Dominion 1,944
PEPCO 29,000
as of 1/29/2011 at 9:00am
PEPCO 29,000
as of 1/29/2011 at 9:00am
Saturday, January 29, 2011
Monday, January 24, 2011
Spreads and Sports stuff
Here are my Unwritten rules for sports spreads -
1) if the underdog has a good chance to win I feel more comfortable taking the points
2) psychological element for people to be predisposed to take the favorite - with this rule i believe the favorite generally receives about 1-3 pts more than they would otherwise
3) expectations theory - some teams play better as underdogs because they are not expected to win. the converse- some teams play worse when they are expected to win - avoid the team that consistently loses when favored.
4) obvious: spread builds in 2-3 pts for home team favorite
5) the goal of vegas is to have equal betting on each side. the spread moves to engineer the 50-50 split. therefore the house makes all money on transaction basis, aka 'the juice' - just like goldman sachs.
6) first half of the nfl season is anybodys guess. things are so crazy because there is no recent history to go from. everything is based on last years performance - which may or may not hold true for the current season.
7) if you honestly don't have an intuition of what team to take, just take the points (i.e. - greenbay and pittsburgh)
8) second half of the season you have players 'checked out' when they are essentially out of it for the playoff chase. this may lead to weeks where blowouts are common.
9) always always expect the unexpected.
Online gambling ban in the U.S.
The brilliant lawmakers think that banning online gambling in the U.S. actually acts in the moral best interest of our citizens - we all know how prohibition worked out for Al Capone. Passing laws does not curb demand, it creates black markets. Markets that exist for activities the government has shunned because they do not act in the best interest of their constituents. How much tax revenue could be made from online gambling in the U.S.? Not only does legalization allow regulation, but it will bring in billions of dollars in tax revenue, that would otherwise not exist (not to mention create jobs). In England you can bet on the soccer (football) game, at the stadium!!!! Drugs are illegal, but that doesnt stop people from using. Alcohol used to be legal, but that didnt stop people from drinking. The markets exist, just not for the taxation and regulation purposes of the Federal Government. The government can refuse to allow an service or industry to be a legal operator - but the government can only deter demand on the margin - the margin that would probably not be participating if it were legal. My reasoning is that many people who choose to gamble or do drugs only do so for the thrill. Turning drugs or gambling into a legally sanctioned government regulated industry will more than likely strip away some of the glamor that exists. Just a hunch, but very obvious in certain industries that are exploited in movies, music, and media.
<http://sportsdirect.usatoday.com/odds/usatoday/odds.aspx>
Stocks I'm currently holding:
XOM Jan 2012, 60 strike Call option ( this will increase in value as pump price increases)
Stocks I like:
MO, PM, RSG, WM, TEVA, AVB, V, BAC
Economic trends:
asset price inflation
interest rates creeping up as recovery strengthens
double dip not probable until oil reaches 130+
slow and steady
pent-up demand for housing begins
house prices depend on rent, jobs, income, and demand
1) if the underdog has a good chance to win I feel more comfortable taking the points
2) psychological element for people to be predisposed to take the favorite - with this rule i believe the favorite generally receives about 1-3 pts more than they would otherwise
3) expectations theory - some teams play better as underdogs because they are not expected to win. the converse- some teams play worse when they are expected to win - avoid the team that consistently loses when favored.
4) obvious: spread builds in 2-3 pts for home team favorite
5) the goal of vegas is to have equal betting on each side. the spread moves to engineer the 50-50 split. therefore the house makes all money on transaction basis, aka 'the juice' - just like goldman sachs.
6) first half of the nfl season is anybodys guess. things are so crazy because there is no recent history to go from. everything is based on last years performance - which may or may not hold true for the current season.
7) if you honestly don't have an intuition of what team to take, just take the points (i.e. - greenbay and pittsburgh)
8) second half of the season you have players 'checked out' when they are essentially out of it for the playoff chase. this may lead to weeks where blowouts are common.
9) always always expect the unexpected.
Online gambling ban in the U.S.
The brilliant lawmakers think that banning online gambling in the U.S. actually acts in the moral best interest of our citizens - we all know how prohibition worked out for Al Capone. Passing laws does not curb demand, it creates black markets. Markets that exist for activities the government has shunned because they do not act in the best interest of their constituents. How much tax revenue could be made from online gambling in the U.S.? Not only does legalization allow regulation, but it will bring in billions of dollars in tax revenue, that would otherwise not exist (not to mention create jobs). In England you can bet on the soccer (football) game, at the stadium!!!! Drugs are illegal, but that doesnt stop people from using. Alcohol used to be legal, but that didnt stop people from drinking. The markets exist, just not for the taxation and regulation purposes of the Federal Government. The government can refuse to allow an service or industry to be a legal operator - but the government can only deter demand on the margin - the margin that would probably not be participating if it were legal. My reasoning is that many people who choose to gamble or do drugs only do so for the thrill. Turning drugs or gambling into a legally sanctioned government regulated industry will more than likely strip away some of the glamor that exists. Just a hunch, but very obvious in certain industries that are exploited in movies, music, and media.
