After 2 Years on the Market, Now a Short Sale in Margate Park: 857 W. Ainslie
This top floor 2-bedroom at 857 W. Ainslie in the Margate Park neighborhood of Uptown has been on and off the market since June 2009.
It is now listed as a short sale at $141,000 under the 2007 purchase price at just $229,000.
Margate Park is commonly thought of as the area of Uptown north of Lawrence, East of Sheridan and South of Foster.
Like Buena Park, the neighborhood is dominated by many vintage buildings.
The 1400 square unit has new hardwood floors, a fireplace and a sunroom.
It also has the features buyers look for such as parking, central air and in-unit washer/dryer.
What price will it take to finally sell this unit?
Ricardo Morales at Re/Max Signature has the listing. See the pictures here.
Unit #3: 2 bedrooms, 2 baths, 1400 square feet
- Sold in June 2007 for $370,000
- Originally listed in June 2009
- Lis pendens foreclosure filed in October 2010
- Was listed in May 2011 for $284,000
- Reduced
- Currently listed as a “short sale” for $229,000
- Assessments of $171 a month
- Taxes of $5836
- Central Air
- Washer/dryer in the unit
- Parking included
- Bedroom #1: 14×13
- Bedroom #2: 13×13
- Sunroom: 9×10
Wow – it seems as though nobody has money anymore and NOTHING is selling….oh wait, I forgot – this is “deal chatter” where we only talk about one end of the market and cherry pick specific properties that are selling at or below 2004 levels!!! OK – now back to the real world….. Here is one under contract to add balance:
http://www.redfin.com/IL/Oak-Brook/1902-Midwest-Club-Pkwy-60523/home/18083549
yes clio… Call the buyer.. Sure they are loving it today. I can see people going to closing today, with a nice sick feeling in their stomach. Then up to the wisconsin fairgrounds to celebrate!!
clio I was not aware Liberachi had relatives here in Illinois??
ze, the only people walking away and panicking about the world economy today are those who are either:
1. unexperienced/young
2. unstable
3. scaredy-cats
4. wishy-washy wimpy whiners
Those who are experienced, well-positioned, smart, stable (psychologically speaking), and who have long-term vision will not be adversely affected.
Bob – yep, they are everywhere around me – here is one a block away from me:
http://www.redfin.com/IL/Oak-Brook/204-Canterberry-Ln-60523/home/17991802
clio, with all due respect, the area you’re talking about, Oakbrook 60523, is not terribly representative of the Chicago area as a whole. 60523 is a wealthy zip code where 62% of all residents have incomes of over $75,000 annually, and fully 30% enjoy incomes of over $200K. I would expect people in this elevated bracket to weather the economic storms a lot better than the bulk of the population, which earns $40K to $75K, or the growing cohort that earns less than $25K.
Unfortunately, that last group is growing rapidly, and it includes too many people who once earned vastly more and thought they were safe from the fallout of 40 years of fiscal mismanagement, the loss of our manufacturing, and the destruction wrought by the “carpe diem” public policies of the past 30 years.
While it’s good that there are SOME people who still have money, there aren’t enough people in the rarified demographic you’re referring to, to offset the destruction being wrought on the rest of us as our economy “resets” to lower wages and salaries across the board in tandem with rising energy and commodity prices.
Apartments are for renting. This looks and feels like an apartment.
Looks like a pretty nice place to me and I like Margate Park, I doubt it goes under 200k.
Ah Clio, you set me up. I’ve been meaning to talk about Oak Brook once again. First, you don’t know what 1902 is under contract for. Let’s wait and see. And what about 508 Midwest Club where I represented the buyer? We got it for $1.1 MM when it was listed at $1.35MM. They just took our offer without negotiating. It had started out at $1.845MM.
After we closed 1206 Midwest Club dropped their price to 1.099MM from 1.299MM after starting out at 1.899MM and it still hasn’t sold. It was purchased for $.895MM back in 1998.
I have more. This is happening all over Oak Brook.
In the last year only 2 properties have closed in Midwest Club. There are currently 14 on the market so that would be a 7 years supply.
Gary, Gary, Gary…..if you dislike Oak Brook so much, why do you represent buyers who want to move here? You are brave bc you use your real name – but you have to be careful. It is very easy to get iced out of the realtor society out here – these women are BRUTAL – don’t mess with their commission.
It seems like this place has finally dropped to a reasonable price.
Again, it’s jaw dropping that someone spent nearly $400,000 for this place only 4 years ago.
I don’t dislike Oak Brook. I just believe that you have to be honest. For people who want to live there the opportunities are a lot better than just a few years ago.
And I know first hand about how snarky it can be out there but if you provide a better alternative you will prevail in any industry. BTW, the snarkiness really turns off a lot of clients.
The people who buy this will be a young, childless couple. They’ll have a kid, and in two years we’ll be talking about the unit being on the market again when they decide to move to the suburbs. But this time the photos will show a crib in the second bedroom.
