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BLUF:  I'm still a big believer in the TX MF (class C) market, but based on what I am comfortable with I can't justify buying anything right now because of the average to below average CAP rates that I'm seeing.

The Fannie Mae/Freddie Mac MF loan program is the best kept secret out there.  I've put the MF search on hold because the numbers don't make any sense right now, will probably get serious again when the CAP rate gets back up to ~9 or 10%.  I am on several MF marketing distros and there is just nothing good right now as compared to 2 years ago.  I found a really good deal (~70 units) in Amarillo at the time but was not able to follow through with the transaction because of a conflicting TDY and still am kicking myself for it.

I eventually bought a piece of land in Texas and am planning to build several units on it.

The upcoming downturn in the housing market is going to be quite lucrative if you are a rental property investor.

Timing is everything!

Edited by panchbarnes
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  • 3 months later...

Interesting discussion  on the recent 737 max mishaps...  is this guy full of shit?

https://old.reddit.com/r/wallstreetbets/comments/azo3vp/im_a_pilot_shortput_ba/

Quote

There exists a new system on the 737 MAX jets. On all last-gen Boeing jets (and the vast majority of commercial and private jets), there exists systems designed to prevent a stall (the term used to describe the state an aircraft is in when it's currently aerodynamic profile is depriving it of lift to the point where the aircraft will begin to fall). These systems manipulate or provide feedback in the pilot controls to encourage a stall recovery. However these systems are easy to identify and combat, and disable.

 

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Let's just say it's obvious he has no insider information.  Probably a recreational pilot because he falsely extrapolates light piston operations to airline operations, which leads him to a questionable conclusion.  

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2 hours ago, panchbarnes said:

Interesting discussion  on the recent 737 max mishaps...  is this guy full of shit?

https://old.reddit.com/r/wallstreetbets/comments/azo3vp/im_a_pilot_shortput_ba/

 

He’s not wrong, but he’s oversimplifying it. Google MCAS. Flown the max dozens of times. A bad input would likely catch someone unfamiliar by surprise, but everyone should know how to handle it after Lion Air. Might be a good time to buy Boeing. JK.

Edited by torqued
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He's not necessarily wrong, he's just 24 hours late... Boeing stock already suffered its dip by the time he posted that. It's the problem with any random individual trying to pick stocks based on not-really-inside information... by the time you make a purchase, you're far behind the guys with special computer systems designed to reduce delays by a few milliseconds who do this for a living.

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  • 2 months later...
On 5/21/2019 at 6:07 AM, panchbarnes said:

I personally have owned Fannie and Freddie preferreds since early 2015 when they were trading for $4 on a $25 par value. At $12 today the risk/reward ratio doesn’t look as great since you can only make 2x. I got involved expecting favorable outcomes in the courts which didn’t happen. Then Trump got elected and they got a second path to paying out. All of that is context to say that even though I like the idea in some ways I don’t like buying the common stock as a hail mary/get rich quick scheme.  If you want a good investing forum with smarter people, check out Corner of Berkshire and Fairfax. They have a thread on FNMA/FMCC that is 1,258 pages long dating back to January 2011 (https://www.cornerofberkshireandfairfax.ca/forum/general-discussion/fnma-and-fmcc-preferreds-in-search-of-the-elusive-10-bagger/). While the Trump administration is the first big proponent wanting to move this forward it is not a new idea.

I could give lots of reasons why I’m not sure this will really work out but at the end of the day it comes down to motivation. Right now the government is in a great position, these companies throw off lots of cash and it all goes directly to the Treasury. If you privatize them again the big winners will be a bunch of hedge fund assholes like me. Of course Mnuchin supports that but who else in government is going to stick their neck out to force through a massive change on something most people don’t see as being a problem in order to benefit Bill Ackman and Bruce Berkowitz?

I hope I'm wrong because the government overstepped their authority by nationalizing these business a decade ago, stealing billions of dollars from the private citizens who owned them in the process, and I would like to believe we are better than Venezuela. But I'm also not holding my breath and it's combined about 1% of my portfolio.

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Thank you for the well-written insights!  I've mentioned before that I'm more of a real estate guy, so I plead ignorance on stocks (and this is OTC...) and the associated analytical TTPs.  The reddit WSB forum is quite entertaining to read as autistic children brag about losing money, but I also learn interesting tidbits from time to time.  TacAirlifter's FNMA posts piqued my interest and I've been trying to figure out if this is a smart play or not (I'm inclined to think it is).  Trump has consistently demonstrated that he is a man of his words, so if he wants to privatize FNMA/FMCC I think it's likely to happen (w/ the support of Wall Street), even if FNMA/FMCC are both cash cows to the gov't.

Trump's motivation may defy logic in this case, but it's good enough for me to make a little gamble on it (does this make me a WSB autist?)

Edited by panchbarnes
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  • 2 weeks later...

The fact that I still own them and haven't sold tells you that I think it is not a bad trade. It just scares me when I see people going all in like this is some sure thing. Throw 1% of your portfolio at it, if it works out you make a decent bump uncorrelated to the rest of the market but if they never leave conservatorship and trade down to $0 you haven't lost much.

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  • 4 weeks later...

Wasn’t sure which thread to ask this in, Credit scores, so there I was, buying a house when in the mail comes the credit scores for my wife and I that the bank ran.

WTF? So my wife who without me managing 100% of finances would be net worth -$169k in credit card debt and probably filed for bankruptcy 2x....has a credit score 800+

I have decent credit scores in the ~790 range with a long credit history, zero lateness in my life, nothing outstanding.

What gives on how this stuff is computed?


