MilitaryToFinance

One important rule to remember in life, but especially in the investment world, is that free research is almost always worth what you paid for it. With a few incredibly rare exceptions (like Mike Burry posting on Yahoo message boards) anybody who is smart enough and provides useful insight in their research will demand to be paid for that research. I would be wary of any free newsletter pitching stock "research" and I use that term loosely. Also, before you listen to anybody who claims they saw the financial crisis coming before it happened you should stop and ask yourself, why is this person not worth hundreds of millions of dollars and why are they still writing for an online newsletter? I'm a big believer that smart individuals with discipline and research can outperform the market over time. However the more time I spend working in finance the more I believe that most individuals are better off with low cost, broad coverage index funds or ETFs. If you have a full-time job it is highly unlikely you will have the time to really do the due diligence necessary to outperform the averages. Jim Cramer's 1 hour per week is a bullshit number, you're competing against people who spend 60-80 hours/week doing research and for every share you buy because you think it is cheap somebody is selling it to you who thinks it is expensive. If you are going to run the risk of a concentrated portfolio of just a few names you need to know them inside and out. Not just read the news but understand the accounting, how will those things you read about flow through the three statements, how will it effect the multiple being applied, which multiple is the right multiple for this business, where are we in the cycle. If you don't have the time to really understand a few businesses completely then you need to diversify to lower your risk and if you're doing that you might as well just own an index fund.

I agree. Honestly I think the only reason this is getting strong reviews is because of how bad Ep I - Ep III were. If this were the first Star Wars made since the original trilogy I think it would get below a 50% positive instead of 95% positive rating. I couldn't tell from one scene to the next if this was a sequal or a spoof. You go from trying to be dramatic to a scene where I'm pretty sure the characters look at the camera and wink because they know they are planning the exact same mission from Episode VI and they want to make sure you get it too. Not to mention the one-dimensional characters and characters with no flaws. Part of what made the original trilogy great was even the good guys had flaws/issues. Now you've got a main character who is perfect, with no training can fly better than Han Solo, can fight with a light saber better than a trained Jedi and somehow goes from believing that Luke Skywalker was a myth to doing Jedi mind control without having any reason to know/believe that such a thing was possible. It was an entertaining 2 hours but this hardly qualifies as a great movie in my book.

I've been using a United Visa card for years now but no longer travel enough to find it that useful and am looking to switch to a points or cash back card. Never had a points card before so I'm not sure how flexible they really are in using the points. Does anybody have a good experience with any of them in particular? Or is it better to just stick with a good cash back card and forget trying to accumulate points?

You are correct that you would want to talk to a CFP not a CFA for this sort of thing. Getting your CFA is definitely a pain in the ass and is great signaling that you are talking to a competent person, just not the right person for this conversation. The CFA is focused on accounting details, financial statement analysis, hedging, ethics of managing money, etc. There are sections on portfolio allocation and risk management but with a focus from the standpoint of running a professional portfolio not your personal savings (you probably aren’t hedging the FX exposure of your international mutual funds in your IRA). A CFP is better equipped to handle questions of estate planning, matching your personal goals with broad savings/investing plans, retirement questions, etc. I would also add, in addition to finding somebody charging by the hour rather than by commission is to ask what standard they operate under. You want an advisor who operates under the fiduciary standard rather than suitability. In the former the advisor is legally required to disclose conflicts of interest and to maintain on-going monitoring of your investments. For a suitability standard they just have to show that any investment advice offered is suitable for your needs and then there is no further obligation. This means that they can advise you to invest in a high cost fund where the advisor receives money from the fund even if there is a lower cost alternative available.

I'm going off the ATF's manufacturing data and I didn't count a precise number so might be over 300 now. The data you linked to isn't as useful because lots of people have a license but aren't manufacturing anything currently. The manufacturing data is by location so it also is a little messy but at least paints or more current picture. I was surprised at how many companies there are that build fewer than 10 guns each year (a couple hundred of them in each category). That really skews the data. Of the mass producers in handguns Ruger, Smith&Wesson and Sig make 60% of the guns produced in the US, rifles are more competitive but shotguns are incredibly concentrated (Remington & Mossberg/Maverick together are 81% of production). Granted this doesn't count imports and we are now importing 5.5+ million firearms annually. Even if you're a custom manufacturer it seems like that must be more of a hobby than a job at that level of production. I guess that explains why you don't see them around a lot and they are probably heavily concentrated in certain states/areas.

