You chose a time as uncertain as it is right now to publish one of the best economic/market video i’ve ever heard, im half way into it and enjoying every single second. You truly, are the goat.
@@gertrudes666 we're so up this morning lol. hope there's a pullback before next meeting so I can load up again. my only regret atm is that I didn't buy more lol
Could you make an applied video for managing margin? I’ve been through all your options videos and have been selling puts and doing some spreads but still struggling to understand all the different numbers IBKR gives you and when you’re getting in dangerous territory
I am a 29-year-old CFA charterholder working in institutional portfolio management. Over the past three years, I have given several guest lectures at the university from which I graduated. I was surprised that so much stuff I’ve show to students was completely new to them and really ignited their curiosity. I am passionate about teaching university students the fundamentals of retail portfolio management, as my own university experience lacked practical applications of the theoretical concepts learned in class. Given my interest in teaching rather than pursuing academic research, what are the probabilities and potential pathways for me to become a professor at a university?
Congratulation Mark on your short on IWM, TSLA and ES. I remember you clearly mentioned that you short IWN at 224ish. I wrote it down last week. Great call
Last week I brought up the risk of rising inventory to US homebuilders and you made some good counter points. Taking your points a little further, one of the biggest tailwinds for home builders (and REITS in Canada) is the structural supply deficit in both countries. Despite this recent run up in inventory, I find it very difficult to believe that builders are going to ramp up spec building enough to fill this gap. So when sales are weak, starts fall, meaning very little progress will be made in filling all the demand from "suppressed households" (i.e. households that would like to form, but cannot afford to), therefore the supply deficit persists, putting a floor under prices and supporting builders and REITs. Unlike the auto industry, which in your sector video you talk about how OEM's high fixed costs force them into a structural over capacity, those conditions do not exist to the same degree in the home building industry. Meaning its tough to see how the supply deficit could be solved by over building. Do you think that is a valid point in favour of your longs in the US homebuilders and CAD REITS?
2 questions please: 1. Did you decide not to cover Clarkson? If so, any specific reason? 2. What are the drivers of the difference between Henry Hub and TTF prices?
I am considering getting a PhD in economics and wanted to get your thoughts on a couple things: 1.) What is the best way to improve my chances of getting into a highly respected university like an Ivy League university or a Stanford or MIT? 2.) Do you think it would be beneficial to go back to school to take some math classes or other classes that might improve my prospects for getting into a good program? 3.) You mentioned in prior videos that you hated doing research because you felt it was a waste of time. Why is that? Is it difficult to do research a topic in economics that has not already be researched by other academics? And of course, any other insight or advice you can provide is always appreciated. Thanks for all you do
it would be great to get your full current watchlist at the beginning of the positioning videos in the applied level - by doing so we can monitor the companies during the week ourself and see if we spot the opportunity the same way as you do. This would be a great learning setup since your positioning session would be like a weekly debrief of "great trading execution" and we train ourself to see and size the opportunities the way you do it.
Good day Dr. Meldrum, in couple of your last videos you mentioned that the rotation to small cap stocks was premature. Considering FED int. rate cut impact working with a lag of 6-12 months as well as Markets being forward looking... Is it possible to correctly or atleast in time... time the market.. ? Could you please share your own past experience and what lessons did you learn?
Great content. You are the best. 3 Question: 1) For an average retail investor that is trying to build a 60/40 portfolio, do you still consider TLT or US bonds interesting, even with the recent changes in rates? 2) Do you think the 10 year bond is valid for the 60/40 strategy? 3) In a low rate environment, how would you recommend building the fixed income part of the 60/40 portfolio? Thank you
Hey Mark, three questions: 1) Would it make sense to go long the USD/JPY pair now seeing as the BOJ said on the 7th of August that they would hold off rasing rates to avoid further turmoil? 2) Any thoughts on simply buying puts on mstr/tsla? With any further market weakness it seems as these would pay off. 3) How do you personally determine your performance on IBKR when it comes to options? Seeing as you were only 25% invested in your personal account, I struggle to understand how you have determined that you outperform the S+P in most years. Do you look at TWR on your account and look at annualized returns, or do you use some other sort of return attribution technique? (I personally use MWR but that's because I make lumpy contributions from time to time). Thanks
Hello Dr. Mark, 1. How do you manage the accounting of the portfolio you run on IBKR? It seems like a tedious process. 2. What was your worst year since you started trading? 3. You said in an interview I saw on YT that you have 8 degrees (maybe you were being sarcastic). I am curious as to what they are. Thank You.
For those talking about a FED mistake, they have a BIG margin to cut. Instead of the 25bps per meeting that is forecasted, they can do a 50bps or a 75bps cut in drastic scenario. Knowing they have this capability, made the FED err on the side of higher for longer than needed, because they can always cut faster, but they cant raise rates after cutting begins (it just looks a lot worse). Any thoughts on this statement?
Dr Mark, are you concerned about the level of US debt? The debt to GDP ratio and the total amount of debt is higher than it has ever been. The question is if the debt is being used to fund economic growth or not. As per my understanding a lot of it is just used to fund wars etc. I'm worried that this could cause a major correction in the US stock market. I'm also worried about the strength of the US dollar. Japan's debt level is astronomical and I'm worried that the US is on a similar path. Is this sustainable? As an investor in US stocks, should I be worried?
