Originally Posted by mispoken (Post 3172587)

As a personal preference, I don’t use accountants to guide my investing.



As for burning through cash; if that’s a concern at this phase in their growth, consider they expect to be FCF positive for all of 2020. Think about how quickly they came from their nearly fatal balance sheet to where they are now. They’re just getting started.



As for the reason for the cash burn; look at where that cash is going....the development of the S, X, 3, Y and Cybertruck? Battery development? Built out of

factories (both for autos and batteries)? Build out of supercharger network? Build out of mobile

support fleet? Self driving software? Software beyond self driving? Build out of salesforce?



They’re investing, it’s not as if Elon is just taking this cash and buying pot :-)



We are in a new era of companies; I’m not sure if I’ve said it yet (haha) but traditional metrics used by academia and talking heads are utterly useless.



Look at the gross margins of these SaaS companies. Who's had those types of margins

in the past? Nobody.



Look at how easy it is to scale now - compared to the past. Takes very little capital and very few boots on the ground. Was it like that in the past where everything was physical?



Look at subscriptions? That revenue and whatever you retain largely goes right to the bottom line. And it is repeatable.



With Tesla, what is the #1 car company, the #1 power company and tons of subscription possibilities (self driving taxi fleet, software updates, etc....) worth? Much more than looking at historical data ratios. It will take a lot to get there, but I can see that path.



What is Fiat-Chrysler spending their FCF on? Advertising? Auto manufactures as they exist are dead.



Keep the thoughts rolling! Lots of good things to reflect on in this thread. Ultimately we all want the same thing: $$$$$$$$ :-)

Originally Posted by TegridyFarms (Post 3172594)

Here’s some advice. Since I’ve mentioned RMG in this thread a few times I will take you through what I do in my due diligence phase.
1. Find a company/industry/sector that I like.
2. Learn about the components of that sector or industry. In other words—what are the driving factors behind the successful companies and products in the industry.
3. Find the best in breed in that industry or sector.
4. I have an account on Stocktwits (free) and sometimes I will scour their message boards there. A lot of garbage on that app, but there is also some good info/perspective.
5. Invest.

The is purely an example of my strategy. Say you have $10,000. Don’t shoot your wad all at once. Take DAL for example. On profit sharing day let’s say you had $10,000 to invest in DAL. If it were me and I wanted to invest in an airline I would have invested $5,000 of it on that day. Owning a whopping 83 shares for $5,000.

Then literally one week after I started that position the bottom fell out. 2-24-20 that was $45.03 at its low. Not a good look in my portfolio. But you realize the environment. Panic selling. The market. Pandemic. Then you get excited because there is starting to be some major value here. Then on March 30th you see $22 and you know that is a sale price. So you buy. $2500 worth. 113 shares + your original 83 = 196 shares.

Then on May 11th you buy your last $2500 worth at $19. 131 shares. Add this up to your already 196 shares and you have 327 shares of DAL with an average cost of $30.58.

In this example you just went to the depths of hell and back. But your strategy which mirrors Tegridys strategy is to be disciplined, split up investments leaving yourself the opportunity to average up—or average down. If you’re consistent and disciplined you can make even a bad situation like this example work out okay. Buying at the high, buying more on a dip, and buying the last allotment on another dip.

$10,000 invested in DAL. $30.58 average. 327 shares.

As of 12/18/20 at close—DAL is $40.68 and now you can start thinking about your exit strategy! Your $10,000 is $13,302.

So having said that I always start off with investor presentations. Read, educate, decipher, dig, and formulate an opinion. Good luck deltoids. Example: https://romeopower.com/RomeoPowerInvestorPresentation_November2020.pdf

Originally Posted by TegridyFarms (Post 3172594)

Here’s some advice. Since I’ve mentioned RMG in this thread a few times I will take you through what I do in my due diligence phase.
1. Find a company/industry/sector that I like.
2. Learn about the components of that sector or industry. In other words—what are the driving factors behind the successful companies and products in the industry.
3. Find the best in breed in that industry or sector.
4. I have an account on Stocktwits (free) and sometimes I will scour their message boards there. A lot of garbage on that app, but there is also some good info/perspective.
5. Invest.

