If if if.... Yeah, if BABA hits $400. It could also hit $150. That does not change the fact that you are starting $6100 down, and tying it up for 18 months. The only good there is that that is your maximum loss. But again that is a $6100 hole that you must first dig out of before you make penny 1 in profit. Out of curiosity, how long do you think it will take for the option to recover that? I guess perhaps I prefer to be more liquid in this environment. When money starts to get expensive again,(2022 or 2023?) I think the bull run will become at best more of a bull walk. Different discussion however for another thread perhaps.

And I have to say that using GME as ANY kind of litmus test... well.... lulz.... If that is the windmill you are tilting at I wish you all the luck in the world. But I will reiterate that you are in love with a company... a Chinese company at that, and imho, that is not a wise idea no matter what your interpretation of their fundamentals is. I would wager that the next Republican president is going to see that Mr Trump was right in his economic attack on them and start it back up again. Remember, they need us, we don't need them.

So let me ax you this then... being that you are confident that BABA is going up, why don't you sell some puts against that call to recoup some of your premium? The Jan 23 $180 puts go for about $21... so the money you are ponying up is only $40. In every post that you have mentioned BABA, you have exuded extreme confidence that it is going up. No doubt. So why pay more for something that is going up anyway? For that matter, sell the $255 OTM puts and your cost is (essentially) zero. You might even collect some premium. Now you have ponied up nothing and when the stock goes up, your call becomes more valuable and the put declines to zero and you win bigly. I get the impression that you would not want to do that because your confidence in the stock really isn't what you say it is. If it is, this kind of trade is a no brainer.

Like I alluded to earlier, this kind of spread/condor/whatever stuff is too Mickey Mouse for me and I prefer to just go for the throat and sell the put outright and do something else with the premium collected.

Oh, and I would have sold the 9000 Delta pilot puts every week.


Not intended as investment advice, dyodd, ymmv, past performance, yada yada yada

Last time TSLA was 40x trailing EBITDA was 2019. Its currently trading at 127 times EV/EBITDA.

Time, technology and founder is not an investment strategy. It's Hope and Dreams. It's sounds like you are willing to pay any price without regard to the return on your capital. I own a Tesla. It's a nice car. Would I pay 400k for a car that worth 100k brand new? Absolutely not.

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Yes it could theoretically hit $150. But by buying at a large discount to Intrinsic Value(30%+) initially you protect your downside. I call it my margin of safety. Moreover, buying at least 20% ITM, the stock does not have to move much to breakeven. My $6100 premium leverages me to control $21,200 worth of options. The stock only needs to move 8-9% to breakeven at a $170 strike price. If I'm buying an option on a stock that 30%+ undervalued, growing earning at 30%+ a year and have a 1 yr+ time Horizon on the expiration date I say that's sheer outrageous value with a large margin of interest.

Buy writing Puts I'm taking equity downside risk and not getting paid nearly enough to do it.

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Sounds like Trip is just using a stock replacement strategy. Less outlay, more leverage, they can be rolled forward, and no chance of margin calls. Not sure why he’s taking so much heat.

Happy Fathers Day!

I wouldn't call it 'heat'. I'd rather call it a discussion. I am not so sure I really agree with the 'leverage' aspect of it. He has monies tied up for 18 months. Might as well be long the stock without the hole to dig out of. I dunno. I hope it works for him. I couldn't see doing that without getting some offset via sold puts, and if I were doing that with the 'confidence' he has in the underlying, why bother with the calls?

I’ll go check my spreadsheet when I get to my computer. It may have been based on forward projections.

I’ll break this down for you;

Time-the greatest asset in investing. Time smooths all things out. The longer the time frame the greater chance of profiting. The longer the time the less relevant a number divided by another number. The longer the time frame the larger the compounding effect. For those with an ultra long investing mindset, ratios are irrelevant. For those who see things as black and white, and must try to prove you’re smarter than the market and do some basic arithmetic, you’re going to miss out on a lot.

Technology-The closest EV is about a decade behind. The technology is one of the main advantages that Tesla has. It’s why their sales continue to grow exponentially. It’s why they’re sold out for the next 2 quarters. It’s why they’re one of the safest cars on the road. The technology in the cars continues to get better by magnitudes compared to the competition.

Founder-Investing in a founder led company with a huge amount of skin in the game is an important part of an investing thesis. I’d take that any day over an arithmetic problem.

Then there’s you. You divided historical numbers by another historical number and decide if the result meets your criteria based on some conventional wisdom derived in academia.

