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Messages - DutchNurse

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1
I see that these 'window trades' get matched at exactly the spread midpoint, it says.  Do you not have any control over this, like a limit price on the window trade? 

I am curious about this, too. I would be very uncomfortable about being forced to purchase only during their trading window, especially if you can't limit the purchase price. It opens up the very-real possibility that someone is front-running their trades. At minimum, it allows them to make an off-market deal with a market maker of their choosing, to place a market order straight into the bid/ask (assuming it's even the best price among the exchanges) in return for some form of kickback.

You are most likely paying much higher than $29/month for these trades.

While your conspiracy is an interesting one, I would I highly doubt its true, seeing the close regulation of the SEC on all stock holders/employees of the company.

There can be multiple exchanges that a stock trades on; not just the NASDAQ or NYSE. This is especially true for options. Who is to say they don't have a deal with a specific market maker at one of the smaller, less-liquid exchanges (where the bid/ask spread is 3-4 times larger)? It's a 100% legal way to rip clients off and it happens all the time.

Don't doubt the amount of unethical behavior that exists on Wall Street. Heck, since the beginning of time, virtually every brokerage firm has been lending shares in their client's accounts to traders and hedge funds to sell short, while keeping the interest for themselves (instead of paying it back to the client). And don't even get me started on the IPO process...

It's much more likely to happen with options. I will say you are NOT allowed to choose exchange explicitly like you are in something like TradeStation. Then again, choosing your exchange though isn't necessarily common practice for internet brokerages either. Not too many stocks are traded this way anymore and while it is possible its not all THAT common. ADR's and smaller companies sometimes still do this like .TO exchange companies and foreign based like stuff based in the carribean and netherlands. I'm not saying it doesn't happen, I'm saying it is the minority of companies and Folio is kinda geared towards making your own "ETF" strategy further diversifying you and making any possibility of a cross listed holding be an even smaller % of your holding.

2
Investors - LC / Re: Grace period needed after first payment
« on: November 30, 2013, 03:32:11 PM »
Oddly enough this guy paid up. Remarkable.

3
Investors - LC / Grace period needed after first payment
« on: November 24, 2013, 09:32:59 PM »
Well whats the chances this one comes back with going into grace period after one payment? Similar stories out there? Interestingly his (or her!)  credit is trending is up.

https://www.lendingclub.com/account/loanDetail.action?loan_id=7377876

4
I use this for my mechanical investing I program off value line data. Great to swap in and out of 10 or 15 positions with window trades. Honestly helps with mechanical investing. I don't really even get a great read out of whats up and whats down like I could with scottrade or trade station. Makes it easy on me to be unattached to holdings and just trade my rules. When you log in you see "portfolio" and the value of the whole thing not the individuals which is kinda the bigger picture your worried about if you want to invest mechanically and unemotionally.

I wouldn't necessarily recommend their own portfolios, but there are probably a few which are decent, like the time tested Dogs of the Dow.

It's a lot like owning an ETF or mutual fund - the exception that most mutual funds switch their strategies during mid life crisis and thats exactly why huge percentages of mutual funds underperform the S and P. You don't want a mutual fund that switches strategies just because the law it uses are 'out of favor' at the minute. This way you stick to your guidelines instead of the succumb to the pressures of some manager who's down over the last 6 months on a strategy thats just about to turn around but which he's going to abandon because of pressure from up top.

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Investors - LC / Re: Increased Rates for 60 Month Loans
« on: October 31, 2013, 04:08:43 PM »
I always took it to mean 60mo default rate was higher? Maybe I missed something?

6
Are there fine print for these accounts? Like "'must use debit card X times per month?"

7
Off Topic / Re: The Stock Market Thread
« on: September 15, 2013, 10:06:25 PM »
I've read alot by O'Shaughnessy - What Works is a great book. I'll be looking into the others.

By the way Anil, checked out PeerCube and your blog bout 3 hours ago - haven't stopped reading. Thanks for all your work there.

8
Off Topic / The Stock Market Thread
« on: September 15, 2013, 06:21:19 PM »
It was suggested a another thread be created after the thread "How much is too much to invest in LC" kind of turned into a market thread.