Hi Mark! Looking at your GM December strip, specifically the 36 strike puts: Why did you sell them now with a low premium instead of using a triggering order like 'if stock price reaches 38, then sell the 36 put at X premium,' where X would be significantly higher than the current premium at 38? (As you thought at that moment the market would keep going down.) How do you define that X premium to sell the put?
Hi Mark thanks for the video! Could you go over how you calculated return on invested capital for the strips that you sold? Do you switch between doing strips vs stacks based on conviction of the stock or do you do it mainly because it is not that much of a difference in the return on invested capital and strips provide more protection?
How do you find the expected TLT price given I expect the 30yr to drop by 50bps by EOY. Do you use the current TLT price or is there a large amount of that already priced in?
I sold GM December 40 puts, but I'm concerned that if GM buys back shares before December, I might miss out on potential stock price gains since I don't yet own the stock. Would it be better to sell ATM or even ITM September puts if I really want to own GM shares?
What is meant by positive and negative dealer gamma? I was watching the Charles Schwab YT channel and they were saying that 5300 level on the SPX has negative gamma when talking about option flows and gamma levels. I understand gamma but not so much in this context from a dealers perspective.
As of the market close on Monday, August 5th, the VIX reached its highest level since 2019. Given this elevated volatility and my belief that it is going to decrease, is it a good setup to execute a short volatility strategy, such as a short straddle or a risk reversal, on SPY?
Do large equity moves, up and down, both add to the measure of volatility equally? Or does the downside have more weight? All I ever hear is about volatility being related to the downside move. Thanks
In Ireland, there is a 41% capital gains tax on ETFs. This compares to 33% on all other assets. To make matters worse for investing in ETFs, there is an 8 year deemed disposal rule on ETFs, meaning you have to pay tax on gains after 8 years even if you haven't sold the ETF. I'd be curious to get your thoughts on how this would influence your investing style if you were a retail investor in Ireland. Thank you.
Hi Mark, fantastic outlook as usual. I am trying to formulate my current economic summary and I'm landing very far from the current market sentiment of mass panic. Positives: GDP is growing, jobs are being added, we have close to target unemployment, and inflation is under control. Negatives: Overvalued market is correcting, policy lag could leave prices lower than desired. What am I missing here? What are the top fundamental economic concerns in the US economy and how concerning are they?
It seems like the market is already recovering from the previous sell off that brought it from extremely overvalued to overvalued. Do you think there's a good chance we head back up there? ISM services showed expansion which seems to have calmed people down. I've talked to other people (non investors) and it seems like GM isn't liked as a car and a company. People would rather buy Ford stock than GM without knowing too much about it. I wonder if this perception of GM is part of the reason why the stock isn't so high
Hi Mark, this might be a dumb question but could you explain cost of equity in the context of WACC calculation in an intuitive way? Cost of debt I understand, it's intuitive. You borrow money and there is a cost to that. You pay interest and you can see that in the financial statements. But cost of equity is not intuitive to me. Yes, I get it, if a company raises cash by issuing shares investors need a hurdle rate, but most mega cap companies do share buybacks instead. If I buy their share, I'm buying it from another investor, it doesn't impact the company's cash balance or operations. Should the weight for cost of equity be zero in this case? (I'm trying to calculate the WACC for APPLE)
A couple questions on the Applied Series: Would you consider making a video for your Applied Series where you discuss the most commonly utilized economic indicators and go into detail about why they're significant and maybe how they're calculated? Also, do you have a video on risk management for options? If not, would you consider making a video that discusses the basics of risk management such as how to do a risk reversal?
what is your best recommendations for losing positions that I no longer have high conviction on? I have some positions that I am down massively on .. around 70-80%, examples Nio, Corsair gaming, Algonquin power utilities ? should I start selling calls? or should I simply continue holding them hoping they will go up again? I made a mistake and lost a lot of money on them. I started trimming my other losing positions but with the above ones constituting about 30% of my portfolio with a current value of about 30k, I do not know what would be a good way to go about them.by the way, you mentioned AT&T quite often, wondering your thoughts on bell Canada and Telus on the Canadian side.
Dr Mark : Question on Currency. Some facts: I stay in USA and Hold assets India which at some point in future would like to sell and convert balance in USD. Current conversion USD.INR rate is 84, Central Bank Rate in India 6.5%. Indian election was done earlier this year. Any trade suggestion using IBKR?
Third question: with a day like today (Monday) I can just picture Mark going on a massive shopping spree. I made a few moves today, but have to admit that uncertainty has paralyzed me from taking full advantage of the massive IV spike. Psychologically, how do you deal with a day like this where it is a bloodbath globally (except TLT it seems)?
Q: If underlying price is 100, and 1y IR is 5%, then 1y ATM option price is at 105, right? So currently this option is OTM? because current spot 100 is below 1y ATM price of 105.
Hi Mark, you mentioned you long peso, do you do it directly using currency like sell USD or sell yen and buy peso? Also what do you do with your peso cash because IBKR pays BM - 4% on peso so you are losing 4% if you hold peso cash.
