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PRPL Nurples- Why purple valuation just might make your NIPS hard - DD inside
All- I have received hundreds of DM asking where the stock is going. I have received questions such as: where do you think it stops, is it over valued, undervalued, should my mom invest, should i Yolo, should i sell and take profits? blah, blah blah. Here is some DD- stop asking me about where this ends up because I don't know for sure but I have some Feely Good estimates. I hope this post makes your nipples hard and if it doesn't you're probably a gay bear. I am going to give you a quick run down of what my expectations are for Q2 earnings and it will include the good, the bad and the ugly. The ugly being the warrant accrual that will hurt GAAP. First of all, There is little that needs to be determined for Q2 top-line as they have already released April and May Sales. April Sales Came in around ~62M based on my math and May Sales came in at 88M and some change. Based on these numbers, we can safely assume that we will at a minimum have somewhere around 225M in revenue for the quarter by using the average of April and May to determine June. I believe 225M to be on the low side and I have continued to up my estimates as I believe E-commerce is still thriving, especially purple. Purple continues to climb the web traffic ladder and has moved up another ~500 spots to be the 13,000 most popular site in the world. For simplicity sake, I am going to use some historical numbers to estimate profits. If you'll look at previous posts that I've made then you'll see how I arrived at these numbers. There are some quick napkin calculations below. We can safely assume that the average wholesale selling price of a mattress is ~1350 dollars and we can assume that GM for wholesale is around 30%. This means the average cost of a mattress to manufacture is ~945 on average. From my previous posts, we knew that pre Covid the business was split by units, not by gross sales. On average, wholesale consumed 50% of capacity and DTC consumed 50% of capacity. In order to determine average DTC selling price then we can equation .5*1350 + .5*(DTC Price) = 1900. PRPL indicated their average selling price per mattress was ~1900.00, I found this in their s-3. ----------------------------------- .5*1350 + .5*(DTC Price) = 1900=========== DTC average price is 2450.00, 1350 is average Wholesale price. DTC Margin is ~62% Estimated Wholesale Margin ~30% Estimated ---------------------------------- Historically, advertising costs have been about 30% of revenue. I have been tracking advertisement for purple and from a TV cost standpoint, they have not increased their commercial count at all in the last three months. See link, PRPL is still only performing 125 commercials per day. This commercial rate has held steady for 6 months. https://www.ispot.tv/brands/tqU/purple-mattress I believe purple has increased their ad spend online but I believe it will be proportional to their new capacity on a unit basis. Previously purple had 6 Machines of capacity and spent 38M in advertising, I believe they will spend (7/6)*38M which is 44M or roughly 15M per month. Just because revenue is up, doesn't mean they will spend more per unit- they are capacity constrained and that is terribly inefficient. ---------------------------------- The following table shows my best guesses on their major category costs. This includes the gross Margin and the other costs subtracted from the Gross Margin.
Total Revenue net revenue effect
Gross Margin from Wholesale
Gross Margin from DTC
Research and Development
Profit Non GAAP
66.5M or 1.23 EPS
Profit GAAP Estimated
$31.5M or .59 EPS
--------------------------------------------------------------------------------------------------------------------------------------------------- If we used 66.5M, PRPL would report 1.23 EPS on an adjusted Basis. The warrant Accrual will unfavorably push the EPS down on a GAAP basis and we will likely see something around .59 EPS. If they can achieve this for the next 4 quarters then in a years time there is a huge potential for stock increases based on the following P/E's.
Non GAAP Est.
Stock price assuming 8x P/E
Stock Price assuming 12x P/E
Stock Price assuming 15x P/E
Stock Price assuming 20x P/E
People may say that this is super inaccurate..... but if you look at the following cash statement then you will realize that PRPL has been generating more than 1M per day in cash for the last two months - that is absolutely insane. purple has generated 70M in cash in 60 days. Mark my words, PRPL is going to be more profitable than TPX this quarter. TPX reported earnings of .68 EPS today on revenue of 665M. TPX is trading at 80+ per share. if purple reports a similar .68 EPS then it would be valued about 60% lower than TPX on an EPS basis. if purple posts EPS of ~1 dollar then it would be undervalued as compared to TPX by about 80%. I hope your NIPS are tender now. Hope this helps you understand why I believe PRPL to be so undervalued.
The NBA league office announced that all awards will be officially based on play PRIOR to the bubble. With that, the cases are locked, the campaigns are closed, and the voting will begin. While the media may focus on the MVP award and other prestigious honors, reddit has the distinct honor of awarding the LVP. The LEAST Valuable Player. It's a tradition that dates back to 2016-17, when aging Indiana SG Monta Ellis won the inaugural trophy and then promptly disappeared from the NBA forever. In 2017-18, Minnesota SG Jamal Crawford won the (dis)honor with some incredibly bad defensive numbers. Last season, New Orleans SF Solomon Hill won LVP by helping to sink a drowning team and accelerating Anthony Davis' decision to fly the coop. Before we announce this year's winner, let's review the criteria and caveats: --- Obviously, the worst players in the league are the ones who sit at the end of the bench and don't get any playing time. However, this award focuses on players who log a decent amount of minutes and consequently affected their team's play the most. Simply put: the more you play, the more damage you can do. --- And that actual "damage" is important. If you're on a tanking team, no one cares about your poor play; it may even be a positive. I'm also ignoring young players (under 21) who are still developing and can't be expected to be solid players yet. --- Similarly, we don't want to judge players within the context of their salary any more than the actual MVP does. We also do not weigh in injuries either. For example, the Wizards would have a hard time competing with John Wall on the sidelines (0 games played, $32M in salary), but we want to focus on players' on-court performance instead.
PG Mike Conley, Utah: 28.6 minutes per game, -0.80 RPM We're using Mike Conley to reiterate that the LVP does NOT factor salary into the equation any more than the MVP does. But if it did, Mike Conley and his $33M salary may be in trouble. It was a disastrous start to the season for Conley. Playing in a new role as a second fiddle to another guard, he could never find his groove. His assists plummeted (down to 4.3 per game), his free-throw attempts cut in half (from 5.8 to 2.9), and he only shot 42.9% from two-point range. That said, he still shot pretty well from 3 (37.6%) and played OK defense, keeping him off our official ballot. SF Miles Bridges, Charlotte: 30.7 minutes per game, -2.68 RPM Like Mike Conley, Miles Bridges seems like a great guy whom you'd hate to criticize. Alas, that's our exercise here. Caught in between positions, Bridges hasn't been able to figure out his rhythm on offense in the NBA either. He hasn't shot well (33% from three, 48.6% from two) and doesn't get to the line enough (2.0 FTA) to make up for it. The advanced stats get even worse from there (although to be fair, they get dragged down by playing in a bad starting lineup.) Fortunately for him, Bridges is spared by his youth. At 22, he's technically over our "21 year old" threshold, but it still feels unfair to pick on his growing pains as a sophomore. Perhaps in time, he can find a role that can take advantage of his athleticism and talent. But be warned: the clock is ticking. We're taking the kid gloves off soon. Bridges and fellow analytics-allergic Kevin Knox (-7.7 RPM!) will be entering Year 3 next season and will need to step their games up to avoid LVP discussion. SF Kyle Kuzma, L.A. Lakers: 24.6 minutes per game, -0.74 RPM Kyle Kuzma can score if need be, but his skill set never made him a natural fit to play third banana to superstars like LeBron James and Anthony Davis. He's not a 3+D player -- he's more of a no-3 (30% this year) no-D player. At the same time, the LVP is about negative impact, and it's hard to find much of consequence here. After all, the Lakers still finished with the # 1 record in the West. Kuzma struggling to find his way is like a tree falling in the woods or a person farting in an empty elevator – ultimately it didn't matter. SF Andre Iguodala, Memphis/Miami It feels like ancient history now, but this past offseason, the Memphis Grizzlies acquired Andre Iguodala in a trade (under the presumption he may be dealt again.) According to official reports, Iguodala and the Grizzlies MUTUALLY decided that he wouldn't play for Memphis and wouldn't even report to the team in the meantime. Okay. Fine. We'll go along with that. Still, that situation leaves a sour taste in the LVP headquarters. Memphis turned out to be better than expected, and could have used an extra rotational player. And even if Iguodala wouldn't have helped much on the court, he could have been a valuable mentor for their young kids. That's the least you can expect for a nice $15M in salary.