Maybe we can post macroeconomic views, opinions about rates, and big news. This isn't the reason we are here, but I think the other thread made it clear that there is a wealth of knowledge out there which is hard to find.

I'm not sure how best to continue this thread, but, if there is enough interest maybe we can start with what we consider here to be ways to select a stock. It may be that we are only here for P2P lending, and that, of course is ok, but in case there is more interest in anything more on this topic I'll go first to spur on some conversation.

I lately make use of the screener on FinViz.com to fill my radar for 'possibles' and like to look for +current earnings, +annual earnings, +sales growth, +instituional ownship growth or accumulation. I guess in a very general overview I like to stay more or less to CANSLIM for my strategy, but i'll try own cyclicals, defensives, inflation sensitive stocks, and some interest sensitive stocks at the same time - although I am very leery about owning banks.

Currently long: CYOU, FII, GIII, GPS, HD, IBA, ITRN, LUV, NP, SGBI, SXL, TARO, TGI, TSN, UHAL, UNP, VLO, WLK, WX

I recently unloaded TSLA as I have thought for a while now that it's just too far ahead of itself.

I guess besides screener strategy and portfolio critique or comparisons, another topic for conversation could be something more along where we left off: manipulation of market metrics and is the market even a safe place anymore (and if not, where is!).

I really hate to take a doom and gloom approach to the world but are we really living a parallel of Plato's allegory, The Cave and is there any hope for humanity?   



9
Agreed.

I'm actually learning from everyone here - so I apologize if anything has heated up tempers, so first and foremost, thank for all the responses I love to hear them and that's why I am here and I AM grateful for the opinions of people who very likely know more than me.

All this tells me is that I have alot more to learn :)

10
I realize its not popular to say PE (note: I'm talking about ttm pe as its normally reported - not forward pe) isn't important... But if a company has enough recent history of earnings growth and I have reason to believe it can continue, pe is really a lagging and thus maybe not the most meaningful value. I'm not saying I never look at it, I'm very likely not going to pay 200 dollars for a dollar of earnings... But there are plenty of companies (and not akways tech) that grow so fast in their first ten years of business that a pe of 50 wouldn't scare me. I never said its meaningless - I just said the first thing you should look at is earnings growth.

If you are never willing to entertain stocks with pe higher than 25 or even 50 you can miss big and that IS back tested fact.

Xerox, syntex, northern pacific railroad (1900), gm (1913-1914), Genentech, RCA, rexal (Tupperware), McDonald's (67-71), google, aol, levitz furniture, Amgen, Houston oil and gas, hansens natural drink (monster energy drinks), cisco( lol!), apple started rocketing in like 03-04 and kept going, and there's dozens of others...

These all had absurd pe values when they were climbing, but as the earnings grew, their pes eventually began to look more reasonable interestingly enough as their earnings growth declined and the prices caught up to rational levels for their earnings. Generally is you have waited for a "reasonable pe" on any of the above stocks - you've missed the vast majority of their explosive growth.

But it is probably true that a higher pe stock is not always the way to the least volatility.


11
I could care less about pe of a stock really. Look at Cisco systems before it went up 10,000% (and there are countless other examples!). Pe is a lagging indicator. The game never was but a low pe stock - that - if and when it happens to be is coincidence; correlation yes but not causative correlation.

Not that there is any one golden metric any how... But I cringe a bit when pe is inferred as the all important metric  :-[

12
That could happen if there is a large buyback and the stock pays a nice dividend - the company will save money that it would have previously distributed to shareholders. It CERTAINLY boosts shareholder equity though - thats sometimes actually a main component of these old boring but reliable stocks are winners.

I'll check my library for spectators edge... ;D

13
What would you do from this point on?

Wow, abberation!  I think I might find a rich woman to marry and forget about the markets.  You may be too jaded to invest in anything and sleep at night.