It’s two different ways of investing although, I think your way is not long term oriented at all and therefore not investing. My way is why I’ve produced 30% annualized for a decade. I ignore all arithmetic when investing. It’s irrelevant.

im actually pretty tired of the back and fourth on this. We just have two different ways of doing this. My methods have proven to me, my way works. Maybe yours does too, we are just waiting on the data. I’d like to continue the investing discussion going forward. If people choose the use the ratios to guide them, good on em. If not, I’m happy to discuss my methods going forward.

I know a few Walmart shoppers (maybe all of them?) who would disagree. China is a problem because there’s no easy fix.

Trump had the right idea. But people want their cheap Chinese ****.

This thread makes me very happy to be dollar cost averaging into index funds. I’ll report back in 25 years.

Ask the US farmer about that idea. They were the sacrificial lambs.

yeah, as one of the drivers of this clown car, i agree that it’s exhausting.

Going back to the basics, I do the same thing, except in a more focused manner. I have a core group of 20 or so stocks in my PF and I only invest in one to two of those per year. All my retirement money goes to them. Very rarely do I add a new company. This is a “water the flowers and let the weeds die”’approach. If I could setup brokerage link to auto invest in one or two stocks per year, I would. I rarely dig into financials anymore except for a brief overview quarterly to make sure there hasn’t been a fundamental shift, like going from making microchips to mousetraps, or any kind of fraud allegations. It’s one of many ways, but it works for me.

30% annualized over a decade? Very impressive. You must be sitting on several millions in investible assets. Hope it isn't all in TSLA!

Time, technology and founder all applies to the greatest company the modern world has ever seen, Apple. Apple was a significantly better business then Tesla from its infancy to today, yet Apple never traded at the eye watering valuations Tesla trades at today.

The EV obsession has become a cult. If a small company mentions clean energy or EVs the stock skyrockets. Anything Musk endorses on Twitter skyrockets. The intrinsic value of a stock is its future cashflows discounted to the present value, not hopes, dreams, and tweets. Mark my words, at today's price, TSLA stock holders will have negative returns over the next 10 years.

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One thing I've found is I can't have too many different strategies. Find something that works and fine tune it along the way. I found a podcast last year I've really enjoyed called Risk Parity Radio. Not sure I'm all in but definitely food for thought for me. He's geared more toward continuing growth but limiting volatility and drawdowns.

I really appreciate all the good info from you, James, Gunfighter, Trip, and everyone else. It's a cool window to a lot of the good stuff that's out there. Cheers.

Try some income producing real estate. It can be done hands off via syndications or hands on via direct ownership. A nice in between option is NNN commercial buildings and/or hiring a property manager. Each approach has its pros and cons.

​​​​​​Over the last 14 years, real estate has crushed my index funds. In 2007 it was 80/20 in favor of funds. Now it's 80/20 the other way. To be fair, most of the real estate was actively managed, so the gains include sweat equity. Balancing that out is the DC contribution into index funds. The RE was only funded out of pocket for the first 5 years, the last nine have been only reinvestment. The index funds have been 415 maxed every year.

I'm replying to a post in the 320/73N vs 7ER QOL thread over here to minimize thread drift.

Becoming a syndicator was high on my list of alternate careers during the VEOP period. The 36 month offramp from Delta would have made for a financially smooth transition. Ultimately it came down to lifestyle over $$$. Being a good syndicator is a full time job, which didn't sound as interesting as being a part-time pilot.

My Side Hustle as WB B on reserve is working out well so far. I'm moving from actively managing self storage into becoming a passive investor in apartments. It has even provided flexibility to play land developer on a JV with an apartment developer. Once I'm done with the entitlements, I'll enjoy the ride as an LP/KP in the deal.

I'm curious enough about the offerings on Equity Multiple that I signed up on the platform. My biggest question for this year is how aggressive the individual syndicators are with cost segregation and bonus depreciation. My assumption is that the equity deals provide K-1s and I'm wondering how much in passive losses they generate the first year.

How's managing Self Storage been for you? I imagine it's a bit easier than rentals. As far as the Equity Multiple Depreciation that will vary per deal. Equity Multiple does their own due diligence that presents what they think are good opportunities then you do your own due dillegence. There's an Equity Mulitple representative that can assist you as well with any questions. Overall I sign up and several sites like Equity Multiple, Realty Mogul, Crowdstreet and use them as a filter system to source potential deals. After that I read the materials documenting the deal structure then do a quick search on the Syndicator for reviews/track record.

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Real estate is my next step. I’d like to hear your strategy of cash vs debt and single family vs multi amongst other things. Being in FL now isn’t the time but when it is time, I want to be ready to jump.

There are pros and cons compared to residential rentals. You have 10x the number of tenants for the same $ in rent. We have managers that staff the offices daily and my wife acts as the regional manager. Its a team effort.

