Alternative Investing

Perpetual Bonds: Equity in Disguise

Perpetual Bonds: Equity in Disguise

In financial and economic circles, the word “forever” is rarely uttered. In fact, the word “forever” has really lost its meaning in modern vernacular, commonplace only among teenager “BFF” text signoffs. But not anymore – “forever” is back in vogue, along with the subject of perpetual bonds. Forever is a Long Time A perpetual bond...

Investors Can Do Better Than Betterment

Investors Can Do Better Than Betterment

The Brexit has sent many investors into panic mode. Even the pioneer in the world of automated investing – Betterment LLC – slipped into shock, resulting in some unwanted publicity. On the morning of Friday, June 24, Betterment’s robo-advisors ceased working. They halted trades altogether, which resulted in some seriously negative reactions. Further, Betterment made...

Stay LinkedIn – Calculating the Real Value

Stay LinkedIn – Calculating the Real Value

Next week, the quarterly earnings from LinkedIn Corp. (LNKD) – among other tech stocks – will finally become public knowledge. Once the market responds to the report, it appears logical that the resulting stock prices would represent fair market value. This cause and effect, however, is not so simple. The legitimacy of the market reaction...

How to Make Volatility Work for You

How to Make Volatility Work for You

March has been very kind to the markets. Share prices are on the rise, as investor appetite for risk has increased. And volatility has cooled. Thursday, March 24, was the ninth day in a row that the S&P 500 Index closed up or down by less than 1%. During the 48 trading sessions prior to...

LabCorp: Opportunity Within Hedge Fund Reporting Season

Move Over, Earnings, It’s Hedge Fund Season

Another earnings season has come and gone. Wal-Mart Stores Inc.’s (WMT) quarterly report last week marked the end of “the season” for S&P 500 companies. But I’m already on to the next reporting season: hedge funds. Every quarter, these secretive institutions disclose their long portfolios to the public in an SEC-mandated filing called a 13F....

Accredited Investor Definition Expanded by U.S. Government

Expanding the Definition of “Accredited Investor”

Being both smart and rich is every investor’s dream. Some people assume that one needs to be smart to become wealthy. Others argue the wealthy have more opportunities to become smart – perhaps it’s because they’re able to purchase a better or higher education for themselves or their children, or that money gives them access...

Warning: Derivatives in the Hands of Amateurs Are Dangerous

Warning: Derivatives in the Hands of Amateurs Are Dangerous

Warren Buffett once famously remarked that “derivatives are financial weapons of mass destruction.” That’s true enough in the hands of financial professionals. But what happens when derivatives are nicely packaged for retail investors – offering an attractive yield based on the performance of individual stock indices, currencies, and even single stocks? You get the current...

Options: Free Your Mind and the Cash Will Follow

Options: Free Your Mind and the Cash Will Follow

My old-school Webster’s Universal Unabridged Dictionary (copyright 1936) tells me that, from a layman’s – or non-investor’s – perspective, “option” means “the power or liberty of choosing; the right or power of deciding on any course of action; as, to leave it in one’s option to do something.” For our purposes, “an option is a...

Theta Can be a Powerful Tool For Options Trading

Time Is on Your Side, Yes It Is

If you’ve ever traded options, you’re likely aware of the “Greeks.” Delta, which compares the change in price of an underlying asset with the corresponding change in the price of a derivative, and vega, which measures an option’s sensitivity to changes in the volatility of the underlying asset, are the most popular. But theta is...