our official top 5 LVP ballot
(5) PF Anthony Tolliver (POR, SAC, MEM): 15.6 minutes per game, -3.60 RPM I've always had a soft spot for the wise ol' owl, Anthony Tolliver. He's reportedly a great teammate and locker room presence. He also started to develop into an effective stretch four towards the end of this career. But alas, the end of his career may have snuck up on us sooner than we expected. Tolliver disappointed for Minnesota last season, and completely flopped in his return to Portland. At age 34, he doesn't seem to be a viable rotation player anymore. He didn't play quite enough to merit LVP, but he still played more than he should have. There's a chance Tolliver comes back next year to serve as a veteran mentor and pseudo-assistant coach somewhere, but it's more likely that he retires. If he does, he'll have played for 10 different franchises in his not-so-illustrious but very respectable career. (4) SG Bryn Forbes, San Antonio: 25.1 minutes per game, -0.95 RPM The NBA is all about shooting these days, and Bryn Forbes can shoot. He's hit an even 40.0% from three during his NBA career so far, and wasn't too far removed from that this season with 38.8% on 6.0 attempts per game. As a result, his true shooting percentage (57%) was above average. The Spurs lacked spacers, and Forbes fit that bill. So what's the problem...? Turns out, basketball is more than a halfcourt game. And whenever the ball crosses that pesky midcourt line, Bryn Forbes starts to become a liability. At only 6'3", Forbes is undersized to play the SG position, which is where the Spurs played him 74% of the time (according to basketball-reference.) Partly due to those athletic limitations, he only registered 0.5 steals per game, and blocked a grand total of 0 shots in his 1579 minutes of action. The advanced stats get ugly; Forbes ranks near the bottom at his position in DRPM, DBPM, all the alphabet formulas that you can cook up. At the end of the day, LVP is about negative impact, and there's plenty here. Forbes is not a bad player in a vacuum, but he did not help the Spurs this year. In fact, their undersized lineup is a big reason why they're struggling so much on defense (25th in the NBA). As a direct result, they're on track to miss the playoffs for the first time in decades. (3) SF Mario Hezonja, Portland: 16.3 minutes per game, -2.79 RPM During the entire run of the Damian Lillard - C.J. McCollum era, Portland has struggled to figure out their wing rotation. That would be tested even more this season, with familiar faces like Moe Harkless, Al-Farouq Aminu, and Evan Turner slipping out the door. The trials and tribulations kept coming like Damian Lillard was Job, as injuries ravaged the Blazers' new depth chart. The team didn't need a star to emerge at forward -- but they needed somebody. Anybody. In theory, that player should have been Mario Hezonja, a former lottery pick and a live body with good athleticism and size at 6'8". Signed this summer for a modest price ($1.7M), Hezonja had the chance to jumpstart his NBA career with a major opportunity on the team. Instead, he flopped like Marcus Smart taking a phantom elbow. Hezonja's biggest problem is that, at age 25, he still hasn't found his feel on the court. He's not a good shooter (32.8% from three), and doesn't use his athleticism to find his way to the line (1.1 attempts per game.) He was a non-factor (5 PPG, 3 RPG) on a team that desperately needed him to step up. In fact, the Blazers were so desperate for help that they not only signed Carmelo Anthony, but they played him over 32 minutes a game. Again, we see a real "LVP" candidacy here with a direct effect on the standings. The Blazers' getting a big fat nothing from Hezonja was a major part of their struggle to get to .500 this season. (2) C Dewayne Dedmon, SAC/ATL: 17.6 minutes per game, -2.51 RPM We're not supposed to factor in salaries into this equation, but Dewayne Dedmon's situation merits a mention for context. The Sacramento Kings signed the big man to a head-scratching 3-year, $40M deal this summer (seriously.) Clearly, GM Vlade Divac thought his young Kings were only a few veterans away from making the playoffs, bringing in (and over-paying) Dedmon, Cory Joseph, and Trevor Ariza. Among the three, Dedmon turned out to be the most disappointing for several reasons. He didn't play well to start the season, and got usurped in the rotation by underrated Richaun Holmes. Rather than suck it up, take a deep breath, and take a relaxing dive in his new Scrooge McDuck money pool, Dedmon started to whine and complain and push for a trade. For a team that was struggling, Dedmon's headache became the last thing they needed. Ultimately, they ditched him back to where he came from in Atlanta. Now, being difficult and being a prima donna isn't enough to get you LVP honors. You have to stink on the court as well. And sure enough, Dedmon started to check those boxes. Billed as a stretch five after hitting some threes in Atlanta, Dedmon lost his shot in the SMF airport baggage claim. He shot only 19.7% from three for the Kings, registering a 47.3% true shooting percentage on the season. His defense is OK, but it's not good enough make up for his poor offensive play. He's not bad enough to get LVP, but he hurt his team this year. (1) PG Isaiah Thomas, Washington: 23.1 minutes per game, -2.75 RPM We've awarded three LVP trophies in the past, and a familiar pattern is starting to emerge. The most dangerous players aren't necessarily the bad players; they're the players who used to be good. Because of their prior success, they tend to get overplayed by their coaches and drag their teams down with them. It wasn't too long ago that Isaiah Thomas found himself in the MVP conversation for the Boston Celtics, as his incredible shotmaking helped make up for any defensive limitations he may have as a 5'9" player. That said, a small player like Thomas is always going to have a thin margin for error to remain a winning player. He needs to be GREAT offensively to make up for his defense. Unfortunately, his offense has not been great since his infamous injury. He can still make shots (hitting 41.3% of his threes), but he's not getting inside the paint and not getting to the free-throw line (1.9 attempts per game.) As a result, his true-shooting percentage lagged to 53.1%, well below league average. If Isaiah Thomas isn't making scoring efficiently, then what is he doing to help a team win? He's not a great distributor (3.7 assists per game.) He's a very poor rebounder (1.7 per game.) And yes, that defense is still a major problem. According to ESPN's RPM metric, Thomas graded as a -4.2 impact per 100 possessions, the second worst in the league at PG after Trae Young. Basketball-reference lists his "defensive rating" at 121. For comparison's sake, the worst team defense in the league still held teams under 116. (That worst team? The Wizards.) You can make an argument that there's still a place for Thomas in the NBA as a sparkplug scorer off the bench. Alas, that's not how the Wizards had been using him this season. He started 37 of 40 games for the team. Largely as a result of that, the Wizards' starting lineup was atrocious defensively. Fellow starters like Bradley Beal and Rui Hachimura ranked toward the bottom of their position in defensive metrics as well. When your lineup stinks defensively, a good coach may look in the mirror and say: hey, maybe we need a change here. Sadly, quick reactions are not Scottie Brooks' strong suit. He has the type of sloth-like speed that even frustrate workers at the DMV. The Wizards eventually dumped IT, but it took far too long to make that shift. To be fair, the Wizards' options at point guard were limited with John Wall injured. Veteran Ish Smith is mediocre right now, and Shabazz Napier arrived late in the season. Still, the point here is: almost any competent point guard (like a Napier) would have helped the Wizards more than Isaiah Thomas. He had become a negative for them. The cold hard truth is that: it's very difficult to win basketball games with Thomas starting. And given that, he is our official LVP.
