In The Event of War, Where Should One Invest Money?

[Bible_Belt]

The only thing that makes shorting riskier in theory is that there is the chance that the company you short could come out with the cure for cancer overnight, and the share price jump to a gazillion dollars. CNBC stokes peoples' ignorance by also implying that short sellers are evil and un-american. That's ridiculous. A long position is a buy and then later a sell. A short position is the same two transactions, just in reverse order. Markets prosper on liquidity and volume, and any participation in the securities markets is as American as apple pie, at least in my own opinion.

Some more info about shorting - a short is a sell and then a buy to cover. You must borrow the shares from someone with a long position in order to sell what you don't have, which is arranged by your broker/dealer. Every morning, a b/d publishes a "short list." Those are the stocks in which the b/d has shares held in a margin account in street name....once again in a long position. Someone has to buy the stock before someone else can short it. But if that doesn't happen, the stock is not on the short list, so you can't short it. As you might guess, when a stock is really taking a beating, it will fall off the short list, because no one wants to be long in it any more, or at least not enough buyers to keep up with the short sellers.

 

[synergy1]

I want to echo Bible's thoughts on short selling - there are risks that are not inherit in going "long" on a stock. Shorting poses risks such as unlimited losses ( unless using put options where the maximum risk is the premium paid for the option). Companies can remain stubborn with piss poor fundamentals and continue to go higher and higher. Enron, Tesla, AOL, Crazy Eddie, sunbeam...the list goes on. Furthermore as a short seller, you are responsible for dividends a stock receives. For example if you wanted to short the high yield bond market etf ( ticker JNK) , you would be responsible for the 5% ( or so) annual dividend. Also, you are charged interest if you short on margin, so you can lose money even if you are correct on the overall direction of the stock price.

Shorts require the timing to be better. If you go long, you can buy and sit on the stock through thick and thin if you are not using margin. If you are short, you might have to cover if your account has any margin calls - look up short squeezes. I read a good example of a management induced short squeeze by Allied capital where management issued a rights offering driving up share demand and hoping for a short squeeze. Another good example was seadrill, an offshore drilling business, that jumped by 100% in one day when a major shareholder hinted at a possible cash injection ( the company was nearly insolvent and breaching covenants). The more shorted a company is, the more the price might move in a squeeze as many shorts have to cover.

My advice to most, just keep a larger cash position if you fear a crash. Its one of the few asset classes that doesn't correlate to any investment vehicle during a crash. even golf ETFs crashed after 2008 because of margin calls ( it did well after obviously).

 

[logicallefty]

Companies can remain stubborn with piss poor fundamentals and continue to go higher and higher. .

This is darn true right here. For the record I am still what one might call a "greenhorn" with the stock market. However, over the past couple years I have studied it a lot and learned a lot. Lately I've been doing some day trading, which is buy and sell either in the same day or within a few days. One thing I can tell you that I have learned first hand, and that other more veteran day traders I have talked to have agreed with, is that the market has been doing some funny stuff lately. Many logical fundamentals have been thrown down the sewer lately. For example, companies reporting great earnings and then their stock tanks. To the point where the only safe bet can be to play the price action. Which means if a company has bad earnings but its stock goes UP, who cares, play it. Get in. Bank. Get out.

 

[Bible_Belt]

the only safe bet can be to play the price action.

That was my philosophy as a trader. The market is never wrong, at least that's the idea. Trying to answer the question of why is a waste of time. You're usually not going to know the real reason a stock is moving, nor even be able to know.

Furthermore, stocks move before news. It's not supposed to be that way, but it is. I have had both the most expensive stock price data feeds and the most expensive news terminals side by side. The stock always moves before the news. The news is the past, even when it first breaks. The present is the stock price.

 

[sosousage]

what if there will be zombie apocalipse after nuclear bomb?