Here is an example of my investing strategy. Say you have $10,000. Don’t shoot your wad all at once. Take DAL for example. On profit sharing day let’s say you had $10,000 to invest in DAL. If it were me and I wanted to invest in an airline I would have invested $5,000 of it on that day. Owning a whopping 83 shares for $5,000.

Then literally one week after I started that position the bottom fell out. 2-24-20 that was $45.03 at its low. Not a good look in my portfolio. But you realize the environment. Panic selling. The market. Pandemic. Then you get excited because there is starting to be some major value here but you need to wait until this thing finds support and isn’t in a total free fall. Then on March 30th you see $22 and you know that is a sale price. So you buy. $2500 worth. 113 shares + your original 83 = 196 shares.

Then on May 11th you buy your last $2500 worth at $19. 131 shares. Add this up to your already 196 shares and you have 327 shares of DAL with an average cost of $30.58.

In this example you just went to the depths of hell and back. But your strategy which mirrors Tegridys strategy is to be disciplined, split up investments leaving yourself the opportunity to average up—or average down. If you’re consistent and disciplined you can make even a bad situation like this example work out okay. Buying at the high, buying more on a dip, and buying the last allotment on another dip.

$10,000 invested in DAL. $30.58 average. 327 shares.

As of 12/18/20 at close—DAL is $40.68 and now you can start thinking about your exit strategy! Your $10,000 is $13,302.

So having said that I always start off with investor presentations. Read, educate, decipher, dig, and formulate an opinion. Good luck deltoids. Example: https://romeopower.com/RomeoPowerInv...vember2020.pdf

Originally Posted by Trip7 (Post 3172595)

You can say traditional metrics are out of the window, but at the end of the day the basic principle of investing remains forever. When placing their capital with a company, an investor is buying a piece of a company and the goal is to get a return on their investment.

Right now when you buy a piece of Tesla'a business without growth you will get your money back in 358 years based on current earning(FCAU 8.3 yrs for comparison). Moreover, the intrinsic value of a stock is it's future free cash flows discounted to the present value. Right now Tesla is priced as if 90% of the world's cars will be Tesla and then some to achieve the required cashflow. Will Tesla out innovate every car company in the world for the next 10 years and have monopoly status in the auto industry? All self driving cars will be Tesla? Everyone's home will be powered by Tesla? All cars will have Tesla battery technology? There are some pretty bold bets given the current price

I'm not saying Tesla won't be a successful company. I think it will be. Do I think 10 years from now Telsa investors will make any money if they buy today and hold? Absolutely not. Right now successful investing in TSLA is based on the greater fool theory. Eventually the price will become so absurd there won't be any fools left to trade to. On that day, I wouldn't want to be stuck holding the bag :) https://uploads.tapatalk-cdn.com/202...5b612cd746.jpg

Sent from my SM-N986U using Tapatalk

Originally Posted by Trip7 (Post 3172595)

You can say traditional metrics are out of the window, but at the end of the day the basic principle of investing remains forever. When placing their capital with a company, an investor is buying a piece of a company and the goal is to get a return on their investment.

Right now when you buy a piece of Tesla'a business without growth you will get your money back in 358 years based on current earning(FCAU 8.3 yrs for comparison). Moreover, the intrinsic value of a stock is it's future free cash flows discounted to the present value. Right now Tesla is priced as if 90% of the world's cars will be Tesla and then some to achieve the required cashflow. Will Tesla out innovate every car company in the world for the next 10 years and have monopoly status in the auto industry? All self driving cars will be Tesla? Everyone's home will be powered by Tesla? All cars will have Tesla battery technology? There are some pretty bold bets given the current price

I'm not saying Tesla won't be a successful company. I think it will be. Do I think 10 years from now Telsa investors will make any money if they buy today and hold? Absolutely not. Right now successful investing in TSLA is based on the greater fool theory. Eventually the price will become so absurd there won't be any fools left to trade to. On that day, I wouldn't want to be stuck holding the bag :) https://uploads.tapatalk-cdn.com/202...5b612cd746.jpg

Sent from my SM-N986U using Tapatalk

Originally Posted by GogglesPisano (Post 3172600)

Good advice. Thanks.