What if I told you OPERATION 10 BAGS is actually OPERATION 20 BAGS - Courtesy of Albertsons (ACI)
Edit 1: I wouldn't rush to get in immediately with how poor SPY/QQQ look at open. Waiting until later in the day when they've maybe bottomed out is likely a better move Edit 2: Broader market looks to have stabilized. Congrats if you bought the dip. But now is time to get balls deep - I'm in the process of tripling my position u/trumpdiego 's post from a few days ago on ACI inspired me to do some research of my own, and it seems operation 10 bags may actually be a 20 bagger Post for reference:https://new.reddit.com/wallstreetbets/comments/huq9eq/operation\10_bags_brought_to_you_by_albertsons/) TL;DR: ACI is a leader in multiple sub-sectors that the market has been pumping lately. Their stock hasn’t increased as much as competitors in the last month, and it is cheaper than all of them on a P/E basis. Grocery prices have been rising faster than ever before. ACI is driving customers to their stores at a rate higher than anyone else in the industry. Online grocery sales were likely close to a record $19B in Q2. ACI’s online grocery sales were up +243% in April, and close to +220% this last quarter. Both of those last two facts suggest over $36B in quarterly revenue, compared to a street consensus of ~$23B. TL;DR for the TL;DR: Albertons Companies (ACI) 8/21 $20C’s are going to the moon when they report earnings before market open on Monday 7/27, but potentially sooner if any other online grocers report what you’re about to read below. And I'll show you exactly why referencing the data that the big bois use to evaluate investments. Primer for the type of autist who likes to know what he’s YOLOing options on: ACI is a food and drug retailer that offers grocery products, general merchandise, health and beauty care products, pharmacy, and fuel in the United States, with local presence and national scale. They also own Safeway, Tom Thumb , Acme, Shaw’s, Star Market, United Supermarkets, Vons, Jewel-Osco, Randalls, Market Street, Pavilions, Carrs, and Haggen as well as meal kit company Plated based in New York City. Additionally, ACI is the #1 or #2 grocer by market share in 68% of the 121 MSAs (Metropolitan Statistical Area) they operate in. And here’s the good part: ACI is a leader in the online grocery shopping/delivery marketplace. They offer home delivery services in ~65% of their 2,200 stores, and have partnerships with Instacart, Uber Eats, and Grubhub to facilitate 1-2 hour delivery in 90% of their locations. Guess whose stock is up 75% this quarter? Grubhub. Think the market likes food delivery? Besides online grocery shopping, what else is surging due to COVID-19? Meal kits. And guess what, ACI is one of the only grocers with a meal kit offering. Demand is surging so much that Blue Apron (APRN) decided to go public on June 24th, and is already up 22.47% since then. Think the market likes meal kits? Now back to your regularly scheduled programming: Before I get into the industry and ACI specific numbers that make me TSLA levels of bullish on ACI – let me tell you what the market thinks. Q: “Why do I care what the market thinks? I’m smarter than it!” – Probably most of you. A: “Because it doesn’t matter how right you are if the market doesn’t agree, especially when YOLOing short term options. Market Trends: Over the last 30 days, ACI shares are up a meager 3.43%, currently trading at a 7.3x P/E multiple of consensus 2020 earnings. Check out what the most comparable companies to ACI have done over the last 30 days, and associated 2020 expected earnings P/E they are trading at: Grocery Outlet (GO): +11.30% (39.7x) Kroger (KR): +9.16% (11.9x) Sprouts Farmers Market (SFM): +15.71% (15.1x) So what does that tell you? The market loves grocery stores right now in corona times (no shit), and ACI is relatively the cheapest stock out of all of them. The performance of Grubhub (+75% in Q2), Blue Apron (+22.47% since 6/24/20 IPO), and literally every single online retailer tell you the market’s opinion on online shopping, food delivery, and meal kits as well. If ACI were to trade at KR’s 11.9x P/E, that would make the stock worth $26.15, +63% from close today. Wonder what that means for option tendies… Oh what’s that? You’re asking why ACI could start trading on par with KR at a 11.9x P/E? Great question! Let me get into why this sexy boi will print: Starting from a macro perspective, CPI: Food at Home (NSA) is the consumer price metric that tracks inflation in food prices as grocery stores and related establishments. After deflating -.16% in 2018 and inflating just .03% in 2019, CPI: Food at Home (NSA) is +4.74% thus far in 2020. Why is this? Food prices are historically correlated with Disposable Personal Income, which also increased at its highest rate ever through Q2’2020. So as long as big daddy Powell has the money printer going brrrrrr, Albertsons will be making more and more money on each sale. Now, this food price inflation does benefit every grocer. However, let’s take a look at the ID Sales (which is the grocer equivalent of same-store-sales) trends recently for ACI and its main competitors that I was able to find data on:
So through at least April, ACI has been in a class of their own when it comes to generating repeated traffic at their locations. Courtesy of the fine people at Morgan Stanley, we also know ID Sales were +16% in June (so you can deduce they were in the +17% to +20% range in May), and still up “double-digit percentage” thus far in July. So far we’re established that ACI is selling their products for the most they ever have, and generating more traffic at identical stores than all their competitors. This data is affirmed by JP Morgan’s foot traffic index which shows ACI taking customer from Kroger. But wait – here’s the sexy part: Time to forecast ACI’s online sales this quarter using published industry data: According to new research released 7/6/20 by Brick Meets Click and Mercatus, U.S. online grocery sales hit a record $7.2 billion in June, up 9% over May. Let’s do some quick maths and deduce that online grocery sales were $6.61B in May. Now let’s be super conservative and say May was a 20% increase over April (realistically I would guess closer to +5-10%), and that gives us $5.51B in online grocery sales in April. This means we likely had ~$19B in online grocery sales in Q2. As ACI represented 1.60% of the online grocery marketplace in 2019, that would imply $304M in online revenue this past quarter. This is very conservative though, as even after assuming a 20% drop in April relative to May, we also assumed their market share stayed at 1.60%. Remember those nice people at JPM who’s foot traffic tracker told us that ACI was stealing customers from KR? Well they also estimate ACI’s 1.60% market share in online groceries to reach 2.50%-2.80% in 2025, with a CAGR (cumulative average growth rate) of ~9% in market share per year. That means their 1.60% market share is likely 1.744% now. Take 1.744% of $19B, and:
!!!!That means $331.36M of online sales!!!!