 

[PhilipS]

Only one thng......GOLD

 

[synergy1]

Only one thng......GOLD

Gold works well in an inflationary or hyperinflationary currency. Its not an investment, its a currency unit. Its like saying you'll invest in US dollars as an investment. US dollars are good to hold in deflationary regimes, gold is not. But since wartime might see monetary expansion via money printing, gold would probably do well in said inflationary environment, assuming money printing causes said inflation. Gold is really a hedge agianst faith in a currency.

Borrow in Yen to buy gold/ useful assets. (or whatever currency is going to inflate).

 

[synergy1]

This is darn true right here. For the record I am still what one might call a "greenhorn" with the stock market. However, over the past couple years I have studied it a lot and learned a lot. Lately I've been doing some day trading, which is buy and sell either in the same day or within a few days. One thing I can tell you that I have learned first hand, and that other more veteran day traders I have talked to have agreed with, is that the market has been doing some funny stuff lately. Many logical fundamentals have been thrown down the sewer lately. For example, companies reporting great earnings and then their stock tanks. To the point where the only safe bet can be to play the price action. Which means if a company has bad earnings but its stock goes UP, who cares, play it. Get in. Bank. Get out.

Right. There are a lot of algorithm traders and computers entering and exiting positions bases on a slew of factors outside our purview. Volume, trend, momentum, sentiment...it could be anything. I don't day trade so I don't understand the specifics. From what I can tell its about looking at short term signals or patterns in price/volume of a stock price and acting based on what is likely to happen next. I know chartists use a ton of indicators like AD lines, oscillators, Moving averages etc. To be I use the aggregate of moving averages and volumes to determine sentiment of a stock but on a longer scale ( I look at weekly charts). For example if at a bottom/base, if volume declines on down days it s showing me that there are less people who want to sell the stock at lower prices so its an indication.

I prefer to hold for a while but my long term investments have been so so. I invested in the oil space as deflationary pressure was crushing commodity prices - gold, copper , oil and nat gas all saw their dollar values decline. In the long term I think this will be a solid trade, but short term it was not.

 

[Bible_Belt]

Those computer trading programs are what killed intra-day trading. Holding overnight and longer positions is the only way I see that makes sense right now. It was great to be able to go home flat every night back in the day trading heyday, but those days are long gone and never coming back.

About indicators, almost all of them have price as part of the equation, and if so that, by definition, makes them lagging indicators, not leading. People think the fancy chart tells the future, but macd, stochastics, MA's, oscillators....they are all just ways of looking at past price action. A simple bar or candlestick chart with volume at the bottom will tell you all the same information. The only leading indicators I know of are Fibonacci retracements, Gann lines, and Eliot Waves, All of them are of course highly subjective in their interpretation. I like Fibs the best. Moves tend to retrace in 1/3, 1/2, and 2/3 increments.

 

[logicallefty]

I have been using a combo of volume and RSI to do some day trading. At night I scan for high volume + an RSI climbing towards the overbought threshold of 70+, maybe 50s-60s or even 70s. Then camp out on the stock in pre market in the morning and watch for increases in pre market. Once the market opens, most of these stocks dip down at some point after shooting up in pre market. Sometimes right after market open, and sometimes later in the morning. As soon as I see bid/ask shift towards an upward trend, I buy right there on the dip. I normally only ride it up 10-20 cents and then sell, unless it's really going nuts and shooting past that. If it starts to go down even 5-6 cents from where I bought, I sell quickly. Has this gotten me rich? Not at all. But it's something I have been able to repeat comfortably. For several months this year I was not making any money but taking only small losses on each trade doing this. The past couple weeks I have made some money. Managing losses is nearly just as important as making money. Because if you can repeat the same trades and generally have your losses (5-6 cents/share) lower than your gains (10-20 cents/share), you are eventually going to profit at least something so long as you don't have 100% of your trades as losses.

 

[Bible_Belt]

IOnce the market opens, most of these stocks dip down at some point after shooting up in pre market.