Really Dan #2? The people/person who buy this may be gay and or straight and never have kids.
WOW this place is cheap. Nice place, I’bet it goes at least at asking price.
Yes, because Oak Brook houses and Uptown condos are such an equal comparison….NOT!
As a former Uptowner (who luckily got out before things got too bad, it makes me sad to see this happening. I wish this area could see a turnaround. That said, this is a decent place, but it’s crazy that it ever sold for 370K.
What happened to everyone saying how much better an investment the stock market was than real estate? Stock market down over 15% in a month. I was mocked for “not understanding history” and being foolish for selling everything and going short. Even Chicago real estate hasn’t fallen that much in a year. BTW, that is how you spot a top in a market. The sheep get sheared.
Chuk,
Hold your horses. The stock market is still up 10% from a year ago. Stocks are too volatile to measure them on a month-to-month basis. They might be up 15% from now in another month. In fact, I’d be surprised if they aren’t.
Stock market valuations have been a joke supported by unsustainable govt spending since April 2009.
Vlajos,
Sure, they could be gay or never have kids. I’ll concede that. On the other hand, this just looks so much like other listings I’ve seen with a crib in the bedroom.
Bob,
Stock market valuations were pumped up by the Fed, there’s no doubt. However, on a price-to-earnings basis, the market looks pretty realistic right now. I definitely feel better about the DJIA at 11,000 than at 12,700. The current levels are about right.
Of Obama could keep using the federal VISA the stock market would still be frothy. But tea party house Republicans cut up the Visa Lmfao. No more selling our kids further upstream to live the good life today.
test
“Hold your horses. The stock market is still up 10% from a year ago. Stocks are too volatile to measure them on a month-to-month basis. They might be up 15% from now in another month. In fact, I’d be surprised if they aren’t.”
Which is exactly why buy and hold is for suckers.
I twice tried posting a link to a trib article map from this morning but it won’t go through. oh well, go to the trib and look at the relative size of the green zone to the rest of the city, and you’ll understand why people choose to move to teh suburbs
market still up over last 1yr time period chuk (probably not for long). better than chicago real estate!
when did you make your going short call? if you did it prior to the last month, kudos. if not, I dont know. it’s kind of like sabrina pointing out how great amzn and lulu have been since the 09 low. bc if you define the holding period in retrospect, then 15% is nothing.
“However, on a price-to-earnings basis, the market looks pretty realistic right now.”
PE is just an excuse. It is a joke. If those E’s fall off a cliff, the P’s will follow.
btw, the S&P PE was at an all-time high at 666.
HD — what is the title of the Trib article with the map?
“when did you make your going short call? if you did it prior to the last month, kudos.”
He made it on here sometime before July. Beyond that, who knoes.
Chuk,
It would be fun to try to time the market, and wonderful if you succeed. But I’ve never been able to do it, and neither have most investors. I agree buy and hold has its problems, for example if you had planned to retire in the spring of 2009 with proceeds from your stock investments. On the other hand, I don’t think the average investor has time or knowledge to keep getting in and out (I know I don’t).
add the ht tp : media.apps.chicagotribune.com/chicago-census/less-than-five.html
I don’t know Clio, maybe I am a wimp, but I am seriously worried about state of our economy and the future in general. Education is down the drain, most “made in US” items are low quality junk, crazy fanatics denying evolution are running the country with ideology instead of reason, etc…
Bob,
Someone should have cut up the GOP’s Visa card in about 2002. Then maybe we wouldn’t be where we are now.
“CH on August 8th, 2011 at 8:42 am
when did you make your going short call?”
In this thread on May 1st, the day of the 52 week high:
http://cribchatter.com/?p=10415#comment-152680
In the same thread that Sabrina said my bearish posts were a sign of the “bottom”:
http://cribchatter.com/?p=10415#comment-152662
“But you Chuk, and others, have a lot of fear about stocks- again- which is the sign of a bottom.”
I had no idea that some of my neighbors just didnt respond to the census (or excluded their under 5 children). Assuming its the former, I can confirm an undercount of at least 4.
“It would be fun to try to time the market, and wonderful if you succeed.”
But you don’t need to time it!!! No one buys 100% at once, and no one sells 100% at once. People are trained to “dollar cost average” when they buy. But NO ONE thinks to “dollar cost average” when you sell! As the market goes down, you buy more. Great. But as the market goes up, you should SELL more. It is a two way street. You do not need to time it perfectly. If you owned AAPL at 200, you don’t need to ride it all the way to 400 and sell that day. Sell 10% at 250. Sell another 10% at 300, etc.
By definition, I end up long at bottoms, and either out of the market, or short at tops. There is very little “timing” involved.
“most “made in US” items are low quality junk”
What consumer goods (other than cars–and even then its about US brands, not US manufacturing, which does a fine job on non-US makes built in the US) are you talking about? Most anything I buy that’s made in usa (not much, really) is still better than the non-US substitute.
“As the market goes down, you buy more. Great. But as the market goes up, you should SELL more.”