Remember this number Now that we have an estimate for ACI’s online sales based on the broader industry trends, lets come up with an estimate using only company data: On their last earnings call, management noted that online sales had grown 83% in 2018, 39% in 2019, +278% in the first 12-weeks of 2020, and +243% in April (Remember this number too!). Can you hear your Robinhood account balance going brrrrr? If not, the oven is about to get turned up faster Jerome can print a milli: Math time! · ACI did ~$265.4M in online sales in 2018. Source: https://www.digitalcommerce360.com/2019/11/04/albertsons-embraces-omnichannel-retail/#:~:text=Albertsons%20does%20not%20break%20out,%2461%20billion%20in%20total%20revenue. · That means they did ~370M in online sales in 2019. · ACI had $62.455B in 2019 revenue. · Which means 0.59% of their sales were online. · Working backwards off their Q2’19 revenue of $18.738B, we arrive at $111M in online revenue. · Let’s be conservative and assume some sequential decline from their April online sales growth (the second number you should have remembered) and put Q2 online sales at +220%.
!!!!That means $355M in online sales!!!!
Remember that first number I told you to keep in mind? $331.36M. Considering entirely different data sets were used to find each number, it may not be so crazy to think it could be a pretty accurate forecast of the online sales when they report earnings. But since you’re so smart I know you’re on the edge of your seat wondering what that would mean for their total revenue Let’s take the average of both forecasts, and use $343.18M as our forecast for online revenue. Given online sales were 0.59% of 2019 revenue, it would imply $58.166B in revenue this quarter, compared to the $22.78B street consensus estimate. Admittedly, online sales staying at .59% is unrealistic due to how many consumers would shop online instead of in the store. Here’s some more math to deduce the new percentage: · In 2018, 0.44% of their sales were online · When online sales rose 39% in 2019, the proportion went up to 0.59% · So a 39% increase in online sales led to a 0.15% greater contribution of online sales to total revenue · Therefore a 220% increase would mean a 0.345% increase in proportion of online sales, putting them at .935% of total sales
!!!!!That gives us $36.704B in revenue for this past quarter vs a consensus of just under $22.78B. A beat by over 60%!!!!!
If you’re one of the rare autists to realize that revenue is only one half of the earnings equation, and your costs are the equally as important second half: Let’s go back to our friends at JPM, in a recent research note, after mentioning the foot traffic ACI was taking from KR, they also noted that ACI has superior gross margins to KR, as their stores are strategically located further from aggressively low priced competitors such as Aldi and WalMart. Additionally, they praised ACI’s recent cost savings initiatives that have been underway for some time now, and believe they would lead to some of the best margins in the industry. So you’re telling me ACI is going to make way more money than anyone expects this quarter, while also having lower costs? That must mean call options are crazy expensive, right?? Wrong. The aforementioned option is trading at just $0.50. That means after earnings when the stock rips to $30, they could be worth $11, does a 2,100% return sound good to you too? And for you especially literate autists, the IV is only 91.61%.
ACI 8/21 $20C
Let’s ride this fucker to the moon
Happy to respond to any questions/comments on sources for some of the data I presented or anything else your autistic brain comes up with regarding ACI
PSA for IB investors: TSLA margin rate currently at ~77% due to their Collateral Value Pricing (CVP) policy
TLDR (for real): The CVP margin rate (currently 77.9%) is actually just based on a cap on the $/share you can borrow. Which means the borrowable $ amount will not go down with the price. The cap on $/share is based on how low the stock has been in the last year. CVP = the lowest adjusted average price over 20 consecutive trading days in the past year CVP Margin Rate = Close Price – CVP / Close Price What's important to note here is the nature of this equation. It's very much different from the static margin percentage that is normally applied. With the static (currently 40%) margin rate, when the stock value drops, the amount you can borrow also drops, which obviously is what causes margin calls (or with IB, immediate liquidation :) ). But with CVP, the percent is dependent on the current price. So the rate goes down when the stock goes down. It essentially acts as a CAP on the dollar amount you can borrow. That cap is the CVP which is about $490 per share right now. So you can only borrow $490 per share. If the share price were to drop again, then eventually the CVP rate would drop below the standard rate, and then the actual dollar amount you can borrow against your shares would begin dropping with the share price (like usual). So moral of the story is that the CVP margin rate won't actually cause any unexpected liquidation. It just caps the $/share you can borrow. Got this response direct from IB:
IBKR continually reviews its margin requirements with the objective of striking a balance between reasonable leverage and prudent risk management.The leverage offered on TSLA shares has been reduced due to our Collateral Value Pricing (CVP) policy. The collateral value pricing policy was put in place by IBKR's upper management team and has been completely vetted and reviewed on numerous occasions. As you note, the implementation of the collateral value price (CVP) calculation constrains the amount of margin loan value (MLV) that IBKR is willing to lend to an account based on a new collateral value price (CVP). The purpose of CVP is to protect IBKR from a scenario in which a stock has a run up in price, for which we then allow a client to purchase the stock at the top using the nominal margin rate and the stock subsequently returns to its prior lower price level in a rapid decline. If the descent is greater than the nominal margin interval the potential for loss to IBKR will increase. We seek to set CVP at a level which the stock can reasonably sustain. The current CVP Margin rate for TSLA is approximately 77%. Regards, Frank IBKR Risk Group
Update: They gave me some more information including TSLA's current CVP and how it's used to calculate the CVP margin rate.
IBKR's CVP Margin Policy has been in effect for a number of years. The CVP Margin Rate acts as a delta-based house charge. A net delta is calculated for your entire TSLA position which is multiplied by the CVP margin rate and stock value. This policy is not exclusive to TSLA. It applies to all equities. Current CVP = 493.126 TSLA = 2,235.890 CVP Margin Rate = 77.9% CVP Margin Rate = Close Price – CVP / Close Price. (2,235.890 - 493.126) / 2,235.890 = 77.9%
Update 2: Finally!! They finally explained it!! Why couldn't they just say this to begin with!
The collateral value price is the lowest adjusted average price over 20 consecutive trading days in the past year.
Is /r/pathofexile A Toxic Echo Chamber? Here's Some Data.
EDIT3: Before the post, I will say again, the TITLE IS A BAD JOKE, AND I WOULD CHANGE IT IF I COULD. It is NOT the argument that I'm trying to make, just a meme-y attempt at humor (a bad one). TLDR: Of the 88,000 comments on /pathofexile in the week after Harvest, ~%30 of them were made by the top 500 'power users' Recently, being sick of reading the same shallow and negative feedback on every single post in /pathofexile, and seeing the same usernames come up in every thread, I made a comment on the recent Mod Feedback post. This comment was mostly garbage and THIS DATA DOES NOT SUPPORT THE CLAIM THAT /POE'S NEGATIVE SENTIMENT IS DUE TO A SMALL AMOUNT OF ACCOUNTS POSTING OFTEN. (edited in caps so people aren't confused) This comment said something to the effect of "most of the comments on this subreddit are made by the same users, this isn't anywhere near an accurate representation of the community." I also have made assumptions that the vast majority of readers of this subreddit are lurkers, like most of reddit. I claimed that "If you were to ban the 100 most active reddit users on /pathofexile, the number of comments on this subreddit would drop by a huge margin." After I made that comment, fromcj rightfully called out my lack of supporting data for my claim. Of course, being a thoughtful comment asking for sources, this was downvoted (thanks reddit..... /s). My post, with no support to my claims, was upvoted. In any case, I went and got some data. I used Python, https://pushshift.io/, and the Reddit API
6/19 to 6/26
% of Comments
88,500 comments were made.
The top 500 accounts, sorted by comment count, generated 27313 total comments.
This means 31.37% of all comments on this subreddit with 361,000 subscribers were made by 500 people.
This doesn't account for score/upvotes, simply comment count. Many of the power users on the sub will be upvoted regularly, amplifying this effect even further. (I can't prove this claim, see below for why, just anecdotally true).
