Commodities

[marksmeets302]

Seems a good time to get into good quality energy companies if you have a long term outlook.

Do you invest in individual companies Andy? A couple of years ago I got burned a couple of times with companies that were cooking the books, fraud etc. Since then I've switched to index funds like VTI and EUN2. Of course this also removes the impact of the occasional high flyer but I can't be bothered by that. How does it work out for you? It seems scandals are popping up way more often than say 15 years ago. Maybe sound analysis can avoid being in those stocks.

The only individual stocks I track are flow and virtu, because they are unlike other equity - in theory they should profit from declining markets.

gold is pumping today. We're eating steak.

[Archangel]

Well done on Gold

Personally I trade options, mainly selling premium. Thats why i want more VIX

[andyfuller]

Do you invest in individual companies Andy? A couple of years ago I got burned a couple of times with companies that were cooking the books, fraud etc.

Yes though I don't invest in really small cap stocks where you get those kind of issue. I look at mainstream companies.

[marksmeets302]

Oil futures taking hit after hit, with a large one today. You could say this signals less demand and therefore less economic activity. Until recently that wasn't viewed as a problem, but now gold is going up and maybe as an effect (or cause - who knows) the stock markets are declining. It will be interesting to watch this correlation.

[andyfuller]

An interesting correlation I heard today was as oil price falls drivers drive more miles which leads to more accidents which leads to more claims against insurance companies which will feed into higher insurance prices.

I think now with a long term outlook is quite a good time to be looking at getting into the energy industry, especially on the supplier side.

[Archangel]

Gold is interesting. Been a long decline with the strong dollar and stocks.
Its been a while since I have seen Options traders going bullish but there is defintely that sentiment turning now

[Archangel]

Thursday was the worst day to hit the world markets in 18 months. China fell 4%
Oil continues to decline so there is definitely some flight to Gold and Treasuries as a sort of 'safe haven' . VIX is exploding which is good news for options trading

[marksmeets302]

I'm interested in your approach... When selling premium, do you also add longs to control risk?

If not, you might also want to consider shorting the vix future directly. This will lower your transaction costs and at the same time make sure you are diversified into a full basket. A sudden bankruptcy of one of the components will not hurt you that much then.

[Archangel]

I guess for selling premium I am comfortable as I can win in a few different scenarios. With price direction i can be profitable if the price stays the same, moves against a little, or in my favor. Buying premium would only give the trader the opportunity to profit in one direction. Obviously in a high IV environment we can benefit as sellers as we can profit from an IV contraction too. There is also the Theta decay, or time decay that all options have
Obvioulsy , as you say there are ways to hedge and control risk. There will always be moves outside the Standard Deviation that casue losses but i guess its about probablilites at the end of the day

[Euler]

From darling to disaster, it seems Glencore could be in serious trouble. But I learnt long ago to avoid companies with significant debt burdens, especially in cyclical industries. Quite amazing to see this unfold though. Maybe should have shorted it!

http://www.bbc.co.uk/news/business-34388600

[Euler]

Glencore is a good example of how if you avoid dogs you can outperform a tracker fund. Especially in a cap weighted index

[Archangel]

Theres great opportunity in the Bonds at the moment. Some big moves in there daily and not always following the usual relationship with the indexes.

[marksmeets302]

Glencore is a good example of how if you avoid dogs you can outperform a tracker fund. Especially in a cap weighted index

Avoiding dogs is a difficult game. Guess I'm better off sticking with the index

For instance Volkswagen... who would have thought?

According to an article I read, in the Netherlands we had (just this year!) Fagron, Heijmans, Besi, Altice, Delta Lloyd, Arcadis, Gemalto, Aegon, Ordina, Imtech, Ballast Nedam, Macintosh, Vopak, Telegraaf, ArcelorMittal and Galapagos. That's 20% percent of our big cap and mid cap stocks!

Theres great opportunity in the Bonds at the moment. Some big moves in there daily and not always following the usual relationship with the indexes.

Absolutely!

[Euler]

If you had invested in the Bloomberg Commodity index in January 1991, you would not have made any money for 24.5 years

http://www.beyondproxy.com/investing-in-commodities/

[Euler]

The Rise and Fall of Commodities Hedge Fund King

http://www.bloomberg.com/news/articles/ ... em-kooyker