That’s exactly the strategy I’ve used over the last 10 years or so. Anything I buy on the way down I sell on the way back up when it’s appreciated by 10%. It has worked really well.
“That’s exactly the strategy I’ve used over the last 10 years or so.”
And it’s the only strategy that works anymore. The market since 1997 has changed forever. It’s just funny that people will say how great buying with dollar cost averaging is, but those same people say to “buy and hold”. All they have to do is multiply by -1 and they will see it works both ways.
The buy and holders will find themselves at S&P 1350 in another decade. Now, we may have gone to 2000 and 500 five times in between though….
“Stocks are too volatile to measure them on a month-to-month basis. They might be up 15% from now in another month.”
And contrary to that. Who knows home prices aren’t down 10-15% since yesterday.
“Who knows home prices aren’t down 10-15% since yesterday.”
Me.
““Who knows home prices aren’t down 10-15% since yesterday.”
-Me.’
15-20 then? 🙂
I like your advice, Chuk. Thanks.
“15-20 then?”
Hopefully. I’m walking away from my short sale I’m trying to buy. Been going on 6 months now. 2nd lien holder has taken over 2 months to decide if they want to take 2k on the 20k they are owed.
Well, tough shit, now they get $0 in a foreclosure. Back to the drawing board…
Did anybody have anything to say about this property?
“Most anything I buy that’s made in usa (not much, really) is still better than the non-US substitute.”
The one thing I found about America, that it does better than anyone anywhere else, is respond to customer needs in product development and quality.
Truthfully in an equal cost structure environment, it’s my belief, no one can compete vs the USA.
“Truthfully in an equal cost structure environment”
I don’t think we’ll ever know.
example… stupid simple thing…saran wrap here, not purchasable in a box that has the little serrated edge. How hard is it to give the consumer that. Here, like much of the world, it’s… buy what they make for you and shut up.
I like chuck. Rather than be a hostage to a 2nd lien holder bank he’s willing to call their bluff & walk. Kudos to knowing who holds the stronger hand chuck & not becoming emotionally attached to a particular property.
“he’s willing to call their bluff & walk.”
I’m not even sure if they are bluffing. I don’t rule out gross incompetence.
“trib article map from this morning but”
Thanks for the link info, HD.
“The one thing I found about America, that it does better than anyone anywhere else, is respond to customer needs in product development and quality.”
What are the barriers where you are?
“I like your advice, Chuk. Thanks.”
Dan #2, something else that I have found that works well, is that I rarely “sell” outright. When the market moves to a certain point where I would like to take money off the table, I will often sell calls against my position. So if I own AAPL at 350 and want to sell some, I might sell some 350 calls for around $10 instead. That way I still get another $10 out of the stock, even if it goes to 400. And if it goes down, I have $10 protection. In the aggregate I have found this to be much more rewarding than just selling outright.
At a granular level recognizing the losses could be influenced by personnel moves. As in they are hidden until someone gets promoted/etc. With the bank bailouts there really is no incentive alignment to run their business properly for shareholders. Enraging actually.
“At a granular level recognizing the losses could be influenced by personnel moves. As in they are hidden until someone gets promoted/etc. With the bank bailouts there really is no incentive alignment to run their business properly for shareholders. Enraging actually”
They stopped caring about shareholders a long time ago. All about the bonus. Right now, the bonus structure would appear to be more fubar than it was five years ago, when it was set up to drive us off the cliff.
“What are the barriers where you are?”
I don’t find it just here. I find it many places. I remember reading a book about the same issue in Croatia. I can walk into a store, purchase something, not move from the register, ask to return it. Will never happen! Knowing the cost of obtaining the customer is a uniquely first world thing.
Maybe if I had to guess, most people here don’t seem very connected in the -I am who my job makes me attitude – so you get less concern for the quality of your work. But now I’m just throwing shit against the wall. Short of Sao Paulo, no one really wants to work here. Amazingly July had record imports and exports with a positive balance, just refuses to slow up here. Next month can’t be good though.
“They stopped caring about shareholders a long time ago. All about the bonus. Right now, the bonus structure would appear to be more fubar than it was five years ago, when it was set up to drive us off the cliff.”
Which is why I find it funny to complain about giving officers cray # of stock options. without those things the shareholder wouldn’t ever be represented in the room.
Well most commercial banks aren’t big on bonuses for the bottom 98% of employees so probably tied to personnel moves is my suspicion. Who cares about tomorrow for the shareholders.
chuk, what tells you when to turn from dollar cost buyer to dollar cost seller. or vice versa?
$370K in 2007!!! I wouldn’t pay more than 100K for anything in that area!
does any of it matter when CPS is cutting everything yet wants to max their tax portion?
run from cook county and run fast!
chuk do you sell puts when you want to buy?
So who wants to comment about this property? Is Uptown going to “redevelop” now that Miss Schiller is out?
“Sonies on August 8th, 2011 at 10:15 am
chuk do you sell puts when you want to buy?”