Can you sell covered calls on synthetic longs? What happens if you get assigned? Does the synthetic close normally? IBKR is letting me sell naked calls but only when I have a synthetic long on the underlying
Regarding your portfolio versus de managed account: what is your horizon to evaluate the underperformance compared to your portfolio? What would make you to change the bank provider?
In case of OPEC+ struggling to maintain oil prices at $75 amid rising non-OPEC production and a potential market oversupply, are you concerned about your bullish stance on OXY if oil prices drop further into 2025?
Hi Mark, please excuse me for asking a question before watching the video - I just finished up watching the sector studies XLU video and it seems like a promising sector to be invested in during this phase of the business cycle (late expansion / contraction). If I wanted to be overweight XLU (or any sector) would it make sense to simply be long SPY and sell puts on the sector ETFs that I want to overweight? Also- do you have any preferred readings on learning the business cycle? Appreciate all you do- thank you!
@@antoineparadis9959 Why not? Heading into a contractionary period seems like a perfect time to sell vol. on the sectors that outperform in this environment. Even if we were in an early recovery period you could sell vol. or even use risk reversals on the sectors that benefit in those environments (XLY,XLI for example).
@@antoineparadis9959 Why not? It seems like there's always an opportunity to sell vol. on sectors that outperform in whichever stage of the business cycle we find ourselves in. Selling vol. on XLE/XLU going into a contractionary period seems like a no-brainer to me. Then rotate into selling vol. on XLY/XLI as we move back into an early recovery period.
Surprised you didn't mention Intel in this Market Outlook. Just curious what your thoughts are on the company's drop and if you'll start following them for a potential new position
Is AQR's Risk Parity approach where they systematically overweight underperforming assets in hope of a rebound possible for retail investors to implement? What issues can you expect from that? Thanks
Having sold LW 16 Aug , if i wanted to exit lets say price is 59, then to get premium and exit do i need to sell same expiry. I have never done this so needed some guidance
Since we will be having a bull steepener in which thew longer part of the curve will remain the same and the rate cuts will be in the mid and short part.... why do you prefer TLT vs for example IEF? do you see fiscal risk affecting TLT?
Hi Dr. Mark, Do you think the sell-off was overdone on Thursday and Friday? I think it was exacerbated by the fear of a full-blown out war in the Middle-East after Hamas's leader was executed in Iran. Immediately post this news hitting the market, option premiums skyrocketed as well as volatility and increased amt of activity. That is what IMO truly led to a sell-off. I did see the earnings of many companies that beat significantly and gave good guidance. But their stocks dropped close to 8-9% as well.
Hi Mark, I'd like to know where I can find expectations for the economic indicators, I love watching your updates but I'd like to start thinking about them independently.
Using Interactive Brokers, is it possible for a retail investor to short government bonds and essentially borrow at those lower rates? Wouldn't that be a simpler option rather than going to a retail bank and paying higher rates through them?
You have mentioned in the past that the US’s current fiscal spending path will force the Fed to bring rates close to the zero line because the “G” component of GDP growth will primarily be interest payments. Since there is a relatively low multiplier effect in government spending, could it be argued that the drag from G won’t affect GDP growth much due to its low efficacy? Thanks for your time as always Dr. Mark.
you said it would be a crime not to sell the volatiltiy in the index or on stocks. How about selling call spreads on the VIX index ETF ViXY to profit from its deflation? This could be the purest volatility play, right?
Mark the labor force growing by 277k and 420k June and July respectively creates a very interesting observation on the seriousness of the unemployment numbers. However, I could not find where on the BLS reports it showed those numbers. I have even used Chat GPT to help me find them and it keeps saying 177k and 222k increase to the Civilian LF. Can you point to exactly where I can reference your LF numbers or clarify if you are looking not at the civilian LF but some other figure? This will be very helpful as this is a core tenet to your argument and a good one! Thanks!
Hello Can you please show us the math on GM's share buyback and how to come up with a price target from it? I'm guessing it's now your highest convinction based on the $39 share price
very insightful read on Sahm's rule. The analogy to gravity is on point. Would you say trading on sentiment has become more profitable than trading on fundamentals?
Suppose a primary dealer whose main function is to participate in primary auctions in government securities and that primary dealers can access to repo and reverse repo facilities from the central bank. hence, if those facilities were withdrawn by the central bank there may be a liquidity stress for the primary dealer. so how can such an assessment should be carried out please?
Please explain the relationship between USDJPY carry trade, Nikkei 225 dropping 12.4% and Tech/broader marker selloff. How I think it works in my mind: I borrow JPY and buy USD, pay JPY interest and buy e.g. NVDA with the USD. JPY strengthens by ~10%, I need to cover so I sell NVDA and buy back JPY. Where does the Nikkei 225 12.4% drop fit into this? Thank you.
Large Japanese companies are major exporters to the US, so with weaker economic data and a weakening consumer in the US, future Japanese revenues may be lower. Also, if much of those revenues are in the form of the US dollar, and the dollar is weakening relative to the Yen, those revenues (in Yen) will also be lower. Just my educated guess.