Thanks for the input on the crowdsourcing. I'll use my next SC as an opportunity to be productive and check them out. Have you been invested in any syndications long enough to get a K-1 or is this the first year? The 2020 tax year was my first experience with a K-1 from an apartment syndication and the passive losses from cost segregation and bonus depreciation were eye watering. It was MUCH higher than I've seen on self storage.

I received a K1 but no passive losses recorded since construction phase was still in place. The property just opened for business Jun 29th. Managed by Public Storage

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any recommendations on how someone gets smart on syndications? Can you point me in the right direction to do some research. Thanks!

Realty Mogul has a nice guide on Due Dilligence and Paul Moore's book the Perfect Investment I found to be very informative and gives a general overview of the industry


https://www.realtymogul.com/knowledg...state-sponsors

https://www.amazon.com/dp/B01M0UDZ4D...2QV8JR4TR3XS38

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Short Answer...
Buy multifamily with debt or invest with a syndicator who does. In the beginning, focus on cash flowing property not speculative developments or appreciation gambles. Cash flow is your lifeline, appreciation is a bonus. Read books, listen to podcasts and network with other investors.

Long Winded Addons...
It's no secret my favorite monetary investment is cash flowing real estate with smart use of leverage. I've gone anywhere from 5% down up to all cash. The all cash acquisitions get rehabbed then leveraged. All of my income producing real estate has debt. When there is an opportunity to refinance at better terms or get cash out for another investment, do it. "Don't wait to buy real estate, buy real estate and wait." -Jason Hartman. Just a couple years of inflation on rents will boost your cash flow. It also destroys the real value of the debt. While you are paying 3-4% interest on the debt, inflation is reducing the real value, so the money is "free".

The other, more valuable resource you are investing is your time. Spend it getting a good education from reading, listening to podcasts and networking with other real estate investors. The easy button here is dropping $200 on a Lifestyles Unlimited basic membership and doing the online education. The two day seminar includes a soft sell on the upgraded memberships. Some of my favorite podcasts are Jason Hartman, Del Walmsley, Bigger Pockets and Old Capital. The Rich Dad series has several excellent books to read if you haven't already, read Rich Dad Poor Dad, then Cashflow Quadrant.

*Disclaimer, I sprung for the upgraded Lifestyles Unlimited membership because of access to successful syndicators who follow a strict code of conduct. Much like joining a country club, the membership fee is to keep people out, not get them in.

I'd recommend looking for local REIAs and networking. I've found several in Texas with a WIDE range of members. I've run across some that are run by a local guru who will teach you how to use his law firm to owner finance absolute 5hit h01es. Others proclaim to teach you all 1000 ways to make money in real estate so you can profit in any market. Another was filled with skilled professionals including a high percentage of millionaires. Quest IRA has virtual networking events for people who are looking to invest with self directed IRA funds also. Also consider joining the local or state chapter of the National Apartment Association. It is a great educational resource even for single family investors.

As a very basic general guideline if you are starting with <100K, a great option is single family rentals. You can get into a single family rental for as little as 20k out of pocket in several markets. A common theme among the podcasters I've mentioned is "live where you want, invest where it makes sense". There are several turn key providers of single family homes including Jason Hartman or Mid Coast Properties among many others. I know of several investors in single family homes who have never seen the houses they own or only visited them once or twice during purchase and rehab. Do a credit check and criminal background check on everyone over 18 in the property. You MUST verify income for the person(s) paying the rent. I repeat, screen your tenants! Poor tenant screening was a precursor to almost every landlord horror story ever told.

If the goal is building equity, starting with a house in need or repair is a great option. The transaction costs are higher, but so is the ROI. Buy a distressed property with a hard money loan that may even include funds for rehab. Once rehabbed and rented, refi into a 30yr conventional note and let the tenant pay the mortgage. The house should provide $200-$400 monthly cash flow above the PITI costs. If not, pass and look for a different deal. This is typically the route requiring the lowest amount of capital, but you are competing with many other investors and often miss out on deals by hours or in some cases by minutes. Look for the BRRR method on Bigger Pockets or just follow along on Day 1 of the Lifestyles Unlimited program.

When you get to 100K+ or if starting there, you have the choice of becoming a direct investor in a larger property or a passive investor in multiple syndications. Do yourself a favor and get a good financial education on how real estate works. As a direct investor, you can either self manage or hire a management company. At this level of investing you can acquire net leased properties like a medical office, a warehouse or a retail strip center. Check out Loopnet or Crexi to get an idea of what is available, but realize most of the good deals are from brokers you have an existing relationship with. As far as syndications, there are crowdsourced options like Crowdstreet and Equitymultiple as well as non advertised offerings like those in Lifestyles Unlimited or from a syndicator you meet at local networking events. These offerings are made under SEC Reg D 506c and eat up lots of money for fundraising efforts. I prefer SEC Reg D 506b offerings, because they aren't advertised. You have to know the syndicator to get invited in. 506b offerings also offer a way for non-accredited investors to get in.