Originally Posted by TegridyFarms (Post 3172601)

I’ll respectfully disagree. https://www.computerworld.com/articl...s-history.html

I remember when AMZN has its first full profitable year. I spent an entire semester of college in business school discussing AMZN vs WMT. Logistics. Balance sheets. Supply. Demand. Everything. Amazon would never ever ever ever exceed WMT. AMZN was around $45-50 at that time. We all had the same consensus. I watched for two years using the same little tools and everything you had in your post. Amazon was over priced. Revenue wasn’t enough, wasn’t sustainable, etc.

That was at $50-200 a share. Now $3,229 a share. Insane.

Same concept with Netflix. The biggest effing fail of my life was listening to some zacks or morning star garbage about how a company that mailed DVDs was overvalued at $40.

Not even a decade later my small investment would be worth $600,000 had I kept that money in NFLX.

Bottom line is—do your own due diligence and look at the future, study a company, and know the financials behind what they’re doing. Don’t give a rip what some widget on a website says about a stocks share price.

Trip 7–I have TSLA. I had 68 shares. Then reverse split this summer announced. 5:1. $17,700 is what I paid for that. That investment is now worth a small house.

Same with AAPL. That thought process that you presented isn’t a blanket approach.

Originally Posted by Seneca Pilot (Post 3172197)

I wouldn't risk my retirement account on any put plays, especially naked puts. Covered calls would be my retirement play. Covered calls can really juice up the returns.

Naked options are for play money.

Ask him:
Hedge Fund manager James Cordier apologizes after losing almost all of his clients money - YouTube

Or her:
Karen The Supertrader from Tastytrade: Is Karen Bruton the Supertrader a FRAUD? - YouTube

Originally Posted by JamesBond (Post 3172673)

I've made some very real money with them. They aren't as risky as most think.

Originally Posted by 123494 (Post 3172298)

I've never messed with options before. I've strictly been a long-term investor focused on good ETFs and a few individual stocks (~40 years until retirement).

How did you guys learn about options? Any recommended reading/videos? I'm planning on continuing my long-term plan but would like to throw some "fun money" into something else.

Originally Posted by LandGreen2 (Post 3172617)

Are any of you using the Snider Method? I remember there were quite a few Delta pilots doing this. For the middle age crowd a little more risk wary I remember them saying it was a little like hitting singles and doubles consistently. No home runs though?!?!

Originally Posted by JamesBond (Post 3172688)

Start by trading covered calls. You cannot lose money. (Standing by for the arguments about that, but I will win them). After you learn to do covered calls, try cash secured puts. Then branch out into naked calls and puts. I think I already said it, but all that exotic crap you hear about.. condors, butterflies, straddles, strangles... is a waste of time and money. And the best thing I ever read about options is that you never make money buying anything. Find the right horse, and it can be a very lucrative ride

dyodd, ymmv, etc etc

Originally Posted by TegridyFarms (Post 3172601)

I’ll respectfully disagree. https://www.computerworld.com/articl...s-history.html



I remember when AMZN has its first full profitable year. I spent an entire semester of college in business school discussing AMZN vs WMT. Logistics. Balance sheets. Supply. Demand. Everything. Amazon would never ever ever ever exceed WMT. AMZN was around $45-50 at that time. We all had the same consensus. I watched for two years using the same little tools and everything you had in your post. Amazon was over priced. Revenue wasn’t enough, wasn’t sustainable, etc.



That was at $50-200 a share. Now $3,229 a share. Insane.



Same concept with Netflix. The biggest effing fail of my life was listening to some zacks or morning star garbage about how a company that mailed DVDs was overvalued at $40.



Not even a decade later my small investment would be worth $600,000 had I kept that money in NFLX.



Bottom line is—do your own due diligence and look at the future, study a company, and know the financials behind what they’re doing. Don’t give a rip what some widget on a website says about a stocks share price.



Trip 7–I have TSLA. I had 68 shares. Then reverse split this summer announced. 5:1. $17,700 is what I paid for that. That investment is now worth a small house.



Same with AAPL. That thought process that you presented isn’t a blanket approach.

Originally Posted by freezingflyboy (Post 2594361)

I do the rental property thing. It's not exciting or glamorous but it is easy (most of the time) and having someone else pay for you to build equity is great. I use a managmemt company which eats into profits some but then all I have to do is cash a check each month.

Originally Posted by Gunfighter (Post 3172706)

With a hypothetical play portfolio of $100,000:

-How many positions would you hold?

