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Messages - Bevan

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Shares / Re: Offshore Structured Product
« on: April 13, 2019, 10:43:54 pm »
New FTSE 100 Structure:

Your return numbers are misleading. Working for a regulated brokerage you really should be more careful.

You're offering an option structure based on the current strike price of the FTSE. It returns 18% per annum in simple interest, not 54% or 72%. That's just you adding up all those 18% returns.... i.e. if I invest R100 in this structure then after 3 years I assume I get my R100 back plus R18*3 = R154. Compound interest would have given me R164 back. Nevertheless, 18% per annum is still pretty good.

Of course if markets do better than 18% return per annum then the option writer gets to keep that upside. Not so? Also, what happens if for some reason the FTSE is 40% lower? Then I presume the option is worthless and one loses their premium i.e. their initial R100...?

I imagine this would appeal to an investor who thinks markets are neither going to shoot the lights out, or fall too much. I reckon there's a decent crowd out there who might fall into that mindset. Either way, must be a nice book for your option traders to manage. Short vol, negative gamma trading is always exciting.   8)

Shares / Re: What happened to all the 20, 25 & 30%+ stocks?
« on: February 22, 2019, 04:41:07 pm »
Still doesn't help me with my goal of getting an investment that gives me 15-20% return per year though!  :'(

The only way you're going to see that type of return is taking an outsized bet on something the market thinks unlikely to happen. Some of the smart money is punting gold, with most reserve banks around the world piling into physical gold, as no-one trusts US debt anymore. Or you could buy an out the money collar on Bitcoin, if you can find someone to structure you one. Shouldn't be too difficult if you're a HNW with a private bank. Take below $1,000 as your put strike and above $5,000 as your call strike. I can't see crypto-currencies going sideways for much longer as people are either going to start bailing out (i.e. price goes to zero) or else somehow a fire gets lit under them (price goes above $5,000). You could also buy a deep out the money put on equities. A lot of smart money is also punting second passports, and land with decent water on it. It's not going to get you a 20% return but you will have options should the proverbial sh1t hit the fan.

Hi Bevan,

That was a comprehensive round up on what is on the ground in SA. I think starting small with consistent aim at direct marketing/selling to consumers is the way forward. Do you think from scratch interest can be generated in a CSA type venture? I am visiting your site now and will reply soon.

Thanks again for taking the time to  reply

It's really difficult to beat the price of FMCG retail eggs. Eggs are typically  super KVI's for the big retailers i.e. they sometimes loss-lead on these items and then hope to gouge you on other stuff that you don't pay close attention to the pricing of, especially those sweets on the exit aisles. So I doubt many are going to invest in a poultry CSA to get cheap eggs. However, I expect there will be several initiatives such as in the near future, where people can invest in a financial product that offers a decent return, with an option to take the physical e.g. eggs or cattle. In general, with low value items you want to avoid doing logistics at all costs. Fine if the people come to the farm to pick up, but forget about offering deliveries.

Hi there are several crowd-farming ventures in SA, following on from US and European models. I haven't participated but the idea is neat, assuming you live nearby. Very similar to CSA (Community Supported Agriculture). Here in SA we are light years behind these developments, still relying on the entrenched big farms, big logistics, big warehousing and economies of scale etc. The majors clearly have the most to lose from direct farm to consumer type ventures. However, there is an app called Khula which is trying to bring farmers and consumers together, providing the logistics. It's not a bad start. There is also the OpenFoodNetwork and several boutique farm to consumer retailers.

In terms of your insto investors, no-one is going to be interested to fund a greenfields farm in this environment. Your best bet is to know some high-net worth who wants to take a punt on poultry - brave indeed... Land Bank provides loan finance but with all the normal corporate finance / senior debt issues.

My own personal project on the backburner is to create a digital currency (or voucher) for enabling CSA. Could be a real game changer in SA. I'm happy to chat more on the various issues. You can contact me via

Shares / Water as an investment...
« on: January 27, 2019, 03:02:54 pm »
I watched The Big Short on Netflix yesterday and enjoyed it immensely. Apart from some minor technicalities, I reckon they did a pretty good job of capturing the 2007/2008 mania and ensuing trades etc. Technicalities like if you have a short swap (ISDA) position with Bear Stearns, and then close out your exposure with UBS because you think Bear is going bankrupt, you've actually doubled your risk i.e. Bear won't pay you if they go bust whilst UBS will still expect payment.

Anyway, in the final credits it mentions Dr. Burry now only invests in one commodity... water. Having been in contact with him he explained his strategy some more to me. He's actually buying up water-rich farmland and planting water-intensive crops such as almonds etc. Reason being that water is rapidly disappearing across the globe, thanks to climate change, and these crops are going to be very rare in future. Many farmers I've spoken with are now saying that the past year has been the worst in terms of our drought. Yes, we've had rain, but thanks to the general temperature increases, the soil is too hot and baked to germinate crops. Plus, any rain just runs off the hard land now, and evaporates too quickly as well. Climate change is real folks and we're on the cusp of the hockey stick. Agriculture is going to get hit hard and I reckon we will soon stop exporting our water in the form of fruits and other crops pretty soon. This will affect everything and the taps will run dry in the next few years if something isn't done soon. Israel is far ahead in this game - they price water accurately, they recycle 90% of their black water for agriculture, they desalinate and they don't waste a single drop in the form of leaks. Plus most homes also all recycle their grey water for domestic, washing use, or for home-grown crops.

With that in mind, other than water-rich land, what investments do you see as being vital in the water sector?