Regarding the GM puts, you mentioned selling puts @$11.2 for $41 strike. Have you been rolling it and adding the premiums? Current Dec'24 premiums to sell 41 are like $3. What am I missing?
Hi, Mark! Question about neo classical growth model. Whats the difference between capital accumulation and capital deepening? Why slow growth developed countries above steady state should converge by increasing growth of GDP and Y/K ratio. What force will do that process?
Have you seen VIX near 30 last week? Came down to 23-24 at the end of week. Do you think it will fluctuate above 20 mark for a while (a few weeks) or will come down below 20 this week or next?
Hi Mark, I'd like your further thoughts on 'if there's a lag on the way up, there's a lag on the way down'. From here, it seems like entities can hold on to lower cost debt until it comes due on the way up, but can immediately roll-over debt to lower rates on the way down (providing there's no payment penalty that would counteract the gain of doing so). Also, I made that infotainment comment a few weeks ago - It's more a me problem. I'm watching it for fun but it's not sinking in particularly well, or at least i'm not inspired to pick up the tools myself.
Regarding the insurance for your truck: don’t you have website in Canada that allows you to compare the car insurance prices across different insurance provider? I guess if your switch to another insurance company they will have no history of you so you might get lower prices. We in Netherlands have those websites in abundance.
I understand your argument on the Sahm rule, but my follow-up question to this: wouldn't the rule have captured changes in labor force over time as well? Labor force is not static year over year after all. Then again, maybe we are in a differeny regime post-COVID versus pre-COVID when it comes to labor force (I'd argue that we are in Canada)
27:04 Dr. Mark, during this segment you showed a population growth number as part of the Sahm Rule discussion. Does this population growth number only include the working population?
I see the "All in pricing" applied level bundle is still available on the site. Was the deadline for this extended? I recall it was 31st July when it was going to disappear.
Not sure if I follow your statement that a +100k increase in population, would require a 62.6k increase in jobs to keep unemployment stable. Unemployment rate change stability is dependent on unemployment and labor force increasing at same ratio as existing unemployment rate. Surely what is true is to keep participation rate stable. -100k increase in population need 62.6k increase in labor force and then jobs to increase at (1-unemployment rate)%. Maybe you could walk through the math of your statement again. A final comment is whether your population increase number is isolated to increase in working age population. It could be that the population is growing but with increase focused in non-working age group. I understand this is model driven so likely variability in number is low.
You once said that tech is deflationary. If that’s the case, wouldn’t you want to position yourself in big tech that isn’t overbought? The likes of AMZN, GOOG, and META are raking in insane amounts of cash every quarter. They can choose to deploy it however they want, right now they’re spending it on AI and data centers but they have the ability to pull several other levels and pivot quickly.
Mark. GM is not known as a quality automaker. My first car was a sunbird in 1986. I went Japanese thereafter. Does your investment make sense for a car maker not known for quality?
Regarding your question in the Live Q&A about creating a cult from an anti-cult of "easy solutions" and other BS like “IM Bullshidemy” you’ve mentioned: Don’t you think that through your own work, you’re already attracting those who value discipline, process, and education? Those who are committed to this path are already following it, while those who aren't interested in hard work likely won't change their minds, no matter what you do. Some people simply prefer avoiding hard work and are unlikely to be swayed.
You chose a time as uncertain as it is right now to publish one of the best economic/market video i’ve ever heard, im half way into it and enjoying every single second. You truly, are the goat.
Bought 50 TLT 95 december calls on July 26th. I'm a happy man.
Bought at 95 as well but in ordinary shares. I’m chilling riding this wave up rn lol
Only took him two years to be slightly right lol
@@kt7187 whats your track record?
I'm a VERY VERY happy man
@@gertrudes666 we're so up this morning lol. hope there's a pullback before next meeting so I can load up again. my only regret atm is that I didn't buy more lol
I was waiting for this entire weekend
kto pytał
Could you make an applied video for managing margin? I’ve been through all your options videos and have been selling puts and doing some spreads but still struggling to understand all the different numbers IBKR gives you and when you’re getting in dangerous territory
Berkshire apparently sold 50% of their Apple position and are sitting on almost $300B of cash. To your point, they might make a move on GM?
I am a 29-year-old CFA charterholder working in institutional portfolio management. Over the past three years, I have given several guest lectures at the university from which I graduated. I was surprised that so much stuff I’ve show to students was completely new to them and really ignited their curiosity. I am passionate about teaching university students the fundamentals of retail portfolio management, as my own university experience lacked practical applications of the theoretical concepts learned in class. Given my interest in teaching rather than pursuing academic research, what are the probabilities and potential pathways for me to become a professor at a university?
Brilliant update, Mark. What is the future state of the livestreams? Will these stay on TH-cam and the market updates/accompanying Q&A go to the site?