Yes, I will sometimes sell covered puts instead of covering my short (buying). But what I have seen is that the down moves can be much quicker, and selling puts isn’t as advantageous. By the time the put has expired, the market has probably gone down 20% and back up.
“most “made in US” items are low quality junk”
mainly becasue they use Chinese raw materials.
but really i have rarely run into US made junk. when i do find a US made product its actually of high quality and detail because the few new who MFG now have such low overhead that they can compete. its the long time MFG’s that cant compete that cut corners now.
I work for a MFG company and can say its Very High Quality the leaves our dock, even if some of the raw material is from china.
we even had a few customers try to leave us for chinese products, and after a year when they found they need to replace it, compared to ours they came crawling back and now we charge them full price. by Q4 2012 we will have made back the lost busine$$ that year they were away.
US is still about quality products, its the consumer who would rather buy twice than pay once up front.
“chuk, what tells you when to turn from dollar cost buyer to dollar cost seller. or vice versa?”
Variety of things. VIX for one. VIX isn’t great for precise timing, but it is pretty great for major tops and major bottoms. VIX above 40? Buy with both hands. You might lose 25% more right away, but in the end, you’ll do ok. Also, it’s not just one direction till you hit the “top” or “bottom”. And no offense to Sabrina, but one of the best tools are contrarian indicators. Whether its people I know in real life, or people on YHOO message boards. When people call market “bottoms” when it is up 100%+, it is telling.
Much of my trading is in SPY. So if we pick some starting point (say 100), I will start buying there, and buy all the way down. Then, on the way back up, I will start selling calls on a portion of my position as we head back towards 100. And then I keep selling more every 10 points. At some point, I run out of stock, but then I continue to “sell” anyway (short). Now the process starts again in reverse. As market goes higher and higher, I short more and more. Then as market comes back down, I start covering my shorts in the same fashion. When I have covered all my shorts, I keep buying.
So it is a constant flow of buying and selling. It’s usually not so extreme where I am 100% (or 150%) long like at 666 or where I am completely short. And again, I didn’t time the market and buy at 666. But since I had been buying all the way down from 900, I was very long at 666. 2 different things. Same deal at 1350.
In general, I don’t do very much “timing”, but I know when the market is down 50%, I want to be a net buyer. When it is up 100% I want to be a net seller. Much of the stuff in between is just selling calls that expire worthless, and act as an income generator while the market churns.
well I gotta ask.. Is there a stop anywhere? if it just keeps running 1 time, won’t you just get carted out?
I know you use SPX, but selling gold would be a perfect example.
“I know you use SPX, but selling gold would be a perfect example.”
And that’s why I use SPX. Note, this does not work on individual stocks either (see PCLN, AMZN, etc.). You will get margined out.
Wow – it seems as though nobody has money anymore and NOTHING is selling….oh wait, I forgot – this is “deal chatter” where we only talk about one end of the market and cherry pick specific properties that are selling at or below 2004 levels!!! OK – now back to the real world….. Here is one under contract to add balance:
http://www.redfin.com/IL/Oak-Brook/1902-Midwest-Club-Pkwy-60523/home/18083549
So Clio,
This is the best cherry you can pick.
-We don’t know what it closed at
-Been on the market for 1469 days
-Orginally listed at 4.799 million
-Built in 2004
I am sure the orginal owner is going to make money hand of fist on this one……. very nice cherry indeed.
chuck its very hard to do what you are saying, although not impossible. Most folks dont’ want to bother with it. It is very hard to consistently use contrarian indicators to make money in the long term because one event where you’re stuck in a bad trade (like 1999, 2008) can wipe you out, and since not everyone is blessed with foresight its hard to see just how far things will go towards the insane spectrum
“Which is why I find it funny to complain about giving officers cray # of stock options. without those things the shareholder wouldn’t ever be represented in the room.”
Horizon matching is THE issue there. If a big enough pop in Time X makes it so the top ten can all leave with 9 digits, then they may be unconcerned with the Time X + 10 year health of the company. And if it doesn’t work out, they bail before things fall apart and leave a steaming pile for the share holders. Lot of similarity to US politics over the past 50 years, really.
“If a big enough pop in Time X makes it so the top ten can all leave with 9 digits”
I don’t personally believe most companies exist in a world where the opportunity for 9 digit pop in time X exists. I think most are the world of grind and grow. But yes, if the conflict you present exists. There will most certainly be little conflict between those involved as to what to do.
Make lemonade while you can chuck–greece just banned short selling probably a matter of time before that tactic spreads.
“I might sell some 350 calls for around $10 instead. That way I still get another $10 out of the stock, even if it goes to 400.”
aren’t you out $40? (50-10)?
Vix is almost at 40, it’s tempting to try your theory that one should buy.
I saw what anon hinted to firsthand early in my career. The GMs & VPs got rewarded. handsome cash bonuses & the company paid the SEC seettlement fee some years later.