Haha, the more you learn about the workings of the markets, the more you realize things are held together with a lick and a promise. It's hard to eat sausage when your job is making sausage, or at least auditing the sausage makers. Maybe I am too jaded and untrusting of the markets, I just can't see how 8-9% yearly S&P index growth will keep happening when revenues are flat and all the EPS growth is coming from cost-cutting. Consumers just don't have the money to spend. I guess this is why I tend to stick to a dividend growth strategy, at the very least I know I have the yearly dividend coming in, and that it will grow every year.

 
 

I completely agree with earnings propped up by cutting. But earnings are still what matter. I see what your saying, but think of it this way:

Cost cutting --> boosting earnings now --> they have more available capital to allocate toward future growth operations, paying down debt, hell even investments or new equipment/retooling. All of that can mean a bigger, more solid bottom line going forward funded more on cash than credit - and thats what counts. Future expectations. Honestly? The economy is evolving, companies need to too. Laying off a workforce to reorient operations ala best buy was NECESSARY. In the future, best buy can pop back with their new strategy. True, it will never be the best buy hell hole I remember from 10 years old christmas shopping with lines moving slower than the DMV, but whats important is that, as a reconfigured corporation without big box? It could potentially experience new growth.

Any way you look at it, when a companies earnings go up big time, its a win. Even if it is from cost cutting and layoffs - IF that company is successfully evolving in life after the cuts. But this also depends on the sector you audited. Retail? Sure this cost cutting bullcrap happens all the time... But Union Pacific (which I've been long for like 4 years now) is always going to be Union Pacific  and thats not going to change much. They have monstrous engines, cars, lines and there aren't even a boatload of cutbacks available to this type of company.

It's true, lay offs and pension renegotiations are a great way to boost a quarter. If it looks like that company has a good plan with which its going to direct the saved capital? It's seen as a good thing. If its a company turtling up into it's shell before it's finally snuffed out, it's a bad thing. Thats what fundamental analysis is all about.

One thing you can be sure about: that cost cutting earnings propping is happening. Companies are making windfall profits. If they can't use that money for future growth though and change themselves like the economy demands? It's still a dead company.

14
Inexperienced with LC but...Maybe inexperienced in terms of life in general - but I have a decade of stock market and if this is you...

...I'm in a similar situation to you (if this is you) and I think its easy to think the same way - fearful about where to put the money.

First I like the stock market a whole lot more than LC...

I like how your at least in a lower cost ETF than a mutual fund (which are all CRAP. The best ones simply match the SnP - and if your lucky they charge you 2% to do so). But just play the market by yourself, learn what CANSLIM is, stick to a strategy you'll end up much better off. Heck, one of the best back tested strategies is to every year buy the top 10 dividend payers in the dow, and repeat, cycling stocks as their yields change. Dogs of the Dow. Easy peasy.

IF you can STRICTLY stick to your strategy (takes guts) in the market and weather storms historically the S and P has almost everything beaten on a long enough time scale and thats what I look at. I'm young, and time is on the side. If there is another crash I'll just buy on the way down systematically and ride it back up. I'm not retiring for quite some time. It's hard to get cynical about dull companies like crown cork and seal or neenah paper.


Of course I also know a guy who retired, took his entire (almost 400k IRA) and bought bonds in a local nuke plant during construction at 14% that was tax free because these particular bonds were municipal contributions to the plant construction. Guy never looked back. Makes life simpler...But I could also win the lotto.

Read books by Peter Lynch, 'how to make money in stocks' by bill o'neil, intelligent investor by ben graham, all the books by James O'Shaughnessy (what works on wall street!)...I can't think of too many more at the moment, but I'm self taught and seem to do very well with information from those.
Eagerly awaiting to hear more from my elders here.

15
Investors - LC / Re: Lending Club IPO
« on: September 13, 2013, 01:47:06 PM »
Ugh.

Reminds me of the facebook IPO, although I believed more in that just because of the platform and sheer quantity of subscribers.

I know historically IPO's do fairly well after issuance but I'm glad I steered clear of facebook (although its an improving story) and I'll be steering away from Twitter.

As buffet said, "If you can't understand how it can make money, don't buy it'. Or something along those lines.

I just don't see sheer numbers of users translating easily into profits for either of these companies. Toom complicated for me.

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