Congratulation Mark on your short on IWM, TSLA and ES. I remember you clearly mentioned that you short IWN at 224ish. I wrote it down last week. Great call
Last week I brought up the risk of rising inventory to US homebuilders and you made some good counter points. Taking your points a little further, one of the biggest tailwinds for home builders (and REITS in Canada) is the structural supply deficit in both countries. Despite this recent run up in inventory, I find it very difficult to believe that builders are going to ramp up spec building enough to fill this gap. So when sales are weak, starts fall, meaning very little progress will be made in filling all the demand from "suppressed households" (i.e. households that would like to form, but cannot afford to), therefore the supply deficit persists, putting a floor under prices and supporting builders and REITs.
Unlike the auto industry, which in your sector video you talk about how OEM's high fixed costs force them into a structural over capacity, those conditions do not exist to the same degree in the home building industry. Meaning its tough to see how the supply deficit could be solved by over building.
Do you think that is a valid point in favour of your longs in the US homebuilders and CAD REITS?
2 questions please: 1. Did you decide not to cover Clarkson? If so, any specific reason? 2. What are the drivers of the difference between Henry Hub and TTF prices?
I am considering getting a PhD in economics and wanted to get your thoughts on a couple things:
1.) What is the best way to improve my chances of getting into a highly respected university like an Ivy League university or a Stanford or MIT?
2.) Do you think it would be beneficial to go back to school to take some math classes or other classes that might improve my prospects for getting into a good program?
3.) You mentioned in prior videos that you hated doing research because you felt it was a waste of time. Why is that? Is it difficult to do research a topic in economics that has not already be researched by other academics?
And of course, any other insight or advice you can provide is always appreciated.
Thanks for all you do
it would be great to get your full current watchlist at the beginning of the positioning videos in the applied level - by doing so we can monitor the companies during the week ourself and see if we spot the opportunity the same way as you do.
This would be a great learning setup since your positioning session would be like a weekly debrief of "great trading execution" and we train ourself to see and size the opportunities the way you do it.
Good day Dr. Meldrum, in couple of your last videos you mentioned that the rotation to small cap stocks was premature. Considering FED int. rate cut impact working with a lag of 6-12 months as well as Markets being forward looking... Is it possible to correctly or atleast in time... time the market.. ? Could you please share your own past experience and what lessons did you learn?
Great content. You are the best. 3 Question:
1) For an average retail investor that is trying to build a 60/40 portfolio, do you still consider TLT or US bonds interesting, even with the recent changes in rates?
2) Do you think the 10 year bond is valid for the 60/40 strategy?
3) In a low rate environment, how would you recommend building the fixed income part of the 60/40 portfolio?
Thank you
Hey Mark, three questions:
1) Would it make sense to go long the USD/JPY pair now seeing as the BOJ said on the 7th of August that they would hold off rasing rates to avoid further turmoil?
2) Any thoughts on simply buying puts on mstr/tsla? With any further market weakness it seems as these would pay off.
3) How do you personally determine your performance on IBKR when it comes to options? Seeing as you were only 25% invested in your personal account, I struggle to understand how you have determined that you outperform the S+P in most years. Do you look at TWR on your account and look at annualized returns, or do you use some other sort of return attribution technique? (I personally use MWR but that's because I make lumpy contributions from time to time).
Thanks
Hello Dr. Mark,
1. How do you manage the accounting of the portfolio you run on IBKR? It seems like a tedious process.
2. What was your worst year since you started trading?
3. You said in an interview I saw on YT that you have 8 degrees (maybe you were being sarcastic). I am curious as to what they are.
Thank You.
For those talking about a FED mistake, they have a BIG margin to cut. Instead of the 25bps per meeting that is forecasted, they can do a 50bps or a 75bps cut in drastic scenario. Knowing they have this capability, made the FED err on the side of higher for longer than needed, because they can always cut faster, but they cant raise rates after cutting begins (it just looks a lot worse). Any thoughts on this statement?
Dr Mark, are you concerned about the level of US debt? The debt to GDP ratio and the total amount of debt is higher than it has ever been. The question is if the debt is being used to fund economic growth or not. As per my understanding a lot of it is just used to fund wars etc. I'm worried that this could cause a major correction in the US stock market. I'm also worried about the strength of the US dollar. Japan's debt level is astronomical and I'm worried that the US is on a similar path. Is this sustainable? As an investor in US stocks, should I be worried?
Hi Mark!
Looking at your GM December strip, specifically the 36 strike puts: Why did you sell them now with a low premium instead of using a triggering order like 'if stock price reaches 38, then sell the 36 put at X premium,' where X would be significantly higher than the current premium at 38? (As you thought at that moment the market would keep going down.)
How do you define that X premium to sell the put?
Hi Mark thanks for the video! Could you go over how you calculated return on invested capital for the strips that you sold? Do you switch between doing strips vs stacks based on conviction of the stock or do you do it mainly because it is not that much of a difference in the return on invested capital and strips provide more protection?
How do you find the expected TLT price given I expect the 30yr to drop by 50bps by EOY. Do you use the current TLT price or is there a large amount of that already priced in?
I sold GM December 40 puts, but I'm concerned that if GM buys back shares before December, I might miss out on potential stock price gains since I don't yet own the stock. Would it be better to sell ATM or even ITM September puts if I really want to own GM shares?
Hi Mark!
Is it possible that you create a video over understanding of the market outlook for new people.