“Make lemonade while you can chuck–greece just banned short selling probably a matter of time before that tactic spreads.”
1) Dumbest thing they could ever do. Has the opposite effect.
2) There are other ways to bet against the market.
3) My bets are already placed, I will probably start buying again somewhere between 1050 and 1100.
“I don’t personally believe most companies exist in a world where the opportunity for 9 digit pop in time X exists.”
Of course most don’t. But all it takes is one example and greedy execs who think they’re the ones to repeat it to make a hash of a nice steady growth company.
“aren’t you out $40? (50-10)?”
No, you sold the right to someone to buy the stock from you at 350. And they paid you $10 for that right. So, if AAPL closes at 349.99 then you pocket his $10. Anything above that, and you have to sell him your stock at $350, even if its at $400. But you still keep his $10.
“Vix is almost at 40, it’s tempting to try your theory that one should buy.”
It is a terrible short term signal, but great longer term. in 2008 vix hit 40, and we went down another 25%. But then of course we rocketed back up over that point within a year.
And MOST importantly, do not buy (or sell) your entire position all at once. Leaves no room for error. I set up rough estimates of where I plan to buy in advance (10% at 1100, 20% at 1000, etc). Rarely do I get to 100% of my goal, but in some cases, it even exceeds it (I switched to leveraged ETF’s (SSO) at S&P 666, so while I wasn’t on margin, I had leveraged returns).
“and you have to sell him your stock at $350, even if its at $400. But you still keep his $10.”
that means you lost $40 b/c you had to sell at $350 instead of selling at $400, right?
“that means you lost $40 b/c you had to sell at $350 instead of selling at $400, right?”
No, it means he profited $10 more than he would have if he’d sold 10% outright at 350.
“that means you lost $40 b/c you had to sell at $350 instead of selling at $400, right?”
Well, define “lost”. You gained $10 instead of $50. You still owned the stock. Right before expiration, the call you sold for $10 is now worth $50, and your stock is worth $400. So you lost 40 on the call and made 50 on the stock. Net gain of $10.
“Of course most don’t. But all it takes is one example and greedy execs who think they’re the ones to repeat it to make a hash of a nice steady growth company.”
You already know I agree with you. I was just earlier stating that it may be the *only* thing to keep them having common interest.
“No, it means he profited $10 more than he would have if he’d sold 10% outright at 350.”
Or you can look at it as the fact that he gave up the right to sell the actual stock above 350, so if it retraces to 200 he will be kicking himself in the ass for having been handcuffed and not being able to sell that stock when it was near or above 350.
You ain’t gettin somethin for nothin!!
“Or you can look at it as the fact that he gave up the right to sell the actual stock above 350, so if it retraces to 200 he will be kicking himself in the ass for having been handcuffed and not being able to sell that stock when it was near or above 350.”
Right, there are always extreme examples, but I have found that over the years, in aggregate, I have been better off selling calls and collecting the premium than if I had sold the position directly. And again, this is why I do it with SPX and not with AAPL, etc.
I have also been able to sell the SAME strike (different month) more than a few times before finally getting called. All of that juices up your return.
“No, it means he profited $10 more than he would have if he’d sold 10% outright at 350.”
Wrong, it means he gained $10, but didn’t profit the extra $40 if he’d sold outright at $400.
in reality it is probably more that it is easier for you to add up all the wins, whereas it is very hard to add up the intangible opportunity costs such as the example i gave or marcus pointing out that being called at 350 forces you to forgo the settlement 400 price. You see that as a 10 dollar gain, wheras you also gave up 40 in opportunity, had you just done nothing.
Wait a sec, so he sold something for $10, but then had to pay out $50, that equals a $40 loss, meanwhile the stock went up $50, so he gained $10 overall. But had he done nothing, he would’ve gained $50, not just $10, therefore selling the call cost him $40. Right?
“in reality it is probably more that it is easier for you to add up all the wins, whereas it is very hard to add up the intangible opportunity costs such as the example i gave or marcus pointing out that being called at 350 forces you to ”
No, it is very easy to compare. I can just compare to the return of the S&P 500. My way has trounced it over the years. Do I have the MAXIMUM gain possible? No, not even close. But my goal is to beat the market.
“Wrong, it means he gained $10, but didn’t profit the extra $40 if he’d sold outright at $400.”
Forgone profit =/= loss.
Look at just the transaction, and the strategy. He was going to “sell” at $350 as part of a strategy of moving shorter as the asset rises. If one gets tied up in the (mistaken) view that a forgone profit is the same as a loss, one will lose fortitude on strategy execution, with all the knock-on effects.
Again, it is very easy to measure. What you are saying is something completely different. No one knows the future. How do I know if AAPL is going to 400? The question is between 2 different options
1) Sell AAPL outright at 350
2) Sell covered call at 350
In neither case is there any plan to hold to 400.
My point is, selling via a covered call has been more profitable than selling outright. Not that it means I won’t miss out on a move up.
“therefore selling the call cost him $40. Right?”