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44 minutes ago, di1630 said:

Wasn’t sure which thread to ask this in, Credit scores, so there I was, buying a house when in the mail comes the credit scores for my wife and I that the bank ran.

WTF? So my wife who without me managing 100% of finances would be net worth -$169k in credit card debt and probably filed for bankruptcy 2x....has a credit score 800+

I have decent credit scores in the ~790 range with a long credit history, zero lateness in my life, nothing outstanding.

What gives on how this stuff is computed?


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I had a similar situation. Wife never had any loans/lines of credit her life except her federal student loans. I’ve pretty much been on my own since 18, never missed a payment/no late payments, several accounts that have been open for a long time blah blah blah. Basically I have been working on building a outstanding credit score for years, wife hasn’t done anything, her score was pretty much the same as mine. 

There are a lot of variables that go into it, at the end of the day you have to remember it’s just number that tells companies how likely they are to make a buck off you. 

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3 hours ago, di1630 said:

Wasn’t sure which thread to ask this in, Credit scores, so there I was, buying a house when in the mail comes the credit scores for my wife and I that the bank ran.

WTF? So my wife who without me managing 100% of finances would be net worth -$169k in credit card debt and probably filed for bankruptcy 2x....has a credit score 800+

I have decent credit scores in the ~790 range with a long credit history, zero lateness in my life, nothing outstanding.

What gives on how this stuff is computed?


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Could be credit utilization. If you are using a pretty significant chunk of your available credit and she's using a smaller fraction of hers, then that could be where it's coming from. They also factor in patterns of utilization, so if she's consistently utilizing 15% of her available credit and you're spiking up and down, that doesn't look as good.

It's not worth fretting about, though. Anything over 750 is pretty much treated identically.

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  • 3 weeks later...

Today I was going to move my SP500 index fund holdings ~100k into a money market fund with the intent to move it back at next market correction.

First time I have exchanged things like this but I stopped and investigated when I got to the “taxable event warning”

I’ve dollar cost averaged into this fund for 10+ years at significant gain so Am i correct that I’ll pay capital gains of ~15%.

The realized gain is about $60k...am I going to get taxed for $9k if I make this exchange.

F-cking govt.


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34 minutes ago, di1630 said:

Today I was going to move my SP500 index fund holdings ~100k into a money market fund with the intent to move it back at next market correction.

First time I have exchanged things like this but I stopped and investigated when I got to the “taxable event warning”

I’ve dollar cost averaged into this fund for 10+ years at significant gain so Am i correct that I’ll pay capital gains of ~15%.

The realized gain is about $60k...am I going to get taxed for $9k if I make this exchange.

F-cking govt.


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Here here brother. (Hulk Hogan voice).

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Hopefully you'll both, "Don't do something, just stand there."

Yes, if you're talking about a taxable/brokerage account and not an IRA, TSP, 401k, etc, then you'll owe capital gains on your growth.

That could be long term (rate varies) or short term (taxed like income), depending on when you bought and also how you track your cost basis.

If you have a low income year or deploy or whatever, you can use that to reset your cost basis with "tax gain harvesting" and pay 0% LTCG.

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3 hours ago, brabus said:

Fuck, I was thinking of doing the exact same thing...assholes. So now what have you decided? Bite the bullet or keep them there and ride the wave?

This has some potential: Trump Moves to Lessen the Pain of Capital Gains Taxes (17 July 2019).

https://www.heritage.org/taxes/commentary/trump-moves-lessen-the-pain-capital-gains-taxes

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, I was thinking of doing the exact same thing...assholes. So now what have you decided? Bite the bullet or keep them there and ride the wave?

I’m going to do some math and look at my income. I might take 1/3 out ~$3k in taxes. I’m trying to stay objective but it’s tough to pay that bill.

It might be easier to pay the money vs watch a 10% correction wipe out gains.

I’m not sure my long term strategy. Never thought of this stuff when I started 18 years ago.

That’s why I’m asking you f—-ers


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12 hours ago, di1630 said:


I’m going to do some math and look at my income. I might take 1/3 out ~$3k in taxes. I’m trying to stay objective but it’s tough to pay that bill.

It might be easier to pay the money vs watch a 10% correction wipe out gains.

I’m not sure my long term strategy. Never thought of this stuff when I started 18 years ago.

That’s why I’m asking you f—-ers


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Unless you actually need the money now, you're better off just holding on and riding the wave. Many studies show that buy-and-hold outperforms market timing >69% of the time.

Think about it this way - let's say you sell today and there is a 10% correction immediately after that. If you sell and pay $9k in taxes, you're left with $91k. If you hold and eat a 10% dip, you're sitting at $90k... virtually identical scenarios. On the other hand, if you sell now and the market goes up another 10%, you're talking about the difference between $91k and $110k and you're going to be kicking yourself. 

Couple that with the fact that the market tends to rise over time, and holding starts to look even better. Short term losses and gains are almost impossible to predict, but macro performance in the long- to very long-term is actually pretty easy: the market's going to go up, and the longer you hold on, the better your odds are of capturing that return.

Here's another example. Let's say you're 35-40 right now and don't need the money right away, so you're looking at a 30-year horizon for your investments. What are the odds that the market will rise over the course of those 30 years? Obviously there aren't any guarantees about the future, but if you use the past as a guide, you would say virtually 100%. If you look at the performance of the S&P 500 over the past century, and try to pick the absolute worst time to invest (at the market peak immediately prior to the Great Depression) with a 30-year horizon, you're still looking at about an 8% annual return over that time period.

If you let short-term fear and emotions rule out, you might get lucky here and there, but the odds aren't in your favor when you're betting against that kind of long-term macroeconomic trend. Hold on long enough though, and you're almost guaranteed to win.

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