Thanks
What is meant by positive and negative dealer gamma? I was watching the Charles Schwab YT channel and they were saying that 5300 level on the SPX has negative gamma when talking about option flows and gamma levels. I understand gamma but not so much in this context from a dealers perspective.
As of the market close on Monday, August 5th, the VIX reached its highest level since 2019. Given this elevated volatility and my belief that it is going to decrease, is it a good setup to execute a short volatility strategy, such as a short straddle or a risk reversal, on SPY?
Do large equity moves, up and down, both add to the measure of volatility equally? Or does the downside have more weight? All I ever hear is about volatility being related to the downside move. Thanks
In Ireland, there is a 41% capital gains tax on ETFs. This compares to 33% on all other assets. To make matters worse for investing in ETFs, there is an 8 year deemed disposal rule on ETFs, meaning you have to pay tax on gains after 8 years even if you haven't sold the ETF.
I'd be curious to get your thoughts on how this would influence your investing style if you were a retail investor in Ireland. Thank you.
Hi Mark, fantastic outlook as usual.
I am trying to formulate my current economic summary and I'm landing very far from the current market sentiment of mass panic.
Positives: GDP is growing, jobs are being added, we have close to target unemployment, and inflation is under control.
Negatives: Overvalued market is correcting, policy lag could leave prices lower than desired.
What am I missing here? What are the top fundamental economic concerns in the US economy and how concerning are they?
hi Dr. Mark, Since Ivan has sold shares last week. what do you think about this action？
It seems like the market is already recovering from the previous sell off that brought it from extremely overvalued to overvalued. Do you think there's a good chance we head back up there? ISM services showed expansion which seems to have calmed people down.
I've talked to other people (non investors) and it seems like GM isn't liked as a car and a company. People would rather buy Ford stock than GM without knowing too much about it. I wonder if this perception of GM is part of the reason why the stock isn't so high
Hi Mark, this might be a dumb question but could you explain cost of equity in the context of WACC calculation in an intuitive way? Cost of debt I understand, it's intuitive. You borrow money and there is a cost to that. You pay interest and you can see that in the financial statements. But cost of equity is not intuitive to me. Yes, I get it, if a company raises cash by issuing shares investors need a hurdle rate, but most mega cap companies do share buybacks instead. If I buy their share, I'm buying it from another investor, it doesn't impact the company's cash balance or operations. Should the weight for cost of equity be zero in this case? (I'm trying to calculate the WACC for APPLE)
A couple questions on the Applied Series:
Would you consider making a video for your Applied Series where you discuss the most commonly utilized economic indicators and go into detail about why they're significant and maybe how they're calculated?
Also, do you have a video on risk management for options? If not, would you consider making a video that discusses the basics of risk management such as how to do a risk reversal?
what is your best recommendations for losing positions that I no longer have high conviction on? I have some positions that I am down massively on .. around 70-80%, examples Nio, Corsair gaming, Algonquin power utilities ? should I start selling calls? or should I simply continue holding them hoping they will go up again? I made a mistake and lost a lot of money on them. I started trimming my other losing positions but with the above ones constituting about 30% of my portfolio with a current value of about 30k, I do not know what would be a good way to go about them.by the way, you mentioned AT&T quite often, wondering your thoughts on bell Canada and Telus on the Canadian side.
Dr Mark : Question on Currency. Some facts: I stay in USA and Hold assets India which at some point in future would like to sell and convert balance in USD. Current conversion USD.INR rate is 84, Central Bank Rate in India 6.5%. Indian election was done earlier this year. Any trade suggestion using IBKR?
Hi Mark,
Could you please explain how dividends are priced into options? I sold a few ABR puts but did not see any dividends get paid.
Dr Meldrum, could you elaborate on the BWA 73%, 77% and 84% volatility, what are you looking at and how are you interpreting these figures?
Third question: with a day like today (Monday) I can just picture Mark going on a massive shopping spree. I made a few moves today, but have to admit that uncertainty has paralyzed me from taking full advantage of the massive IV spike. Psychologically, how do you deal with a day like this where it is a bloodbath globally (except TLT it seems)?
Q: If underlying price is 100, and 1y IR is 5%, then 1y ATM option price is at 105, right? So currently this option is OTM? because current spot 100 is below 1y ATM price of 105.
Hi Dr Mark,
What does it mean when Soma reduces by less than what the balance sheet runs off, what are its implications?
You are gift Mr Meldrom. Does your website allow access to all this data as it comes out?
Hi Mark, you mentioned you long peso, do you do it directly using currency like sell USD or sell yen and buy peso? Also what do you do with your peso cash because IBKR pays BM - 4% on peso so you are losing 4% if you hold peso cash.
Can you sell covered calls on synthetic longs? What happens if you get assigned? Does the synthetic close normally? IBKR is letting me sell naked calls but only when I have a synthetic long on the underlying
You did a lot of shopping last week! What percent of your portfolio do you typically have in cash equivalents?
Regarding your portfolio versus de managed account: what is your horizon to evaluate the underperformance compared to your portfolio? What would make you to change the bank provider?
In case of OPEC+ struggling to maintain oil prices at $75 amid rising non-OPEC production and a potential market oversupply, are you concerned about your bullish stance on OXY if oil prices drop further into 2025?