Depends on how you define “cost”.
“Not that it means I won’t miss out on a move up.”
Or worse.. a move back down.
You are confusing your intended actions with the derivation of valuation.
“Or worse.. a move back down.”
Right. But I have already addressed that. It is easily measurable in total. For every time it backfires and moves against me, there are 10 times that it doesn’t. In the end, the sum of those 10 times is greater than the 1 time. Which is why the smart money is in SELLING options, and not buying them.
funny to hear people talking about my forte on a chicago r.e. blog…
good that there are others getting the message out how wonderful the strategy is
“Right. But I have already addressed that. It is easily measurable in total. For every time it backfires and moves against me, there are 10 times that it doesn’t. In the end, the sum of those 10 times is greater than the 1 time. Which is why the smart money is in SELLING options, and not buying them.”
So all options are overpriced, and anyone that buys them are fools?
you’ll lose about 90% of the time on a long options trade… trust me its the easiest way to lose money
now using say a married put strategy is a good way to protect against downside but it still severly erodes into returns
ze, Brazil no till that long ago was one of the poorest countries in the world, not sure using Brazilian products constitute a proper comp for claiming US product are good. I recently bought a lot of US made baby products and all of them suck. I rather buy European or japanese stuff any day. Even some of the made in china make much more sense as at least they are cheap.
Also the American brands have lost their quality. I would never buy any house hold item that is US made, think hair dryer, pressure cooker, vacuum cleaner,…
Same goes for clothing, shampoos, soaps, make up, perfumes,…
That’s because we’re in a fucking ranged market & have been for the past 15 years where the majority of America’s economic growth came from bubbles moving to different asset classes.
“My point is, selling via a covered call has been more profitable than selling outright”
I see, so there really isn’t any true downside, other than opportunity cost? that being missing out on upside, and not being able to plow that $350 into some other investment?
“So all options are overpriced, and anyone that buys them are fools?”
Kinda like lottery tickets.
They are more comparable to insurance. Are people fools for buying insurance? No. But the person selling you that insurance is making a lot more off of you than you will likely ever get paid out.
Also, they have other uses as hedges. Let’s say you have a huge short position, but you don’t want to cover it for fear of not being able to get the loan again, dealing with the transaction, etc. Buying calls is an easy way to get leverage to hedge your position without tying up tons of capital. Is it the most efficient way? No, but it has its uses.
Only active traders & money managers/investment advisors make $ in us markets anymore. Buy & hold is dead & for suckers.
“Right. But I have already addressed that. It is easily measurable in total. For every time it backfires and moves against me, there are 10 times that it doesn’t. In the end, the sum of those 10 times is greater than the 1 time. Which is why the smart money is in SELLING options, and not buying them.”
How does it backfire? If it goes to $400, he still gets the $10, if the stock goes to $200, the option expires worthless and he doesn’t lose. Sounds good to me, how about I sell some covered GLD options right now? lock me in some free money?
chuk, what do you think?
“That’s because we’re in a fucking ranged market & have been for the past 15 years where the majority of America’s economic growth came from bubbles moving to different asset classes.”
And I suspect it will remain that way for the foreseeable future. The trick is to figure out what that next asset class is that everyone is going to rotate into. Gold? Dollar? Housing Bubble II?
“US is still about quality products, its the consumer who would rather buy twice than pay once up front.”
This description fits German, Swiss, etc but not American products I have tried.
Have you seen the quality of American brands for say voltage meters, drills, …in Home Depot? All are pretty much junk.
Currently Swiss francs & gold it seems. Maybe ammo & powdered milk next??
I thought this was Crib Chatter, not “me vs. you”?
“Buy & hold is dead & for suckers.”
not according to Louise Yamada. Gold, Silver, and the CCI are in long term secular bulls. Only the CCI, South Korean stocks, and Mexican stocks (and Gold, Silver) are above their 2007 highs, with S. Korea and Mexico stocks stalled now. Every other market has stalled and rolled over, and couldn’t get past 2007 highs, so they’re doomed now, with 2000 & 2007 representing a double top in the S&P, etc.
Therefore everything is in secular bear, with the recent cyclical bull (QE induced) now over, so now we see a cyclical bear trend in a secular bear market….ouch. CCI, gold & silver are buy & hold, still.
” If it goes to $400, he still gets the $10, if the stock goes to $200, the option expires worthless and he doesn’t lose.”
But I still own the stock at $200, so I “lost” on the extra $150 I could have gotten for the stock if I sold outright at $350. But like I said, the times that it works far outweighs the times that it doesn’t.
“chuk, what do you think?”
I think the problem is, you have to be really committed to the strategy. Any one trade can be a big winner or loser. The only way this works over the long haul is to keep doing it. I have sold thousands of options. Your first covered call could result in a 50% loss in GLD while you collected 5% in premium. Now, that will really sour you to the idea.
Also, starting this strategy in a volatile market can be tricky.
thanks chuk, I see.