This data supports my claim that if you were to ban 100-200 of the most active users on the subreddit, activity would drop significantly.
EDIT: I've removed the list of top posters because people have seemed to fixate on it as some sort of name and shame of toxic accounts. I was hesitant to have it here in the first place, and a number of comments have convinced me it's damaging to the point of this post.
Commentary (NOT the data, these are personal opinions)
There's a lot of power given to a small amount of users on this subreddit. With 361k subscribers and who knows how many more lurkers, being a power user on the subreddit means you have a huge amount of sway when it comes to prevailing opinion. I'm not sure if this is even a problem, or how to fix it. In any case, next time you find yourself holding an opinion you saw on reddit, make sure it's yours too, and not just what the echo chamber has decided is correct for the week. GGG is one of the most active games companies on Reddit, heavily investing in the platform in terms of community manager time. I worry that GGG may, as of late, be making decisions based on community sentiment that isn't entirely accurate. We all know that delirium was buffed into the stratosphere a week into the league and is now easily the most profitable league mechanic to date, completely overshadowing any other content. That was due in large part to sentiment from the community, especially from reddit. I hope GGG doesn't start shifting the focus of PoE away from the hardcore, obtuse, complex looter that many of us enjoy, simply based on community sentiment. Much of the feedback "harvest too hard/tedious, need pack size now, just give us breach 4.0, why can't i craft this mirror-tier item btw i play 2 hrs a month, reforge-league amirite also idk how to trade crafts" has been pushing us this direction.
In this dataset, you may notice that karma/post score doesn't enter into the equation. I really wanted to weight the final percentage based on post score (since higher score means more views and a greater influence on overall sentiment) but unfortunately, pushshift archives reddit's data almost instantly, which means the snapshot of reddit that it ingests will almost always have comments at 1 karma, even if the comment gets more upvotes down the line. Also, tying post karma to top comment would be an interesting avenue to explore (top comments from posts > 30 upvotes get more views than comments from posts with 1-5 upvotes). Furthermore, I wish reddit exposed post views publicly, because tying that data to the comments in the post would give an even more accurate reflection on the impact of sentiment. EDIT 1: Many have taken the title of the post at face value. It was mean to be an ironic tongue in cheek jab, not some serious accusation. I thought that was pretty clear. EDIT 2: I was conflicted about including the list of posters in the first place, and I did because generally people like to see hard data. I don't make any claims about the posters, nor should you make any conclusions. I will say it again: The more active posters of the subreddit are not linked to being negative or toxic, I was simply trying to prove my single statement "If you were to ban the 100 most active reddit users on /pathofexile, the number of comments on this subreddit would drop by a huge margin." EDIT: I recommend everyone read this comment: https://www.reddit.com/pathofexile/comments/hk8gkz/is_rpathofexile_a_toxic_echo_chamber_heres_some/fwroikk/
Margin Isn't Dangerous & Why I'd Still Use It If I Had Less Than $25,000
Cash vs. Margin
TL;DR- Use Margin if you're trading securities and either above or below 25k. If you know how to size positions, it won't matter if you move $4,000 into a trade or $4,000,000. As long as you sized the position correctly. If you're limited to 3 trades, then take 3 PERFECT trades: https://imgur.com/a/SpPOERQ I see lots of people discussing contrasting ideas although they attempt to justify using both. Here are some things I see said and written frequently from people that doesn't add up for me:
"Use a cash account to avoid PDT" - (Totally fine, in some cases such as certain options traders. Not if you're trading securities.)
"Risk 1% of your account" - (So if your account is at $25,500, I risk ~$255 and if I lose 2R I'm below PDT. Doesn't sound too great to me if I were to lose the first 2 straight trades.)
"Margin is a double-edged sword" - (It's only dangerous if you don't set hard stops or size your positions correctly.)
"Never take on a trade that is worth more than your account" - (I can agree if you were swing trading but in terms of IntraDay trading, this is hindering your ability to grow your account. If you're risking $100 on a trade that costs less than your account value.. then $25 on a trade because of your account value.. then you're adding unneeded variables. Remember: "Consistency.")
If I were to go back to when I was below $25,000 some years ago. I'd still use a margin account while being limited to 3 trades per week. Here's why:
Formulas you have to know: Position size formula = Risk ÷ Stop Size Stop Size Formula = Entry - StopLoss
Stock ABC, Entry = $10.00 StopLoss = $9.90 StopSize = 10¢ Risk = $100 In Live Trading: $100 ÷ $0.10 = 1000 Shares 1,000 shares at $10.00 = $10,000 position
Stock XYZ, Entry = $385 StopLoss = $383.00 StopSize = $2.00 Risk = $100 In Live Trading: $100 ÷ $2.00 = 50 Shares 50 shares at $385 = $19,250 position. *$10,000 CASH account: CANNOT trade Stock XYZ and must wait 3 days for his entire account to settle after trading Stock ABC. If it was a margin account, they'd still be able to take 2 more trades this week. *$10,000 MARGIN account: CAN trade Stock XYZ and can trade both scenarios while still able to trade 1 more time in a 5 day rolling period.
Then the next point made is, "Just won't trade anything above $20".
Ok. great rebuttal, but why? Let's remember this: StopSizes aren't always directly correlated to the price of a stock. YES you're more likely to have a wider StopSize on a higher priced stock and a tighter StopSize on a lower priced stock. But remember this: 1¢ of slippage on 1,000 shares is 10% of his risk ($10)... It will be even more slippage if his stop loss market order is hit. Even a Sell-StopLimit order will have slippage within the amount you allow for when you enter a position. Stock XYZ would have to be slipped 20¢ just to equate the amount of slippage on Stock ABC.Highly liquid and available stocks such as AAPL, AMD, NVDA etc don't have 20¢ spreads. Not even 10¢. Rarely 5¢. Most of the time. Just a couple cents. Of course there could be more right out of the open but the spread in my years of experience is tightened within 2 minutes of the open. Yes, these small amounts in pennies do hold lots of merit if you're looking at having any longevity in this business, it WILL add up over the years.
Both trades have the same risk [in perfect world theory].