I had an interesting discussion with a coworker today about gun companies and I'm curious to hear what people here think. It's been a while since I've bought a gun so my impressions might be somewhat out of date. Every time I looked at getting a new gun it seems like the choices are dominated by a handful of companies you see everywhere (Colt, Ruger, S&W, Glock, Springfield, etc.) and when people ask online for advice those same names always come up. But according to the ATF there are over 250 handgun manufacturers in the US plus all the imports each year. So who are all these small manufacturers and where are they selling guns? Most of them have sprung up since 2004 (only 79 manufacturers registered with ATF in 2004) but I don't feel like I ever see new guns from new companies on shelves. If you think about it making a gun isn't all that complicated once you get the government approvals so it's not that surprising that new manufacturers pop up when the gun market is doing well. And it's pretty common for people to own multiple guns from different manufacturers. On the flip side, while I'm willing to try anything from names I know I'm not sure I would trust a no-name gun company I've never heard of considering how badly things can go wrong with a poorly made firearm. So has anybody hear bought from a small company or even seen companies that make maybe 1 or 2 different handguns and that's it?

I think the most telling part of that article is the woman "realizing" that the behavior talked about in the SAPR brief matched his actions and then pressing charges. If you have to go to a class and be told that you were "assaulted" for you to notice it then you most definitely weren't actually assaulted.

Is Guard pay treated as ordinary income? I would think with an airline paycheck and a guard paycheck people would be cutting it close on the income limits for a Roth IRA.

This is why I figured I would pose the question on here. I'll be honest I forgot the first time VA loan has a funding fee that high. I remembered that the interest rate is marginally higher which makes sense given the increased credit risk. I'd be willing to pay a slightly higher interest rate on debt given the ROI I will get on money not put into a downpayment but you are right, reaching breakeven after that up-front fee is probably unlikely. I was really hoping to avoid saving up $150k+ for a downpayment but I guess I'll be renting for the foreseeable future.

Thanks I didn't know that. Certainly beats saving a full 20% down.

Yeah it looks like the loan limit for the county I would be shopping in is $625k but that still doesn't buy you anything worth owning unless you want to basically gut every room and remodel. I'm not sure I have the patience for a remodel so I guess I'm stuck saving for a downpayment for a while.

The first time I bought a house I was able to get much better rates with a traditional loan so I didn't spend too much time researching VA loans. Is it still true that VA mortgages are capped at the FHA loan limits? It would be nice if there was a way to do a jumbo loan given the housing costs in my area but I'm guessing that isn't possible.

While it isn't an employment program, check out American Corporate Partners (https://www.acp-usa.org/) mentorship program. They will match you up with a mentor who can help you one-on-one with resumes, interviews or just making connections in whatever career field you are looking to enter. Most of the mentors are experienced people and high up in their organizations with good contacts. I haven't used a headhunter. I chose the more conventional path of going back to school for a full time MBA. If you don't want to take that much time off but have an interest in finance, a number of the banks have veteran recruiting or consider veterans a "minority" group and include them in any minorities hiring events. VOW (https://veteransonwallstreet.com/) is another good recruiting resource.

Energy seems to be a popular speculation on the forums so I thought I would post this. I believe his presentation was televised on CNBC so if you dig online you can probably find the recording which gives it a little more life. If you can't find the video though the PDF has a transcript of his comments on each slide. I highly suggest you read through this if you're considering investing in any of the fracking companies. https://www.greenlightcapital.com/926698.pdf

In general I think the fresh pet food market has strong tail winds to it and will keep growing but this stock is really a pipe dream. Losing money on an accrual basis, losing money on a cash basis. Let's assume they can hit their projected 9%-10% net margin and lets assume they can manage to grow the top line at 30% per year continually. At today's stock price you have to wait until 2021 to hit a 15x P/E multiple. So based on aggressive assumptions which they have yet to prove are attainable you get $0 in dividends, $0 in price appreciation for 6 years and you're still at an above average multiple on a cyclical stock. And that's not accounting for future dilution which is almost guaranteed as they've only floated 60% of the stock so far. Don't confuse a good product with a good investment.