“They are more comparable to insurance. Are people fools for buying insurance? No. But the person selling you that insurance is making a lot more off of you than you will likely ever get paid out.”
So home/auto/life etc. are abnormally long-run profitable products for insurers?
Abnormally? No. But they are more profitable for the insurer than they are for the insured.
“No. But the person selling you that insurance is making a lot more off of you than you will likely ever get paid out.””
Arghhh!!!! The person selling it to you does not know if you are going to be a buyer or seller at moment of execution. This he does not know if HE is going to be a buyer or seller. SO he basis his market around both sides of expected value. He is a frakin bookie, takin his vig, and you might not see the vig, but buyer or seller you enter the game at a disadvantage. EQUAL DISADVANTAGE!!!!
“Have you seen the quality of American brands for say voltage meters, drills, …in Home Depot? All are pretty much junk.”
You are aware that a TON of the US Brand stuff at Home Depot (and elsewhere) is made in China, right? The tools that are still made in USA are still good stuff.
And where can you find a made in USA vacuum cleaner (ok, kirby, but that’s not your example of crap) or hair dryer or pressure cooker (yeah, the canning specific ones, but again, not your reference point)?
And, on HBAs, that veers into the personal preference realm, where “quality” is much more subjective.
“Your first covered call could result in a 50% loss in GLD while you collected 5% in premium.”
So, you limit all of your upside, and you’re open to downside loss at the same time, for guaranteed premium, say 5%, that’s really what this plan is?
DZ.. with rare exception there is practically no volatility around insurance outcomes (if there is, and it’s too big – no longer the insurance companies problem) . You are selling something above value to which you already have a great idea of the outcome. It’s actuarial. Rainy, foggy day,= – there will be X accidents.
“He is a frakin bookie, takin his vig, and you might not see the vig, but buyer or seller you enter the game at a disadvantage. EQUAL DISADVANTAGE!!!!”
Are you saying the bookie has the same disadvantage as the gambler betting with the bookie? Not even close to true.
“You are selling something above value to which you already have a great idea of the outcome. It’s actuarial. Rainy, foggy day,= – there will be X accidents.”
Understood, I was trying to make a point but have lost interest.
“So, you limit all of your upside, and you’re open to downside loss at the same time, for guaranteed premium, say 5%, that’s really what this plan is?”
No. This is only if you were planning on selling GLD anyway. If you sold it, you would eliminate all upside too.
Do you think GLD is going to fall 50%? If so, sell it all right now.
anon, in my second post I mentioned the word “brand”, not us-made so all say junk sold under the “black and decker” brand fits the bill.
chuk: if one thinks it will fall, it’s better to sell outirght. If one thinks it’s going to rise, it’s better not to limit oneself, so I can’t understand why and when you’d sell a covered call. I’m back to square one!
“And where can you find a made in USA vacuum cleaner (ok, kirby, but that’s not your example of crap)”
I don’t know where it’s made but I will say that the Dyson exceeds all expectations. That will be my contribution to this wildly off topic (albeit at times informative) thread.
“if one thinks it will fall, it’s better to sell outirght. If one thinks it’s going to rise, it’s better not to limit oneself,”
Sometimes one is not sure, and just wants some cushion in the short term. Sometimes one thinks it could pull back a little, but not crash. Sometimes one doesn’t want to realize the capital gain, so they sell a call to protect some downside.
If you think AAPL is going to 500 long term, but you think it could pull back in the short term, you have a few options
1) Do nothing, after all, its going to 500!
2) Sell it outright, and hope you can buy it back lower before it goes to 500.
3) Sell a call. Collect some premium. If you’re lucky, AAPL doesn’t go anywhere, and you pocket the $10. If AAPL goes to $330, well, losing $10 is better than losing $20. If it goes up, oh well, better than a sharp stick in the eye.
There are lots of pros and cons of covered calls. I have found that using them as a method of selling my positions has worked out. Your mileage may vary.
“anon, in my second post I mentioned the word “brand”, not us-made so all say junk sold under the “black and decker” brand fits the bill.”
And lots of non-US brands have all sorts of made in China crap, too, but they don’t bother importing that crap into the US.
If your point is that (1) marketing companies selling made in china crap sell made in china crap, whatever the brand name on it may be, and (2) too many once proud US manufacturers are now mainly in the biz of #1, I doubt that anyone here would argue. Pretty much “sky is blue, water is wet”.
what i’m saying is..
Expected value is 2.40
market is 2.30 @ 2.50
he doesnt care! +.10 either way for him. -10 to start, for you.
“And where can you find a made in USA vacuum cleaner (ok, kirby, but that’s not your example of crap)”
How’s this? (I trust you will not hassle me about made v assembled, as how many things are 100 percent made in USA.)
http://www.oreck.com/Oreck-Gold-Upright-Vacuum-Cleaner-Forever-Series
“I don’t know where it’s made but I will say that the Dyson exceeds all expectations. That will be my contribution to this wildly off topic (albeit at times informative) thread.”