If both stop market orders were hit (StopLoss). Both traders would exit with a $100 loss on each. Although 1 trade required $10,000 in capital and the other trade required $19,250 in capital. Use margin. If I had to go back to when I had less than $25,000 in my account, I'd still do it the same way I did it with margin. I highly suggest using margin even if you’re limited to 3 trades per week. I get asked all the time when I began trading. If you watched my last video, I showed my first ever deposit with Scottrade (Old brokerage that was bought out by TDA a few years ago) in 2015 although I don't consider that's when I started trading because I didn't treat it the way I do today. I really consider myself starting as a trader in 2017 when I: •Wrote a business plan •Understood statistics •How to research. All this being said, slowly over time I noticed that I am taking less and less trades and increasing my risk size. Why? EV: Expected Value. - Margin has zero negative effect if you're sizing your positions the same every time. Margin allows you to take on more expensive positions that are showing your edge. Bonus: Being limited to 3 trades a week isn't fun, I remember that feeling from years ago. Just remember to take 3 perfect trades a week. Sometimes "Perfect Trades" don't work out in your favor while some subpar situations hit target. Some weeks you might take your 3 "Perfect Trades" by Tuesday. Some weeks you might take only 1 "perfect trade". If you follow my watchlists on Twitter (Same handle as my Reddit), I keep my Day Trading Buying Power transparent. Not always is it growing perfectly linear. And not always am I posting every single day because sometimes, my edge isn't there. Just because the market is open doesn't mean you HAVE to trade. My watchlists aren't littered with 15+ tickers. Rarely do they have more than 7. That may work for other traders, but for me, I demand quality. It's either there or it isn't. No reason to force a trade. I'd rather focus heavily on a few tickers rather than spread myself thin across multiple. Trading isn't supposed to be exhilarating or an adrenaline rush. It can be boring. I said that in the post I wrote back in April. Also if you make money, even if its just $20 in a month. Take that money out and buy something. Shrine it. Cherish it. You ripped that money out of WallStreet. Be proud of it. It takes a lot of courage to do this business. Realize that the P/L is real money. Sometimes even just buying a tank of gas or a book will help you realize that. Spend it from time to time. Get something out of your trading account. You may or not be trading for long, get something that is tangible to always remember the experience in case you don't last. Make it your trophy. That's all I've got for right now. Maybe I'll make another post or 2 before the year ends. I hit my 1 year full-time mark in September. Best wishes! -CJT2013
They say there are two types of traders - investors and speculators - and if you’re not in it for the long haul, you’re basically gambling. After a little over four months on Robinhood, I don’t know that I agree fully with that statement, but I can say that the last two months have definitely felt like playing craps, where the market rolled Teslas and Amazons over and over before finally hitting a seven and resetting the board. The volatility in the market has been insane, but within that chaos is also a path forwards. And for me, that way was forged by using spreads, first credit spreads, and now almost solely debit spreads. But what are spreads, you might ask? To answer, first we need to understand options. In the simplest terms, an option is a contract that says, “I want the ability to do something with this stock by this date.” The “do something” part can consist of buying at a certain price (known as a “call”) or selling at a certain price (known as a “put”). The terms call and put are simply to allow people to distinguish between buying and selling the overlying option. Otherwise, you’d have to say things like, “I’d like to buy a buy of Microsoft” and people would think you’re stuttering. The price that you’re buying or selling the underlying stock is called the “strike”, and the payment that comes from buying or selling the option itself is called the “premium”. And finally, all options are sold in a contract for 100 shares, so whenever you see the price for an option, you’ll have to remember to multiply it by 100 to see the amount you’re paying or getting. So, with this knowledge, something like this: I bought AMZN 7/17 3120C for 7.6K becomes something like this: “I bought an option of Amazon, with an expiration date of 7/17/2020, which allows me to buy 100 shares at $3,120 each, and I paid $7,600 for this ability”. So, that’s what an option is. And options can be bought or sold just like a normal stock, but unlike normal stocks, they can also be opened or closed. Opening and closing options is a far riskier endeavor, and requires Level 3 Options in Robinhood, which you can only get after having made a large enough number of options trade. When you open an option, you’re writing the option that others can then buy or sell, and there are responsibilities and requirements that come along with it. For starters, you have to have collateral, which is to say, you need to have enough cash on hand to cover the entire loss of the option. This is because Robinhood does not allow uncollateralized (otherwise known as uncovered or naked) trades. Secondly, because you’re the one writing the contract for someone else to then buy or sell, the option binds you far more than buying or selling an option normally would, because again, Robinhood treats you as the banker for that option. But you can get around part of these requirements by doing a credit or debit spread, which gets us into spreads. Spreads are when you both buy AND open an option for the same underlying stock, usually at the same expiration date, and almost always for different strike prices. When you do this, you’re in effect hedging your bets, removing risk (and profit) from the equation. There are two main types of spreads - credit spreads and debit spreads - and judicious use allows you to profit from any direction in the stock market. I will go into detail on each of them below. Credit Spreads Credit spreads are made using either a pair of calls or puts. In both cases, the goal is to open an option at a specific strike price, and then buy the option at the next cheapest strike price. For calls, this will be the next-highest strike, and puts will be the next-lowest strike. Done correctly, this creates a net credit on your account, hence the term “credit spread”. This credit is the maximum profit one can attain from this position, while the maximum risk is equal to the difference in the strike prices (which Robinhood will hold as collateral). The breakeven point will be the sold strike price minus the credit you received when you opened the position. Put credit spreads are best used when you have a neutral to positive outlook on a company’s stock, while call credit spreads are used when you have a negative to neutral opinion. If you do both, you’ve created an iron condor, which is a more advanced strategy that can increase your profits, and even sometimes help mitigate a losing trade (when you know what you’re doing). Credit spreads can be risky because the maximum risk is almost always more than the profit margin, but placing the spread well outside of the money can mitigate some of that risk. Debit Spreads Debit spreads are basically the inverse of credit spreads. They are made by opening an option at a specific strike price, and then buying the next-lowest strike (for calls) or next-highest strike (for puts). This will create a debit that you will have to pay to open the position, but in exchange, your maximum risk is capped at the debit you pay. The max profit is the difference between the strikes minus the amount you paid to open the position, and the breakeven point will be the sum of the lower-priced strike plus the amount you paid. Debit spreads are more directional, so a call debit spread works best when you expect the price to go up, and put debit spreads work best when the stock price goes down. You can make a neutral position debit spread, but you will need to place both strikes well in the money (usually at a significant premium for a very small profit), making the overall position very risky. And those are the two main types of spreads. Iron condors and butterflies are just combinations of credit and debit spreads, while the other trading strategies (like strangles and straddles) are really just buying a combination of options.