Hi Mark, please excuse me for asking a question before watching the video -
I just finished up watching the sector studies XLU video and it seems like a promising sector to be invested in during this phase of the business cycle (late expansion / contraction).
If I wanted to be overweight XLU (or any sector) would it make sense to simply be long SPY and sell puts on the sector ETFs that I want to overweight?
Also- do you have any preferred readings on learning the business cycle?
Appreciate all you do- thank you!
don't think you would want to sell vol heading into this eoy
@@antoineparadis9959 Why not? Heading into a contractionary period seems like a perfect time to sell vol. on the sectors that outperform in this environment. Even if we were in an early recovery period you could sell vol. or even use risk reversals on the sectors that benefit in those environments (XLY,XLI for example).
@@antoineparadis9959 Why not? It seems like there's always an opportunity to sell vol. on sectors that outperform in whichever stage of the business cycle we find ourselves in. Selling vol. on XLE/XLU going into a contractionary period seems like a no-brainer to me. Then rotate into selling vol. on XLY/XLI as we move back into an early recovery period.
@@antoineparadis9959alternatively you would want to sell if you were convinced … vol will give premium
Surprised you didn't mention Intel in this Market Outlook. Just curious what your thoughts are on the company's drop and if you'll start following them for a potential new position
Could you explain further how you would implement a carry trade as a retail trader. Still confused
Is AQR's Risk Parity approach where they systematically overweight underperforming assets in hope of a rebound possible for retail investors to implement? What issues can you expect from that? Thanks
Having sold LW 16 Aug , if i wanted to exit lets say price is 59, then to get premium and exit do i need to sell same expiry. I have never done this so needed some guidance
Since we will be having a bull steepener in which thew longer part of the curve will remain the same and the rate cuts will be in the mid and short part.... why do you prefer TLT vs for example IEF? do you see fiscal risk affecting TLT?
Hi Dr. Mark, Do you think the sell-off was overdone on Thursday and Friday? I think it was exacerbated by the fear of a full-blown out war in the Middle-East after Hamas's leader was executed in Iran. Immediately post this news hitting the market, option premiums skyrocketed as well as volatility and increased amt of activity. That is what IMO truly led to a sell-off. I did see the earnings of many companies that beat significantly and gave good guidance. But their stocks dropped close to 8-9% as well.
Hi Mark, I'd like to know where I can find expectations for the economic indicators, I love watching your updates but I'd like to start thinking about them independently.
forexx factory
Are there any significant changes in L3 CFA curriculum for PM? I know about new pathways, but PM isn't much changed, right?
Using Interactive Brokers, is it possible for a retail investor to short government bonds and essentially borrow at those lower rates? Wouldn't that be a simpler option rather than going to a retail bank and paying higher rates through them?
You have mentioned in the past that the US’s current fiscal spending path will force the Fed to bring rates close to the zero line because the “G” component of GDP growth will primarily be interest payments. Since there is a relatively low multiplier effect in government spending, could it be argued that the drag from G won’t affect GDP growth much due to its low efficacy? Thanks for your time as always Dr. Mark.
you said it would be a crime not to sell the volatiltiy in the index or on stocks.
How about selling call spreads on the VIX index ETF ViXY to profit from its deflation? This could be the purest volatility play, right?
Mark the labor force growing by 277k and 420k June and July respectively creates a very interesting observation on the seriousness of the unemployment numbers.
However, I could not find where on the BLS reports it showed those numbers. I have even used Chat GPT to help me find them and it keeps saying 177k and 222k increase to the Civilian LF.
Can you point to exactly where I can reference your LF numbers or clarify if you are looking not at the civilian LF but some other figure?
This will be very helpful as this is a core tenet to your argument and a good one!
Thanks!
Hello
Can you please show us the math on GM's share buyback and how to come up with a price target from it? I'm guessing it's now your highest convinction based on the $39 share price
very insightful read on Sahm's rule. The analogy to gravity is on point. Would you say trading on sentiment has become more profitable than trading on fundamentals?
Suppose a primary dealer whose main function is to participate in primary auctions in government securities and that primary dealers can access to repo and reverse repo facilities from the central bank. hence, if those facilities were withdrawn by the central bank there may be a liquidity stress for the primary dealer. so how can such an assessment should be carried out please?
Please explain the relationship between USDJPY carry trade, Nikkei 225 dropping 12.4% and Tech/broader marker selloff. How I think it works in my mind: I borrow JPY and buy USD, pay JPY interest and buy e.g. NVDA with the USD. JPY strengthens by ~10%, I need to cover so I sell NVDA and buy back JPY. Where does the Nikkei 225 12.4% drop fit into this? Thank you.
Large Japanese companies are major exporters to the US, so with weaker economic data and a weakening consumer in the US, future Japanese revenues may be lower. Also, if much of those revenues are in the form of the US dollar, and the dollar is weakening relative to the Yen, those revenues (in Yen) will also be lower. Just my educated guess.
Hello Marc. About your outside money managers? What strategy are they implementing that you would expect them to outperform you?