To play devil's advocate, if idiots are willing to give you money for absolutely nothing in return why wouldn't you take it? A fool and his money...

I've always been a big proponent of waiting to get a real MBA for those who are considering graduate degrees. If there is anybody out there thinking about leaving the AF and wanting to get a good MBA, Columbia's veterans group (MIBA) is hosting a virtual information session on Saturday (28 Mar). I know when I was still on AD trying to find time to get out and visit schools was a challenge so we convinced Columbia to set this up. It should be a great session and even if you don't want to come to New York you can learn a lot about what it's like for veterans getting out and going back to school full-time. The great thing about MIBA is you will get the no BS answers that the admissions staff might not want to tell you. https://events-na1.adobeconnect.com/content/connect/c1/1021097606/en/events/event/private/1594534778/1622261120/event_registration.html?sco-id=1734820690&_charset_=utf-8

Don't use the target date fund and with that size investment you'll be in the Admiral class shares which have even lower fees. My expense ratio at Vanguard is 0.09% right now.

You realize those two are almost mutually exclusive right? You're going to have to take risk if you want to be able to generate returns high enough to make $100k into "something awesome" down the line. If you really don't want risk you can buy treasuries at ~2.20% for 10 years. You're guaranteed to get your $100k back plus interest but you might not beat the rate of inflation over those 10 years. If you want to do any better than that you'll have to take risk and invest in the stock market.

WTF kind of news do you guys watch? This was on CNBC basically the entire day yesterday and is the front page story in the WSJ today.

I'll start by saying I don't cover Oil & Gas so this is just based on discussions with people who know it better than I do. This is really a war against US domestic production. The Saudis have always been the swing producer and the main controller of supply/pricing as they have massive reserves and a cost of production closer to $25/barrel. They are feeling pain but nowhere near the pain of others at current prices and they want to squeeze out the massive growth in US production at a higher cost. When looking at Shale most people give a range of $60-$80 as the "cost of production" but that is the life-cycle cost including amortized cost of exploration and drilling. The marginal cost to keep pumping in places where drilling is already happening is much lower. This is where my expertise breaks down but I would guess it is closer to $45-$50 before they actually start shutting down wells. The people who get hit first and hardest are exploration folks. At current prices Exxon can't pay both its dividend and its planned capex and they already stated publicly that the dividend won't be cut. I think this will be a common trend across the industry as exploration for new wells at current prices isn't economic. The last plunge in oil prices brought the ROE on oil companies down to the low single digits. The problem with the Saudi's plan is we are increasingly more efficient in all of our uses of oil which is putting a long-term damper on demand. All that said, everybody knows all of this already and it is baked in to many of the prices. Stocks are down and vol has been bid way up(60%-90% IV on many of the shakier names) so buying puts is pretty expensive. You could short calls to take in the premium if you have strong conviction that oil will stay depressed for a while but the negative gamma could kill you if there is a snap-back in prices. Over the last few years banks seemed to forget that oil prices can go down and these companies were able to pile on lots of cov-light debt that could end up in bankruptcies or at least highly distressed restructuring. Overall I doubt there is much long or short that an average person should be investing in right now unless you have a huge amount of time to commit to researching the space and figuring out the marginal production costs for various wells and companies.

Stripes meets the IDF...

You know this is fake right? The Harrison Ford shots are badly photoshopped (videoshopped?) from Ender's Game, the jumping into a cave is taken from some video game trailer, not sure where the other parts of from.

If you don't get enough queep at work how about some fake queep? Business live action role playing... https://www.fastcompany.com/3036728/office-roleplay-meet-the-people-who-pretend-to-work-at-an-office-together-for-fun

I won't touch any Chinese companies personally. When you're investing in a company stock you are making an inherent leap of faith in a couple of ways. First you have to believe that the corporate accounting is robust enough you can actually believe what is written in the reports. Then you have to believe the legal system will support the rights of shareholders in the company, and finally you have to believe that the political system is stable and at least somewhat aligned with private ownership. To me, China fails on all of those tests. I'm not saying you can't make money speculating on China but for a long-term investment I don't like the country. We know the government fakes all their data, they are actively hostile towards foreign investors, they don't particularly like their own citizens making money as investors and nobody believes their legal system functions properly.