Occasionally people ask how these loans work. With that in mind: from the Canadian prairie on a beautiful day in July, to you: First, if you're from the U.S.: I'm doing this from a Canadian perspective which means I'm ignoring the Regulation T, special memorandum account, overnight maintenance requirement, and initial margin, because all of those are concepts that have no equivalent or application in Canada. But the basics are the same. You can ignore all of those concepts because they have no bearing on how margin actually works. Those concepts are simply restrictions in how you can use margin and as a practical matter they're not onorous restrictions. I'm also ignoring U.S. risk-based "portfolio margin" because that's a specialized, alternative margin system some brokers offer in the U.S., that we don't have in Canada. We have traditional, rules-based margin that hasn't changed in Canada in 100+ years. Note: If you are a Canadian resident buying U.S. stock in Canada you still fall under the Canadian rules for margin. Margin in Canada hasn't really changed since the 1900's, except you have to put up at least 30% nowadays instead of 10% as it was back before the crash of 1929. Basically that's the only thing that's changed. In Canada you can borrow up to 70% of a position at once for most stocks. This means that if you want to buy $10,000 worth of RBC or Apple, you only have to put up $3,000 and your broker lends you the rest. Margin was first developed in the Netherlands which basically invented the modern financial system we have today in the West, back in the 1600s. The Dutch East India corporation (ticker VOC) was at one point 20% of the world's total commerce. That would be like a company in 2020 grossing about 16 trillion US a year. By comparison Apple brings in about one half of one percent of that. The Amsterdam stock market developed just to trade VOC and other shares and related securities. Seein the success of their Continental rivals, the British copied the Dutch and for a long time, until after the Battle of Waterloo, the western world had two rival financial capitals, London, and Amsterdam. For various historical reasons, Amsterdam got pushed out of the picture and for about 100 years the City of London (which is what the financial district in London is called) was the financial capital of the west. They of course now share that crown with New York City. But it's really the Dutch who started it all, around the time of Vermeer. *** The concept is that the bank (or broker) will lend against some of your stock, but not all of it. They want a "haircut." The haircut is the amount they won't lend against. In Canada the haircut is usually 30% but can be 50% and there are some stocks the banks won't lend against at all, like most of the stuff on the TSX-V or on the U.S. pink sheets. Every bank is different, so BMO InvestorLine might want 50% on one company and Interactive Brokers Canada might want 30% or vice versa for another. But most things are 30%, some are 50% and some are 100% (meaning no loan). The maximum available leverage is 1/haircut. If the haircut is 30% as is typical in Canada, the bank will let you buy up to 1/0.3 = 3 1/3 as much as your cash, meaning, you can borrow up to 2 1/3 dollars for every dollar you put up. That's the limit. But: So say you have $3,000 and you want to buy on margin. As the bank haircut (margin rate) is 30%, you can buy $3,000/0.3 = $10,000 worth of stock. Obviously you then have a loan of $7,000. You now have $10,000 worth of stock, but remember, the bank won't let you borrow against 30%*$10,000 = $3,000. So your collateral is only $7,000. So you now have a $7,000 loan collateralized by $7,000 worth of stock. In the above example, you put up 30% margin, the same as the haircut. It's easy to see that if your total position slides so much as a dollar, you will have less collateral than $7,000 and therefore get what's called a "margin call" where they will tell you that you have to put up more money in a few hours or sell stock (which automatically pays down the loan to the extent of the sale) so that you have enough collateral to cover your loan, otherwise they will automatically sell a stock of their choosing at an amount of their choosing. They are also allowed to sell whichever stock they choose automatically without calling you first, in the event of a margin call. That is explicitly set out in your margin agreement. There have been at least two challenges to that in the Ontario courts in the last 20 years or so, where the former client argued that the bank sold their shares out without first advising them, or, in one of the court cases, after promising to hold off so that the client could put up money, and then reneging on that and selling the client's stock anyway. The court in both cases sided with the bank. The margin is for real, not negotiable, it is there to protect the bank and the other client's capital, and the words "the bank can sell at any time and without prior notice" mean what they say they mean. If you get sold out at a loss, don't expect the courts to give you redress. So obviously you need some "buffer" because of volatility, but how much do you borrow? Now you have to understand some more math. target margin = 1-(1-x)*(1-haircut) x is the price drawdown target margin is how much margin you have to put up. Say Apple is marginable at 30% (the haircut) by your bank. You decide you want to borrow on margin. But you decide, "I will allow Apple to slide 40% from what I buy it at before I get a margin call." So how much margin should you put up? target margin = 1-(1-0.4)*(1-0.3) = 1-0.6*0.7 = 1-0.42 = 0.58. So you have to put up 58% margin. That means if you have $3,000 to invest, you would buy $3,000/0.58 = $5,172 worth of Apple. If Apple is trading at $350 that means it can slide to $210 before you get a margin call. At which point you will have lost 0.4/0.58 = 68.9% of your money. (Remember, leverage is simply 1/margin.) You can convince yourself by working through it as a check. In the example, as you had $3,000 and you margined that at 58%, you bought $3,000/0.58 = $,5172 worth of stock. Obviously your equity at the time of purchase was be $3,000 because you owned $5,172 worth of stock and owed the bank $2,172. Because of the haircut, 0.3*$5,172 = $1,551 could not be used as collateral. Then the stock slid 40%, from $350 to $210, so your total stock position was then (1-0.4)*$5,172 = $3,103. Of course, you still owed the bank $2,172. But remember, not all of the $3,103 was available be used as collateral, only 70% (meaning, 1-haircut) of that. So at $210 your collateral was (1-0.3)*$3,103 = $2,172, exactly the same as the loan amount. $210 was, therefore, the lowest price at which you still have sufficient collateral. Anything less and you would have received a margin call or the bank would simply have automatically sold stock, depending on how they saw the risk. Key takeaway here is that the haircut is 30%, meaning that 30% of your stock cannot be used as collateral, which mathematically also means that your account equity/total amount of stock = (total amount of stock-loan)/(total amount of stock) has to stay at or above 30%. You're putting up 58%, meaning you're borrowing 1/0.58 - 1 = 72 cents from the bank for every dollar of your own money that you put up. The formula above is simply a rearrangement using basic algebra, of the basic margin equation which is: price at margin call = initial price of stock*(1-target margin)/(1-haircut) Whatever you do, make sure you are maxing out your TFSA or possibly RRSP or possibly both before you use margin, or only contribute a small amount of capital to a margin account and make sure your TFSA or RRSP is your main stock investment vehicle. Do not put up your TFSA as collateral on a margin account. You could end up getting a margin call, then the broker transfers the TFSA over to the margin account, but then the stock market slides again and now your TFSA is wiped out along with your margin account. Questrade offers this and I think it's an absolutely terrible idea. Frankly I think the CRA should disallow it. Notice how none of the banks offer this. Also have a plan for a margin call. You will get a margin call at some point. One good plan is simply to sell enough stock to pay off the margin loan and then re-enter margin when conditions warrant. It makes absolutely no sense to have cash lying around to meet a margin call. Why not just invest the cash and not use margin. The old adage is, "Never meet a margin call" and I think that's good advice. If the bank gives you to choice of either putting in more money in or selling, then sell. To me there are only 3 reasons you would use a margin account:
You have a large account in a diversified stock portfolio and you want to borrow against say 5% of that to go and buy a car, renovate your house, pursue an investment other than securities;
You are consistently good at beating the stock market by a significant amount, and you have maxed out or at least significantly contributed to a TFSA or RRSP or have other wealth-generating property, you have a well-thought out plan that you commit to, that governs your trading decisions, how much you will borrow, and what you will do in the event of a margin call;
You are executing certain trades that require a margin account; for example, options spreads, short selling stocks or commodity futures trades.
To me the following are bad reasons to trade on margin:
It looks like a way to make even more money in stocks, even though you don't know how to make money in stocks;
You are a diversified "Canadian Couch Potato" -style investor getting more or less average returns and you realize that you can buy stock get a 5% dividend yield and pay 4% pre-tax on margin money, so you decide to be a margined "couch potato."