Thanks very much for the time and info. I’ll be looking into the resources you offered for reading and podcasts.

Any of you real estate moguls doing a self directed ROTH IRA and buying property?

I have gone as far as researching a few custodians, but haven't set up an account for investing. It works well if you are investing passively in syndications, but not as well for independent investments like houses or small apartments. Quest IRA is one custodian worth looking at. The fees seemed reasonable and they cater to real estate investors.

I have no idea what ya'll are talking about with 'syndications'.

I know one guy that has his ROTH completely in real estate. If I could talk my wife into it that is EXACTLY what I would do. He uses Utah bank. It is a 'checkbook' IRA as I understand it. Basically they offer nothing other than paperwork to keep you legal which is perfect. ALso There is NuView IRA which does a similar thing. I'll look at Quest, thanks for that...

it’s a bit of a hassle with SFH, since you can’t do any of the work yourself (legally) and are forced into being very hands-off, but it has its place. I use pacific premier trust and they have been a pretty easy custodian.

Good article explaining syndications
Short excerpt, but the full article is worth a read...

What is a syndication? In simple words, it is a deal between a sponsor and the passive investors. A sponsor on the deal is the person with relevant experience in the field who finds a suitable project for the investor and finalizes the deal. The investor can be an individual or a group. If you are the investor, your only job is to analyze the project and conclude whether to invest or not.

As OOfff said, a self directed IRA is better suited to passive investments. Investing in a single family house with a checkbook IRA is flirting with an IRS disaster.

What kind of disaster do you foresee one would be flirting with?

Taxes and prohibited transactions are the potential landmines.

If you can explain UBIT and IRC 4975, you are probably safe. If either of these are unfamiliar, learn them both well enough to teach them before setting up a SDIRA.

Look at 30A real-estate in FL. Huge rental market with free cash flow even with only 6 month weekly rental. Hang out at the beach the other 6 months. Last year was 40% appreciation and due to how small the area is I don't see that slowing down much. Very safe and desirable getaway for families..

I pay an accountant a lot of money to figure that stuff out. I'm not really worried about it though. I don't think buying a rental house with a ROTH and plowing all the income back into said ROTH is an issue in either of those cases. As far as trying to write off a new truck or something equally as stupid in the process... well... duuuuh. The disasters I think one could find oneself in would be the result of putting the gun to one's own foot and pulling the trigger. On cursory looks... and I have not done the deep dive on it but as long as everything stays within the SDIRA, I don't see taxation as an issue with the possible exception of being without a renter and having to 'loan' the IRA some money to cover any mortgage that you might have.

You have created UBIT, which generates income tax. It's not a show stopper, but leveraged real estate in a Roth IRA isn't all tax free. Your loan to cover the rent shortfall just earned you the callsign "Fourtoes"

Get a good understanding of UBIT and IRC 4975. Google it, then talk to your tax person.
​​​​​​

I am doing real estate syndications within one, using forge trust

just spent a week down there in a rental house. Would love to do it but the acquisition cost is just so high.

Not sure any one of us is a "mogul" but part of my portfolio is in a Self Directed IRA. Like others, there is a CPA and an administrator between me and the assets.

I've always been overly careful with the IRS. Even if you "win" defending yourself is going to take a lot of time that pilots do not have.

Thanks for the discussion guys... really. But ya'll are speaking Chinese. Keep it going, but I'll bow out and lurk on this one.

As much as I like to espouse the benefits of real estate, there can be downsides, especially with syndications. In one particular investment, the group of investors is in the process of removing and replacing the manager. I am working alongside the other investors to get this done as quickly as possible. Being a passive investor in a property isn't always passive. Sometimes you have to take action to protect your investment. The most important thing I will point out about this particular scenario is that all of the investors in this property are educated on the terms of the agreement and we knew going into the deal there was a provision to remove the manager with a majority vote. Check your syndication documents carefully before signing, some offerings make it very difficult to remove the manager. More to come as we continue the remove/replace process...

What did the manager do that warranted removal?

-Allocation of offsite management expenses to the property. This expense was already covered in a separate management fee paid as a percentage of revenues.
-Showed property expenses for repairs that had not yet been completed.
-Manipulated move out dates to artificially inflate physical occupancy. This did not impact economic occupancy or actual revenue, just physical occupancy calculations.

There may be more uncovered in the coming days as the investors take a closer look at the books and conduct physical inspection of the property.

A key point to be made is that the investors had the ability within the company agreement to remove a non-performing manager. Some syndications are more investor friendly others are more syndicator friendly. You must know the language and DYODD on the agreements.