-Do you keep them equal in size?

-How far out would you be buying/selling premium?

-How often are you trading in/out of positions?

-How much time are you spending per day/week/month managing the positions?

Originally Posted by Trip7 (Post 3172699)

I hear ya. Story stocks do have a track record of providing life changing returns provided you aren't left holding the bag when the story ends up not being as optimistic as the price. Also, IMO it's alittle bit of a dangerous precedent to compare TSLA and Amazon. Even in its early days Amazon had a track record of positive cashflow from Operations. Will be interesting to see how the next decade shapes up

Sent from my SM-N986U using Tapatalk

Originally Posted by JamesBond (Post 3172690)

Oh no please don't bring that in here.... Start another thread. Ever see Good Will Hunting? Why pay a lot of money for something you can learn for free at the public library?

Originally Posted by LandGreen2 (Post 3172805)

one of my fav movies! Ok where do the rookies start with covered call education? Is there an outline, book, reputable YouTube out there to start the education ? Thx


Note: NM I found replies earlier Talking about tastytrades. Illl check that out

Originally Posted by marcal (Post 3172827)

For all you trader millionaires why are you on APC? You should all go to elitetrader.com, the APC of trading not investing.

I love bogleheads.org for investing.

Any other good investing forums out there?

Originally Posted by GogglesPisano (Post 3172583)

My measly contribution: I subscribed to Barron's a few weeks ago.

I started my own "mutual fund" via a Brokerage link and transferred in some play money.

So far I have not even come close to the S&P, but it's only been 3 weeks.

I intend to sit on my hands and read more Baron's and free advice here.

Originally Posted by Big E 757 (Post 3172848)

Its been mentioned before,, but look into Motley Fool for brokeragelink investing. The picks they’ve recommended have been stellar. I have been fully invested for the past few months and haven’t acted on any recent recommendations but the subscription is very inexpensive, compared to the returns I’ve seen over the past 18 months.

Originally Posted by LandGreen2 (Post 3172805)

Ok where do the rookies start with covered call education? Is there an outline, book, reputable YouTube out there to start the education ? Thx


Note: NM I found replies earlier Talking about tastytrades. Illl check that out

Originally Posted by buckleyboy (Post 3172873)

Yeah, you said nevermind, and I have read zero of this book (yet), but Understanding Options by Michael Sincere has been recommended to me.

I feel like an utter idiot reading this thread. Thanks for the education folks! I, too, am trying to up my game.

Originally Posted by Gunfighter (Post 3172838)

Yes, check out Bigger Pockets.

Originally Posted by Big E 757 (Post 3172848)

Its been mentioned before,, but look into Motley Fool for brokeragelink investing. The picks they’ve recommended have been stellar. I have been fully invested for the past few months and haven’t acted on any recent recommendations but the subscription is very inexpensive, compared to the returns I’ve seen over the past 18 months.

Originally Posted by mispoken (Post 3172886)

I read and read and read. I watched YouTube videos, signed up for “educational seminars” (hint they’re sales pitches) and I just couldn’t get it. So I just started watching tastytrade and following their trades; particularly their “Johnny trades” (small accounts and small trades). It’s the only way I learned this stuff. The rest is history. You may be the type that can read and understand, but it didn’t work for me. I tried for years to get myself up to speed with books. Sometimes you got to just do it. Liz and Jenny also do very small and manageable trades daily. Their segment is a little fast talking but they do good beginner type trades usually.

Originally Posted by LandGreen2 (Post 3172892)

Is there more than 1 subscription available at MF? Or is it the Discovery Everlasting Stocks you recommend?

Originally Posted by mispoken (Post 3172901)

I would not recommend any of the higher priced subscriptions. Stock Advisor and Rule Breakers are all you need. They’re very affordable, sometimes intro offers for $99 for the year.

Originally Posted by Seneca Pilot (Post 3172815)

Tasty Trade is good.

Covered calls are really simple. Option contracts are 100 shares. You can do weekly expirations and monthly expirations. You pick a stock you like, buy 100 shares and then you can sell calls against your shares.