Yes, consensus advice is to always fade the gap. It works especially well with the NYSE, at least when I was trading. On good news, the specialist will be holding a lot of "buy at open at market price" orders. If he can't find sellers, he has to sell out of his own inventory, and specialists are not in this business to lose money. So he just opens the stock at a high price to fill all those market orders, then when the stock inevitably dips, he buys it back at a lower price for his own profit. Being a specialist is a license to print money. If you can find one who #1 does not hate day traders (lots of them do so they screw you on your fill price to make you go away), and #2 has a personality that you can predict, that's the best way I have seen guys make money day trading NYSE stocks.

 

[Physicist.]

Go to switzerland. They have enough nuclear bunkers in the country to save their entire population from nuclear warheads which is INSANE

 

[Bible_Belt]

There are fields of bunkers near me, built in the early 1950's. Then the government sold the land to an ammunition company, which is now owned by General Dynamics. The bunkers are on land that is closed off to the public. Most people don't know that they are there. I used to sneak around them when I was a kid. I'm only about ten minutes away now, but I would not even try to get there to save myself. The bunkers are used for storage now, and a lot of them have explosives and ammunition that has been sitting untouched for fifty years. Even General Dynamics people are scared to open them up for fear of explosion.

So my government, in its infinite wisdom, has made it happen that our bomb shelters are not only hidden from the citizens, they are also full of more bombs. Brilliant!

 

[switch7]

For those guys interested in trading perhaps it would be a good idea to start a trading thread for intraday and swing trades. I usually take about 3 positions a week, mostly forex, and 100% price action. (with a little fundamentals)

 

[CarlosR]

It's excellent idea

 

[logicallefty]

For those guys interested in trading perhaps it would be a good idea to start a trading thread for intraday and swing trades. I usually take about 3 positions a week, mostly forex, and 100% price action. (with a little fundamentals)

I would participate in this starting in a few weeks. I've taken a break from trading but when I resume I will also be taking about three positions a week. Day or sometimes swing, on crap penny stocks $1-3 range.

 

[AAAgent]

This is a serious question. I'm becoming concerned about the rising tensions and the outbreaks of violence that have been happening. If any kind of a war breaks out, the economy is going to tank.

I was thinking gold would be a safe bet, but I'm wondering if there's anything else that's worthwhile?

Start buying some Bitcoin.


I'm a "former" precious metals investors which some of you know. I've held physical gold and silver for years and also owned paper etf assets. I've always worked in the financial markets. If you want to learn the movements of metals, you need to learn global economics, politics, geo politics, and even crazy things such as weather and earth quakes. The issue is, the no matter how much you study these markets, they're rigged and manipulated. Too many people know and understand this now. Central banking policies are rigged, earnings are rigged, forex markets are rigged.

https://www.cnbc.com/2014/03/11/forex-manipulation-how-it-worked.html

https://seekingalpha.com/article/4107734-wrong-silver-manipulated

You'd think regulation and the authorities would be jailing people that are rigging markets that affect trillions of dollars and cost people to lose money, while the bankers win. No. No ones goes to jail and they get measly fines and do it all over again.

There's a paradigm shift happening as we speak. If you've seen some of my posts about cryptocurrencies, that is the paradigm shift. An un-manipulable currency run by no government or company and with no employees or army. It's completely decentralized and it's power is the same as the internet. You want to shut it down, laws won't work. They're only enforceable in your own respective country and even at that point how do you enforce laws on an idea? I'm talking about Bitcoin in particular and as a larger part cryptocurrencies. If you want to shut down Bitcoin, laws will not work. Even if the entire planet came together to approve laws banning the use of Bitcoin, in order to enforce it, they would have to go to house to house in order to shut down all the individual miners that make up the Bitcoin infrastructure network. As long as one miner is online, the network will run (albeit slow and congested).

The blockchain also known as a decentralized ledger is what Bitcoin is built on. It's like an accounting book of EVERY single transaction. When the Bitcoin is mined, how many people have held it. How many times it's been split, and where it's currently being held. The ledger is not only decentralized just like the Bitcoin protocol network, but it's completely transparent. You can carry the Bitcoin on a USB, you can carry it on your PC, laptop, tablet, or even on a piece of paper. If you have good memory, you can memorize your password and log into any computer around the world and access your Bitcoin. In the event of war, it's much more manageable than metals, paper money, or stocks.