Edit: Water is not actually disappearing. It can't be destroyed. Like energy, it simply transfers form on its ultimate journey from cloud, to river, to sea and back again. But it is being distributed in different ways now. Climatologists refer to this as 'drought and deluge'.

Off topic / Re: Live chat
« on: January 27, 2019, 07:30:27 am »
No problem with that, but I'm going to have to go and figure out what a MACD is now :)

Still no MACD Patrick? I bet you I could improve my timing significantly with just a simple MACD. Here's how to do it in Excel:

MACD's are neat for seeing alignments in timing between fast and slow money, and which moves are more trusted. Simple harmonics and nature loves harmonics and spirals, probably because no-one can escape the Coriolis force on this planet. But now am getting into the quadrivium and sacred geometry and everyone is probably snoozing off. Unless you follow Pythagorus' as well.....

Bollinger bands would also be useful. Simple standard deviation stuff. Bollingers are like the elastic bands of a market, telling you when they're too stretched and need to come back within normal ranges. All very basic human nature stuff.

Off topic / Re: Live chat
« on: January 17, 2019, 08:36:16 pm »
Patrick, how about a little test? Would you be able to throw a MACD indicator on there. Say 3 (Fast EMA), 9 (Slow EMA), 21 (Signal Line). Would be interested to see how performance improves, or not...

Shares / Re: Bloomberg watchlist
« on: January 12, 2019, 01:42:13 pm »
Both Bloomberg and Reuters offer fairly limited public access to their online services. They really want you to shell out for their terminals which cost several thousands of dollars monthly. However, a combination of several screens, Excel skills and live price links as Patrick suggests, plus a live TV feed, will take you a long way towards what the more professional traders take for granted at their desks each day.

Off topic / streaming financial news
« on: January 12, 2019, 01:38:13 pm »
Hi to all the more tech-minded amongst you... Like many, I've ditched DSTV for Netflix and the wider net. However, I can't seem to find a really decent streaming news and financial site. Of course I understand most outlets are trying to build their brands and offerings via their own apps etc. However, surely there must be a decent news and financials aggregator out there for free. Anyone have any advice in this area? 1st prize would of course be a news aggregator covering US, UK, international and SA news and markets, but I reckon that is a tall order.

Shares / Re: Buyer: Mind the Gap - Don't Buy the Dip
« on: December 20, 2018, 09:17:25 pm »
Hope everyone is having a nice break with families, whilst markets tank further. Many stocks are now in a buyback-blackout period where funds can't open new buy positions until early next year. However, many are liquidating still... Also, the Greeks are starting to go wild now with aggregate S&P delta and gamma at near-record negative levels, leaving markets very vulnerable to flash-crashes... All that many want for Christmas now is some stability.

It's also really interesting that crypto's are rallying strongly now, having delinked again from equities. Seems that many investors are exiting stocks and loading up on the crypto frenzy again... However, I suspect some profit taking going into early January, and major volatile falls in crypto will soon follow, as investors cycle back into stocks again....

The end to 2018 is proving exceptionally interesting for market developments, and could herald some insights for the future... Definitely need to watch the correlations here.

Shares / Re: Buyer: Mind the Gap - Don't Buy the Dip
« on: December 07, 2018, 02:15:11 pm »
Seems the PPT were called in for closing market action on DJIA. SA stocks rallying on the back of that but Dow will probably close weaker today, depending on how much support will be given to markets after non-farm payrolls.... Then SA stocks will probably correct down on the open Monday....

Off topic / Re: Live chat
« on: December 07, 2018, 10:41:31 am »
When? You gotta love prophets who don't clarify their predictions.  :)

Personally I agree we will get back to around 10 on USD, but in around 2-3 years time. For now we are more likely to bounce around the 14 - 15 level, until elections and the Eskom crisis is over. The silver lining with Eskom could hopefully be that we see it break up into generation - transmission - distribution, and we get a deregulated power market, and steadily falling prices.... Wow, that would be nice, and we could finally join the developing world with a free market.

Shares / Re: Buyer: Mind the Gap - Don't Buy the Dip
« on: December 06, 2018, 05:27:50 pm »
Daily momentum on DJIA just turned negative. Tomorrow could be a nasty day, if no support kicks in. Wonder if the Plunge Protection Team is still active these days? Although probably out of pocket due to all the Fed's spending of last few years....

Shares / Re: Buyer: Mind the Gap - Don't Buy the Dip
« on: November 20, 2018, 10:00:57 pm »
Let me tell you my story that I have already told here before your time and the older members may recall it even from the old Sharechat forum.

Guess I must have missed your story. I was also migrated from the early days of the sharechat forum although my posts here are generally few and far between. Of course individual shares can offer incredible returns over time. Warren Buffett is famously able to pick some of these. Very few others can, in the fullness of time.

As for the baby-boomers kids seeing to it... Well, research shows that their grandchildren are seriously under-invested in the market. They prefer to "experience" life and travel etc. Like wow, ah-we man, have you experienced the Pamplona Bull Run yet, or Diwali on Goa? The Boomer's kids themselves are fewer in number than the baby-boomer generation, hence the fact that most retirement plans are seriously underfunded i.e. not enough new contributors to cover current benefits.

Of course we must all do what we do. I don't give a continental whether anyone listens to my ponderings here or not. In many ways bulletin boards simply offer a way to jot down one's thoughts. But it would be foolish to outright ignore what many people are starting to think now.

Shares / Re: Buyer: Mind the Gap - Don't Buy the Dip
« on: November 20, 2018, 09:16:10 pm »
This is a great video to watch on the coming retirement crisis.... Some great insights on the future of the financial system, entrepreneurship as well.

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