Example:

Stock XYZ you buy for 100$ and sell 120 calls against it. Calls sell for .40cents and expire in 8 days. You collect 40 dollars and if the stock is below 120 on expiration you keep the 40 and the stock and then rinse and repeat. If the stock closes above 120 then the option buyer has the right to call the stock away and pays you 120 per share. You made 20 per share and keep the collected premium. You could lose money on the stock but you can't lose money on the option. The option premium acts as a small hedge as you can lose on the stock as long as it is less than the premium. The premium has the effect of lowering your cost basis.

This is a Buffet play, he sells a lot of calls against his positions. I have sold calls against my positions in my self directed IRA for decades and it juices the returns without increasing risk or using up capital.


Edit: Almost forgot. This is not trade advice or a solicitation. Seek advice from a qualified investment advisor. Past performance is not a guarantee of future gains. There is risk in trading levered products and only trade with risk capital. ETC. ETC. ETC.

Originally Posted by Finessed (Post 3172912)

I’ve never been a fan of option trading because it’s essentially like going to the casino. I appreciate your advice and agree “covered calls” would be the way to play options trading. Essentially you’re the house, and we both know the house wins (not always though).

This is the problem I have with your post. Selling a call option would result in the individual selling to write up the contract, correct?

You think a pilot like me is going to figure out how to write up a contract the likes of Warren Buffett’s math gurus write up their contracts??

a link below is the The Black-Scholes Formula used to write up option contracts

https://www.investopedia.com/article...eat_market.asp



​

Originally Posted by Seneca Pilot (Post 3172914)

The contract is not written and the math is done for you. Get a demo account for Think or Swim. Watch some Tasty Trade videos on You Tube and play around with it. You don't have to risk a cent to see if it is for you. Covered calls have zero risk of loss on the option, you only collect premium which helps to offset some risk on the stock. I use covered calls in my retirement account precisely because I am not willing to take big risks with those funds. It is a very safe way to improve your returns.

Originally Posted by mispoken (Post 3172587)

As a personal preference, I don’t use accountants to guide my investing.

As for burning through cash; if that’s a concern at this phase in their growth, consider they expect to be FCF positive for all of 2020. Think about how quickly they came from their nearly fatal balance sheet to where they are now. They’re just getting started.

As for the reason for the cash burn; look at where that cash is going....the development of the S, X, 3, Y and Cybertruck? Battery development? Built out of
factories (both for autos and batteries)? Build out of supercharger network? Build out of mobile
support fleet? Self driving software? Software beyond self driving? Build out of salesforce?

They’re investing, it’s not as if Elon is just taking this cash and buying pot :-)

We are in a new era of companies; I’m not sure if I’ve said it yet (haha) but traditional metrics used by academia and talking heads are utterly useless.

Look at the gross margins of these SaaS companies. Who's had those types of margins
in the past? Nobody.

Look at how easy it is to scale now - compared to the past. Takes very little capital and very few boots on the ground. Was it like that in the past where everything was physical?

Look at subscriptions? That revenue and whatever you retain largely goes right to the bottom line. And it is repeatable.

With Tesla, what is the #1 car company, the #1 power company and tons of subscription possibilities (self driving taxi fleet, software updates, etc....) worth? Much more than looking at historical data ratios. It will take a lot to get there, but I can see that path.

What is Fiat-Chrysler spending their FCF on? Advertising? Auto manufactures as they exist are dead.

Keep the thoughts rolling! Lots of good things to reflect on in this thread. Ultimately we all want the same thing: $$$$$$$$ :-)

Originally Posted by Gunfighter (Post 3172927)

Doctors have White Coat Investor and lawyers have Big Law Investor. Can I get any volunteers for building out a similar site for pilots?

Originally Posted by Trip7 (Post 3172867)

What has your return percentage been over the last 18 months?

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Originally Posted by mispoken (Post 3172693)

I thoroughly disagree with you here, saying that spreads are a waste of time and money. Assuming you understand them and know how to manage them they’re far more capital efficient than your typical covered call. If I can buy a cheap wing for say, .25 and preserve $2-$3k in buying power, this allows me to do a lot more with my buying power versus devoting all to a few trades. The key is trading small and trading often to tip the probabilities in your favor.

however, I prefer naked puts to maximize my premium and for management purposes. It’s much easier to keep rolling a naked put and collecting premium as you go versus a spread. The more spreads, the more difficult to manage.