Go to blockchain.info and type in a wallet address and you can see exactly how many Bitcoin's are in that wallet, how many Bitcoins have been moved through the wallet (current amount might be less than total amount that has been received by the wallet as some have been sent out). Here's a video that explains in 5 minutes what is Bitcoin and blockchain.

Bitcoin and cryptocurrency will and is changing people's lives. There will tons of wealth created by this movement as paper fiat money slowly implodes and the rise of the trustless, instant, low fee crypto economy replaces it. You no longer need to trust your money to a bank. The network effect almost ensures that the security of your crypto is as safe as a swiss bank account, barring that you flash your passwords (private keys) to the public. The volatility will eventually settle once mass market adoption is reached which will be in a few years. This year alone Bitcoin has risen from $700-$8,000. The market cap of the top 100 crypto currencies has risen from $17bn in January to $236bn in November.

I'm a former gold and silver investor. The space is split between die hard precious metals people that will never believe anything else as money and the latter of people like me that still like metals, but realize there is no way these heavy pieces of metals will even be used as a currency. Potentially a store of value, yes, but if you hold 1,000 oz's of silver and some gold, where can you store it safely and move it when needed easily? You can't. You can pay hundreds to thousands of dollars to a custodian to protect your metals but why pay such high fees? Crypto's are more secure, there's no fees to store them, it costs pennies to single dollars to move hundreds of thousands of dollars, and transactions are instant and completely traceable/transparent.

There's people that have made millions in this space in a matter of months this year. Hundreds of thousands this year. My friend paid off all his credit card debts, went on 2 vacations and quit his job. Could it be a bubble, potentially but we are nowhere close. A bubble requires massive increases in prices in a short amount of time, and ***also mass market adoption. We lack mass market adoption, so it's unlikely a bubble. No one owns Bitcoin so how can it exactly be a bubble? This is a paradigm shift of financial system from a society that has had it's trust raped and pillaged over and over again until someone eventually got fed up and created a trustless financial system.

Research Bitcoin and crypto.

Then Buy Bitcoin. Buy small amounts weekly and if you think it has some legs to stand on, dive in a little deeper.

 

[Tenacity]

This is a serious question. I'm becoming concerned about the rising tensions and the outbreaks of violence that have been happening. If any kind of a war breaks out, the economy is going to tank.

I was thinking gold would be a safe bet, but I'm wondering if there's anything else that's worthwhile?

My opinion has always been one, that if the US Economy truly goes down in a significant way.....all of the promoted "hedges" wouldn't really be as "strong" as they are promoted.

For example, we all know the mantra of investing in GOLD to hedge against serious inflation or the fall of the US Dollar, but the problem is that if the US Dollar falls so goes with it the US Economy AND The Global/World Economy (which are tied up in the US Economy) so what good would Gold do?

To answer the question, I don't think there is a strategy to "hedge" against the US Economy falling. If the US Economy falls, the present-day freedoms and lifestyles of mankind who are blessed to live in a "free country", will be significantly changed forever. We might no longer be "free" for example, thus, any GOLD someone has could be taken from them by a new over-powering foreign government.

 

[Bible_Belt]

As soon as the power grid and the cel phone towers go down, bitcoin becomes worthless.

 

[AAAgent]

As soon as the power grid and the cel phone towers go down, bitcoin becomes worthless.

A majority of us won't be alive if the power grids go down, including the rich and powerful. Millions will die that require electricity for medical life support, cold will kill, lack of communication/transportation will result in starvation and chaos. You believe, humans have advanced this far just to move backwards? Our roads, infrastructure, technology, our medical innovations will all just be globally nuked to h3ll so you can trade your peanut butter? Society and the elite status would collapse if that were to ever happen. I don't see us going back to the stone age, losing the internet, or electricity.

But yes, stock up on your peanut butter.