Wed, Mar 4, 2015, 3:47 PM EST - U.S. Markets close in 13 mins.

Recent

% | $
Quotes you view appear here for quick access.

American Capital Agency Corp. Message Board

raybans2 14 posts  |  Last Activity: Jan 14, 2015 3:48 PM Member since: Dec 15, 2005
SortNewest  |  Oldest  |  Highest Rated Expand all messages
  • Reply to

    I got out yesterday morning

    by raybans2 Jan 14, 2015 2:57 PM
    raybans2 raybans2 Jan 14, 2015 3:48 PM Flag

    Not sure what you mean that lower rates imply lower stock prices. Lower rates cause bonds to be unattractive which is the competition for stocks. Also it allows companies to borrow money at lower rates allowing them to expand and to make higher profits as their borrowing cost are lower. This lowers PE and thus gives the stock price the ability to increase. Basically you should be able to borrow the money to buy a company and have the profits pay for the interest on the loan or the company is over valued. Thus lower rates allow you to still accomplish this with a higher stock price. I think you have it backwards, higher interest rates causes stock prices to decline. Lower rates is cause them to increase, if nothing else has changed.

  • Reply to

    now i'm a believer

    by electrowing Jan 14, 2015 1:19 PM
    raybans2 raybans2 Jan 14, 2015 3:07 PM Flag

    If we correct I think it will not be anything like 2008 because the US economy is not showing signs of entering a recession. Minor corrections are common. That’s what we live for. And is why I am not short TVIX right now because I'm guessing there is a better entry point in the future.

    You cannot ignore the price of oil. But it is confusing because in the past oil price fluctuations were basically due to changes in demand. But in the last few years there has been an unprecedented surge in surge in supply. So it is harder now to conclude that lower oil demand implies that economies are slowing down world wide. There may be some of that but the US economy is growing. So the jury is still out. We really don't understand this yet.

    In any event, a lot of investors may interpret the current situation based on traditional metrics and thus we are likely headed for higher volatility until people figure out otherwise.

  • raybans2 raybans2 Jan 14, 2015 3:00 PM Flag

    Everyone who is making money on this stock is shorting it on peaks. If you are long and losing money then that isn't the fund manager's fault. You're just on the wrong side of the trade. That's on you.

  • I covered my short for a break even. It looks to me like volatility might be higher for a while given global financial instabilities so I decided that my short entry and exit points were too low now. Im not sure what my new strategy will be. I just know it isn't likely to be what it was. I will watch the VIX index and try to determine how it is more likely to behave from this point on. All I know is that volatility has increased and seems to be leveling off for longer than it has done in over a year. This means that the market is not behaving as it was so maybe I need to take this into consideration. I'm certainly not going to leave my money in the market until I think I get a better handle on this as that would be foolish.

  • Reply to

    This stock could make me Rich

    by raybans2 Jan 8, 2015 5:37 PM
    raybans2 raybans2 Jan 9, 2015 4:24 PM Flag

    If there was no contango decay then one could easily argue that the risk were the same. But look at the two year chart and see what the decay does to the stock price and then try to argue that it is safe to hold this stock long based on what you see. Anyone trying to make such an argument will look like they are incapable of drawing accurate conclusions once given the facts.

    Second, you want a stock that has an easy exit which means its price is stable about the time you want to exixt so you have time to make your exit decision. But these peaks last less than a day so most longs allow the peak to allude them and sell too late. So the gain they imagined they would get by looking at the chart they never actually get because they didn't have time to decide that they were at the right time to sell. Then they get trapped into holding because they missed it. Then they lose it all. The short on the other hand has all the time in the world to cover because the VIX levels off between peaks.

    Note that all the long term posters on this message board are shorts. The longs never last more than a few months which is the amount of time it takes for them to tire of losing money.

  • Reply to

    This stock could make me Rich

    by raybans2 Jan 8, 2015 5:37 PM
    raybans2 raybans2 Jan 9, 2015 1:23 PM Flag

    If you go all in you will get screwed with either approach, long or short.

  • Reply to

    This stock could make me Rich

    by raybans2 Jan 8, 2015 5:37 PM
    raybans2 raybans2 Jan 9, 2015 1:21 PM Flag

    And there is another thing you can count on. TVIX is a futures investments so they are buying future options whose value decay with time. This means that TVIX's price will always go down long term. It has to. So the long term investment strategy favors the shorts. The the buyer of TVIX has to play short term, on the order of days, not even weeks. This is the opposite of most individual stock investments.

    Also the entery point of the long is rarely precisely timed. They usually buy way to early so they incur significant contago decay as they wait for a peak they have no clue as to when it will occur. Could be a week, could be 6 months. They cannot predict it. The short on the other hand doesn't even consider his position until he sees a peak forming. Thus there is no guessing. He enters after he knows a profit is guaranteed. Not before. Thus the shorts investment approach is very low risk. The only risk is that you start to short and the VIX goes much higher. And thus the reason for only investing 30% of your portfolio so you can wait it out.

