Originally Posted by
Seneca Pilot
Trading is not kids play. You can destroy yourself if you aren't built for it. I am just trying to make sure everyone understands that.
Absolutely. The most successful traders seem to be the ones who know how to take losses, not just pick winners.
Originally Posted by
Seneca Pilot
The most successful investors will always be doing what they enjoy spending the time and energy to get good at. If real estate is your thing you will be better at that than stock picking. I had rentals from 1989 to 2006, made a lot of money but just got sick of the 2AM calls about overflowing toilets and repairing tenant damage at the end of every lease. I sold out when the market went crazy last time. Right now sort of reminds me of those days.
All this talk of Delta, Theta, Vega, Beta, etc. has me thinking about real estate metrics. One I pay close attention to is the $/toilet ratio. We don't have a fancy Greek symbol for it, but higher is better. Self storage can get you north of 3,000,000:1. If investing in an asset class where a high $/toilet ratio isn't an option (residential), scaling the size of the portfolio where you hire employees makes a huge difference. The current high prices have tempted us into listing two of our smallest assets. We are re-deploying the capital into passive MF and pulling out a small amount for an options trading experiment. We've also taken advantage of the low rates to cash out refi and reduce risk with non-recourse debt.
Originally Posted by
mispoken
It’s interesting how people view risk. Asset heavy properties that rely on others to pay your mortgage seem risky. It seems high overhead and the risk of the mortgage payment always is risky. But, you’re comfortable with it and I know it’s not as risky as I perceive.
Your perception of options is that it’s very risky, but I’m very comfortable with them.
No one is right or wrong, it’s just an interesting observation in how people perceive risk.
Most importantly, risk is what allows us to make money in our respective areas of expertise. So, we are all more similar than we think, in terms of risk tolerance.
Options aren't all that risky when managed properly by an educated trader. I've traded the simple strategies off and on for nearly 30 years. I just got tired of managing positions. The WB reserve schedule over the last year has given me time to take on some other personal interests, so I've returned to options trading. The biggest risk is losing time more than money.
Real estate comes with a wide range of risks. Buying an existing asset with a history of income is not very risky. Like options, you have to know the market and what represents a good price. You are absolutely correct about the relationship between risk and expertise. I'm working on my expertise in stocks, options and futures as a risk reduction measure. Knowledge and expertise definitely reduce risk and allow investors/traders to identify safety where others fear risk.