<http://sportsdirect.usatoday.com/odds/usatoday/odds.aspx>
Stocks I'm currently holding:
XOM Jan 2012, 60 strike Call option ( this will increase in value as pump price increases)
Stocks I like:
MO, PM, RSG, WM, TEVA, AVB, V, BAC
Economic trends:
asset price inflation
interest rates creeping up as recovery strengthens
double dip not probable until oil reaches 130+
slow and steady
pent-up demand for housing begins
house prices depend on rent, jobs, income, and demand
Monday, January 10, 2011
natural and adverse selection
Why hasn't the FHA received bailout money from treasury?
During the 2005-2006 housing boom, a government loan was simply not necessary because the private markets were allocating resources to crowd out their government mortgage product. The banks provided lower cost alternatives with 100% financing, so it simply was not economical to use a government loan. There was adverse selection among banks to cream skim the 'opaque loans'.
FHA's market share increased dramatically as house prices crashed an private capital fled. The private markets were essentially acting perfectly cyclical to the economy, that I will argue is the opposite of capital flows from efficient allocators were doing. Because money was chasing the high returns creating a self fulfilling prophecy of higher and higher returns on capital, the most efficient capital with the best possible outcome is allocated at the bottom of the market.
If you had used leveraged (much like a home buyer uses leverage in obtaining a mortgage) your returns would have significantly outperformed some of the best corporations in the world, simply because your timing was right, while all corporations were teetering on the verge of bankruptcy.
If the Federal Reserve had not provided emergency liquidity measures to banks, companies, and foreign countries, the fallout would have been catastrophic. The crash of 2008 could have been (arguably) exponentially worse, and (arguably) more similar to the 'flash crash' of 2010; of course this hypothetical scenario occurs in theory only.
The rate of change in prices during the flash crash occurred over an insanely shorter time period, and buying opportunities were limited to those with super-computers and GTC orders in the system. The pyschological effect was not felt because of the speed of the flash crash. On the other-hand, the recession was analogous to the flash-crash but drawn out more slowly as banks reported flawed earnings and recognized the depreciated assets over a longer period of time.
Corporations should always behave similarly to FHA and take the most risk (FHA is always taking the riskiest traunch) at the bottom of the economic cycle. Banks and companies pulled back and caused the credit crunch because they had too much capital allocated at the top of the cycle. Psychological factors contribute to buy/sell decisions and do not always allocate capital efficiently. The government provides insurance liquidity as a last resort and arguably the most efficient capital flowing through the system is being cherry picked at the bottom.
Figure 1:
<http://economix.blogs.nytimes.com/2011/01/10/federal-reserve-worlds-most-profitable-bank/>
If you had used leveraged (much like a home buyer uses leverage in obtaining a mortgage) your returns would have significantly outperformed some of the best corporations in the world, simply because your timing was right, while all corporations were teetering on the verge of bankruptcy.
If the Federal Reserve had not provided emergency liquidity measures to banks, companies, and foreign countries, the fallout would have been catastrophic. The crash of 2008 could have been (arguably) exponentially worse, and (arguably) more similar to the 'flash crash' of 2010; of course this hypothetical scenario occurs in theory only.
The rate of change in prices during the flash crash occurred over an insanely shorter time period, and buying opportunities were limited to those with super-computers and GTC orders in the system. The pyschological effect was not felt because of the speed of the flash crash. On the other-hand, the recession was analogous to the flash-crash but drawn out more slowly as banks reported flawed earnings and recognized the depreciated assets over a longer period of time.
Corporations should always behave similarly to FHA and take the most risk (FHA is always taking the riskiest traunch) at the bottom of the economic cycle. Banks and companies pulled back and caused the credit crunch because they had too much capital allocated at the top of the cycle. Psychological factors contribute to buy/sell decisions and do not always allocate capital efficiently. The government provides insurance liquidity as a last resort and arguably the most efficient capital flowing through the system is being cherry picked at the bottom.
Figure 1:
<http://economix.blogs.nytimes.com/2011/01/10/federal-reserve-worlds-most-profitable-bank/>
Subscribe to:
Posts (Atom)