a look at the "SUP Advocacy" forum on this site, and take a look at this thread to start with.

You are not the first to encounter this, nor the first to take up the cause...I wish you the best, and offer my assistance when and where you might need it.  I offered this last September....if that's of any help.

1289
STOP - don't throw it in the dumpster ! That can be fixed and he'll still have a light, strong rip-able board.
Too late!! Besides, he would have had to make it about a 5'8"x28"x4" board....because he never did find the front 2-1/2 foot nose section of the board from what he told me, when I said the same thing. ;D

1290
Did the wave T-Bone it? Lots of boards will fail if hit just right... I like "sandwich construction" myself. The harder PVC foam layer tends to stiffen the board and adds to durability... Paddle on,   JD
"T-Bones" are brutal....

My buddy's board was 3 weeks old when with a 8' wave approaching as he was paddling out, and fearing he couldn't get over it quick enough...dove forward off his board towards the bottom of the wave, allowing his board to float peerlessly at the end of his 8' leash, when the wave broke right on top of it. 

So his once pristine new board on the right....

...turned into this dumpster ready model below in a heartbeat....
   :o :(

A nice ending to the story if you could call it that; is that our shaper made him another one for cost, since the board was so new, and he felt bad for him, even though wasn't his or the board's fault.
He's just that nice of a guy...at least to us.  ;D ;D

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