  • Reply to

    This stock could make me Rich

    by raybans2 Jan 8, 2015 5:37 PM
    raybans2 raybans2 Jan 9, 2015 1:11 PM Flag

    I also enter over a period of 2 to 3 days shorting some early, some right at the peak, and some late. That way I know I get some good hits. I still make money on the first and last positions just not as much. But if you don't do this you may miss it altogether or short it all too soon and make less. Both senarios being worse than what I do. That said this last peak came quicker that I had expected so I missed the first position. Got one in at the peak and one in late. It's a plan, but its not written in stone. You try to do your best.

    I'm still short. It hasn't gone below 15 yet.

    What I like about this is there are a few things you can count on. One is that the VIX will always go back down eventually. Unlike a stock that can keep going up forever the VIX will always come back to below 15 eventually.

    You need to be cognizant of market conditions. Right now 15 and 20 are good trigger points but we are in less volatile times. At other times these trigger points would have to be raised as volatility would be too high for these points to work. What you are trying to do is set the lower trigger point slightly higher than the typical bottom and the higher trigger point slightly lower than a typical top. So obviously as the typicals change so will the trigger points.

  • Reply to

    This stock could make me Rich

    by raybans2 Jan 8, 2015 5:37 PM
    raybans2 raybans2 Jan 9, 2015 12:58 PM Flag

    I have done this 4 times since I figured out that this stock is always eroding downward with time making it very safe to short. Once I determined this in January of 2014 I entered my first position shortly there after on the first VIX peak. I have done the same thing on every peak since then. Not once have I walked away with less than a 20% return. I have never lost money doing this.

    If there is a long gap between peaks this stock erodes downward because of futures contango. That kills the long who is waiting for the next peak which he has no idea when it will be. Then he has to sell with in a few hours of the peak to get his money back. The short on the other hand doesn't invest until he sees the peak is occuring so there is no guessing or waiting. Then he gets out when he has made 20% to 40% profits. Don't get greedy. I know the chart says you can make more but then you may lose the sure thing.

  • Reply to

    This stock could make me Rich

    by raybans2 Jan 8, 2015 5:37 PM
    raybans2 raybans2 Jan 9, 2015 12:50 PM Flag

    I only short about 30% in case we have a black swan event. But this would only happen if we enter a recession and negative unemployment reports are always forth coming before the market reacts. In that case you should be all cash and doing nothing.

  • Reply to

    This stock could make me Rich

    by raybans2 Jan 8, 2015 5:37 PM
    raybans2 raybans2 Jan 9, 2015 12:48 PM Flag

    I never go long. Too risky. Much safer to short this stock because you have a longer time to exit.

  • Reply to

    This stock could make me Rich

    by raybans2 Jan 8, 2015 5:37 PM
    raybans2 raybans2 Jan 9, 2015 12:48 PM Flag

    Fidelity. I have had them modify my account settings so I can short hard to borrow stocks without calling in.

  • I just keep shorting it every time the VIX goes above 20 and cover when the VIX goes below 15. Have never lost a dime doing this. Works every time. And since my account keeps growing at an outrageous rate my positions keep getting larger and I keep making more. This is like free money.

  • Reply to

    2015 - FED FUND RATE HIKE !

    by dr_klumps Nov 25, 2014 3:52 PM
    raybans2 raybans2 Dec 5, 2014 1:30 PM Flag

    This positive jobs report pretty much says that there won't be a reason for the Fed to not raise rates. And I agree that since oil prices will reduce the cost of energy and thus the cost to produce anything this will help companies keep cost down and also will give consumers more money to spend. However what I am not certain of is will they raise rates more aggressively in 2015 or 2016. And there is the housing market to consider as a lot of people are now getting home equity loans and this is adding stimulus. Also they are loosening lending standards. Actually what they did was more accurately define what would be the level of liability of the originator for a bad loans so they don't have to imagine the worse case scenario anymore. They can more accurately quantify their risk. Thus it is assumed that lending standards will get looser as a consequence.

    I'm still playing the market volatility. I've shorted TVIX on 3 VIX peaks which corresponded with market dips and my combined rate of return for this investment strategy has been 85% since Feb. 2014. Since the rate of return is so high I only have to invest about 1/3 of my accounts' worth and leave the rest in cash. As a result my accounts have trended up at a very low rate of volatility, contrary to what one might have expected. In my IRAs I buy SVXY since shorting is not possible. Since I'm batting a 1000 with this strategy I think I will stick with it as it seems easier to determin a safe buy in and exit. I like the fact that high volatility always returns to low volatility eventually without exception. Thus a safe exit is guaranteed given enough time.

AGNC
21.40+0.06(+0.26%)3:46 PMEST

Trending Tickers

i
Trending Tickers features significant U.S. stocks showing the most dramatic increase in user interest in Yahoo Finance in the previous hour over historic norms. The list is limited to those equities which trade at least 100,000 shares on an average day and have a market cap of more than $300 million.