What's the point of Treasury Buybacks program? Isn't the Fed also letting bonds expire during this QT era? This seems contradictory.
Regarding the GM puts, you mentioned selling puts @$11.2 for $41 strike. Have you been rolling it and adding the premiums? Current Dec'24 premiums to sell 41 are like $3. What am I missing?
Hi, Mark! Question about neo classical growth model. Whats the difference between capital accumulation and capital deepening? Why slow growth developed countries above steady state should converge by increasing growth of GDP and Y/K ratio. What force will do that process?
When you create a strip selling puts, I'm assuming you place all the orders on the same day and not placing them overtime?
Hi Mark, can you explain a bit about the Yen reverse carry trade?
Have you seen VIX near 30 last week? Came down to 23-24 at the end of week. Do you think it will fluctuate above 20 mark for a while (a few weeks) or will come down below 20 this week or next?
Hi Mark, I'd like your further thoughts on 'if there's a lag on the way up, there's a lag on the way down'. From here, it seems like entities can hold on to lower cost debt until it comes due on the way up, but can immediately roll-over debt to lower rates on the way down (providing there's no payment penalty that would counteract the gain of doing so).
Also, I made that infotainment comment a few weeks ago - It's more a me problem. I'm watching it for fun but it's not sinking in particularly well, or at least i'm not inspired to pick up the tools myself.
Regarding the insurance for your truck: don’t you have website in Canada that allows you to compare the car insurance prices across different insurance provider? I guess if your switch to another insurance company they will have no history of you so you might get lower prices. We in Netherlands have those websites in abundance.
Great analysis this week. Thanks Dr Meldrum
Why buy options on NEE instead of NEP, which has a better p/e and higher divident?
Hi Mark
Can you please explain what fixed strike volatility is and how to use it in trading given the latest spike in IV.
I understand your argument on the Sahm rule, but my follow-up question to this: wouldn't the rule have captured changes in labor force over time as well? Labor force is not static year over year after all. Then again, maybe we are in a differeny regime post-COVID versus pre-COVID when it comes to labor force (I'd argue that we are in Canada)
Would it be possible for a retail investor to enter into a swap, or maybe engineer a swap?
Thoughts on Buffet selling 1/2 his Apple stake?
Which diffusion index are you looking at?
Hi Mark, Any comments on Pershing Square's PSUS failed IPO, and Bill Ackman's closed funds (LON: PSH and AMS: PSH) in general?
One factor to consider for increased in participation for J-J is graduate students from 4 year university.
27:04 Dr. Mark, during this segment you showed a population growth number as part of the Sahm Rule discussion. Does this population growth number only include the working population?
I see the "All in pricing" applied level bundle is still available on the site. Was the deadline for this extended? I recall it was 31st July when it was going to disappear.
Not sure if I follow your statement that a +100k increase in population, would require a 62.6k increase in jobs to keep unemployment stable. Unemployment rate change stability is dependent on unemployment and labor force increasing at same ratio as existing unemployment rate.
Surely what is true is to keep participation rate stable. -100k increase in population need 62.6k increase in labor force and then jobs to increase at (1-unemployment rate)%. Maybe you could walk through the math of your statement again.
A final comment is whether your population increase number is isolated to increase in working age population. It could be that the population is growing but with increase focused in non-working age group. I understand this is model driven so likely variability in number is low.
Been waiting the whole week!!!! ❤
You once said that tech is deflationary. If that’s the case, wouldn’t you want to position yourself in big tech that isn’t overbought? The likes of AMZN, GOOG, and META are raking in insane amounts of cash every quarter. They can choose to deploy it however they want, right now they’re spending it on AI and data centers but they have the ability to pull several other levels and pivot quickly.
Where do you get IVP for 52,26,13 from?
Why did the japan 1 day market downfall impact the US market or did it even impact it? Its been discussed on bloomberg etc
Exciting week
Mark. GM is not known as a quality automaker. My first car was a sunbird in 1986. I went Japanese thereafter. Does your investment make sense for a car maker not known for quality?
😂
I like the mic drop at the end
where are you getting the volatility percentiles?
In inkr there is a tab
20:59 - 34:43
56:09 - 1:01:54
1:05:32 - 1:13:33
1:17:09 - 1:19:35
Favorite time of the week, hearing my god Mark dropping a new video
35:50 You mean, steepeners? This is steepener move.
Musk wants to delay tangling with the unions for as long as he can. Buying GM would hasten that confrontation, no?
Sahm rule - self-fulfilling prophecy
Regarding your question in the Live Q&A about creating a cult from an anti-cult of "easy solutions" and other BS like “IM Bullshidemy” you’ve mentioned: Don’t you think that through your own work, you’re already attracting those who value discipline, process, and education? Those who are committed to this path are already following it, while those who aren't interested in hard work likely won't change their minds, no matter what you do. Some people simply prefer avoiding hard work and are unlikely to be swayed.
Hey Mark, can you talk a bit more about using a box trade to convert RRSP income into a capital gain?
What is your favorite pizzeria in Windsor?
Capri
@@MarkMeldrum That is my favorite as well. A couple times this summer I drove from the GTA to Windsor to get some.
volume too low
crank it up then.