I’m predicting your next vacuum will be a Miele.
central vac system.. the way to go.
don’t sell calls on stuff you aren’t comfortable selling
lol.. Sonies – careful.. you are givin up your ancient Chinese secret.
Now back to work on my time machine. I need you to review Billy Beer.
haha mail me a 6 pack and i’ll review any beer you want 🙂
too busy lately… damn houseguests all the time in the summer!
This sure does seem nice for $229k. I can’t imagine $370k though!
I also notice Clio hasn’t responded to Valasko….
“I’m predicting your next vacuum will be a Miele.”
Mine is already and I am loving it.
@ anon, my point is I don’t have to research where Miele’s components are made. They are a great company. Most US brands which used to be quality stuff 20-30 years ago are now garbage.
“@ anon, my point is I don’t have to research where Miele’s components are made. They are a great company. Most US brands which used to be quality stuff 20-30 years ago are now garbage”
Miu, you’re using “us made” (yes, i went back and read each of your comments in the thread) in a way that is different from how it is commonly used. US made means at least assembled here, where a US Trademark name doesnt mean shi … much.
I see. My bad for using wrong terminology but you know what I mean now, right?
Anon always knew what you meant:
“sky is blue, water is wet”.
Sigh. This to me is one of the more interesting properties that has been posted on this site in months and yet everyone is ignoring it. (Despite what I read as pleas from a few readers for some actual opinions) What’s the deal?
This does not look like an apartment-quality condo to me. It has everything one could want in a 2BR unit — good-sized rooms, generous living/dining area, pkg, laundry, central A/C, spacious newer kitchen, top floor, sunny deck, fireplace, etc. Other 2BR condos don’t get written off as being no more than temporary residents for couples who will have kids and want to move, so why should this place be different?
Those who write off the location can only sheep who think only 3% of Chicago is inhabitable. Think about it: this place is close to the redline and LSD, on a quiet street, one block from Castlewood Terrace (a beautiful historic street filled with multi-million-dollar homes), 1 BLOCK FROM THE LAKEFRONT, close to all the awesome noodle shops on Argyle, and a stone’s throw from Andersonville, which is a more hip/diverse/interesting neighborhood than Lincoln Park, IMO. I live near here and it’s a perfectly pleasant place to be — not at all crime-infested or whatever people on this ste seem to think of Uptown. At $229, this place would require only a modest downpayment and monthly payments that easily beat rent for comparable unit. If I were in the market for a 2BR condo, I would seriously consider this.
People on CC would spend all day chatting about this place if it were 12 blocks further south. Can someone explain to me why that is?
“My bad for using wrong terminology but you know what I mean now”
Yep, got it. I was legitmately curious what you were refering to, as there really arent that many consumer products (excluding grocery, broadly speaking and cars) that are actually made in usa, and most people in the us who actually care about the country of origin understand (often thru direct experience of family/friends losing factory jobs) that most USA companies market at least some products that were made entirely somewhere else, and that you have to check the label.
Only thing we just *won’t* buy is candy manufactured in China, in case cadmium or lead was cheaper than food coloring that day.
“Only thing we just *won’t* buy is candy manufactured in China, in case cadmium or lead was cheaper than food coloring that day.”
zing!!!
once we made a strong effort to buy only “made in US” that was more labor intensive than the whole BPA thing wife made us go through.
we still make an effort to search American made first, but dont go the extra mile to make it happen. really we dont even go the extra block to make it happen 🙂
i will brag that my company produces US made quality products and i am very proud of that fact.
do you work for playboy groove? bc some of those centerfolds are foreigners.
Well I buy most my baby stuff from European brands, I trust their government’s supervision and standards much more. There are ton of substances that are banned in Japan and Europe that are still available here.
“Well I buy most my baby stuff from European brands, I trust their government’s supervision and standards much more”
well unless its the dutch.
anywhooo, many EU standards are way too nanny and that extra nannying shows in its price.
nannying by the time your kid gets to one will have the US law as kids up to the age of 5 will have to be in a rear facing car seat, have fun with that!!! (in sweeeeeeden they already have that law)
Does the rear face thing piss them off? That would suck if it is the case.
Everything sucks about Sweden except the women. Yeah its a big exception but Volvo’s, IKEA, low alcohol beers, tundra weather, 55% marginal taxes, nanny state BS. Almost makes chasing Swedish amazonians in their home country not worth it.
“Almost makes chasing Swedish amazonians in their home country not worth it.”
Try next years Miss Iceland contest. Flat tax too. There’s your win-win!
There’s only 250k people on that island. I’m afraid my reputation would spread far too quick. DBs like me need a wide berth =)
“Try next years Miss Iceland contest. Flat tax too. There’s your win-win!”
and now my day is complete. first top popped today is in your honor my friend
Although this thread was highjacked somewhere along the line by comments re: Oak Brook and vacuum cleaners – I just wanted to add that this nice apt. in this tranquil neighborhood was sold yesterday in auction.
So what did it sell for then?