Margined investing = active investing = checking your positions at least daily and following a trading plan. Finally, the average investor working with average capital should always, always, make the TFSA their #1 priority. The TFSA is truly a gem. When I was in my 20's back in the 90's, the only tax shelters for the average Canadian were the sale of their primary residence and the RRSP, the latter which is a deferral and a deduction but not an outright break the way the TFSA is. The TFSA offers leverage effectively equal to the capital gains inclusion rate * your average taxation rate, and yet without a margin call and at zero percent and it doesn't even magnify your losses. No margin account can match that. Some investors don't believe in margin at all. Like Warren Buffett, who said in a 2018 CNBC interview, "It's crazy to borrow against securities." (Note he said borrowing against stocks, not borrowing to buy stocks.) But he is right in saying that the bad thing about margin is that it gives you limited additional potential upside but at the cost of great potential downside. Understand the risks. Read your margin agreement. Consider even meeting with a securities lawyer who can explain the agreement to you. Consider this statement from an article posted on a popular stock investing website (Fair dealing exception), posted March 15th, 2020: " https://www.fool.com/investing/2020/03/15/5-ugly-lessons-from-a-nasty-margin-call.aspx From its close on Feb. 19 to its close on March 12, theS&P 500fell more than 26%, a huge decline in less than a month. Like many investors who had been using options in a margin account, I faced a margin call during that precipitous decline and was forced to liquidate positions to satisfy that call. Note that despite facing that margin call, I never actually borrowed money from my broker. I just had margin available and usable from a purchasing power perspective in the event some of my options got exercised against me. It didn't matter to my broker, though, who only saw the margin math, rather than the cash and investment-grade bonds that were also in that account and hadn't seen their values evaporate. Unfortunately, my experience during that margin call revealed some very ugly realities about how Wall Street really works, particularly when it comes to retail investors. " He goes on set out "lessons learned." None of those lessons learned is "read your margin agreement before you trade." So he didn't really learn his lesson. Anyway, it's up to each person to do what is right for them, bearing in mind the risks. But know the risks. Trading with margin doesn't mean you'll be wiped out, but if you trade anything you need to know what you're doing and that is even more important if you've agreed to borrow money. The post here was to explain how to do the calculations for this popular and important financial tool as there is a lot of misinformation out there on the subject, make some suggestions on how you can use it as a part of your overall portfolio, and give my opinions on how one might do that. Whichever road or roads you take, good investing. For more details on the TFSA and its contribution rules, see https://www.reddit.com/CanadianInvestocomments/hcy9r9/how_the_tfsa_works/
Power REIT -- Stock analysis and Value Investors Club application
This is my Value Investors Club application on Power REIT. Tell me what you think. Power REIT is a real estate trust with investments in solar, railroad, and newly in medical cannabis greenhouses. Thesis:Power REIT (PW) is the best way to invest in the cannabis area without the traditionally binary hit or miss nature of emerging industries.PW is anchored by a portfolio of traditional properties allowing it to more safely and at lower cost invest in cannabis assets.PW earns a return on invested capital (ROIC) in great excess of the cost of capital. Return of 12%-19% in new properties, recently issued bonds at 4.62%.PW is under valued despite a seemingly rich market price because of probable massive increase in revenue, earnings, and funds from operation (FFO).The margin of safety is significant. Significant Assets:6 Controlled Environment Agriculture greenhouse facilities aggregating over 131,00 square feet7 solar farm ground leases totaling 601 acres112 miles of railroad propertyApprox. $10 mil. cash Significant Liabilities:Approx. $24 mil. Long term debt at interest rates less than or equal to 5%Major debt: $15,500,000 at 4.62% fully amortizing, maturing in 2054Maturities as follows:2021 $635,5022022 $675,3742023 $1,168,2972024 $715,7772025+ $21,208,698Preferred stock: 144,636 shares of 7.75% Cumulative Redeemable Perpetual Preferred Stock, at $25. General info:Power REIT is currently pursuing investment in what they call controlled environment agriculture or CEA, essentially greenhouses. PW seeks out strictly medical cannabis producers who for whatever reason need additional financing, they then purchase the real estate they own and lease it back to them, and at times help with financing of construction. PW is one of the few ways for cannabis producing companies to get any sort of financing as federally it is still illegal and banks are weary. This gives PW lots of negotiating power in deal making, and that is why they can for example, buy and finance a 5.2 acre CEA property in southern Colorado for around $1 Mil. and get a straight lined rent of $192,000 equating to around a 19% FFO yield. These properties and tenants are of greater quality than the typical cannabis operation, remember they require tenants to maintain a medical cannabis producers license in the lease. That is a key for PW, this is not a speculative cannabis play that is dependent on federal legalization, on the contrary, a lease they have in a Maine property includes the clause that states that "After the deferred-rent period, rent is structured to provide a 12.9% return based on the original invested capital amount with annual rent increases of 3% rate per annum. At any time after year six, if cannabis is legalized at the federal level, the rent will be readjusted down to an amount equal to a 9% return on the original invested capital amount and will increase at a 3% rate per annum based on a starting date of the start of year seven." PW is partly a play against the federal legalization. On the topic of debt:A company with a market cap of under $50 mil with about $24 mil in debt might seem a little risky, but here is where the stability from the solar and rail assets comes in. Their existing FFO from those two asset classes is a little over $1 mil while the debt payments with exception of 2023 don't exceed $1 mil for the foreseeable future. So as long as they don't issue new debt in an uncharacteristically bad way PW will have no solvency issues. Management:Management is skill-full. The CEO David Lesser is pretty much for all intents and purposes the whole company, he is the sole full time employee. He is excellent in terms of real estate expertise. It is very clear he knows his stuff. He has a long history in real estate and more specifically in renewable/clean energy real estate. Lesser is also the chairman of the board, and the largest shareholder. He gets paid exclusively in various forms of equity. His interests are aligned with owners interests. Insider ownership is around 30%, very high for a REIT. Lesser is also key on avoiding share dilution as stated, and in practice unlike many REITs. There have been no share dilutions besides management's compensation plan. The major recent financing was the 2019 bond issuance. Relative PricingFor this section I will refer to Innovative Industrial Properties (IIPR) another publicly listed REIT that invests in cannabis assets. IIPR invests in a wider range of assets like retail not just CEA. I am much more suspicious of IIPR's real estate and management. There have been many questions raised about the quality of real estate and solvency of tenants. The CEO seems sleazy and they constantly dilute shareholders. I think PW is superior in terms of intangibles and tangibles. IIPR is PW only publicly traded comparable. IIPR has grown FFO per share 133% for the MRQ YoY. PW has grown FFO per share 107% over the same time. PW only started investing in high return CEA in late 2019, and engage in more conservative financing, so the difference in growth rates is marginal. IIPR is currently being priced at around 19.1 times forward 12 months FFO.PW is priced at only 14 times forward 12 months FFO. (If management's most basic expectations are met)In terms of relative price PW, if it sold at the 19.1 multiple it would be selling for $32.4 which I still think could yield an above market rate of return over time. ValuationI believe PW to be the type of business that the market undervalues because of high uncertainty but low risk. The high uncertainty comes from not knowing how much management will want to grow and raise capital, will management continue to use safe amounts of leverage, will new financing options become available to cannabis companies etc. The low risk comes from the fact that PW has very low risk of going to 0 or even decreasing substantially in share price because of the current safety in investment return and diversification. I'll put a floor as to what I think a low risk price is. Let's say base case scenario over the next year PW invests the existing $10 mil. in cash at a yield of 12.5% (below the usual yield of around 18%), doesn't raise any additional capital, and lease payments are collected and debts paid as scheduled. PW FFO per share would be about $0.45 per quarter. If they trade at an P/FFO multiple of 20 (PW currently trades at 27) that makes the price $36 per share. However, I do think capital will be raised, management has expressed interest in doing so. In that case the strong ROIC and high cash flow would give PW a high ceiling to grow as far as macroeconomic and market conditions allow.
Share price increases when new real estate acquisitions are announced. Eventual dividend. PW currently pays no dividend because the preferred has satisfied the REIT return of capital requirement recently, however with income rising 100%. It is likely a dividend will be coming soon and that will attract more attention. Continued performance and time. Edit: as a disclaimer, I am Obviously long PW
Hi everyone, this is my first ever post here. I run a little website called The Thought Experiment where I talk about various issues, some of them Singapore related. And one of my main interests is Singaporean politics. With the GE2020 election results, I thought I should pen down my take on what us as the electorate were trying to say. If you like what I wrote, I also wrote another article on the state of play for GE2020 during the campaigning period, as well as 2 other articles related to GE2015 back when it was taking place. If you don't like what I wrote, that's ok! I think the beauty of freedom of expression is that everyone is entitled to their opinion. I'm always happy to get feedback, because I do think that more public discourse about our local politics helps us to be more politically aware as a whole. Just thought I'll share my article here to see what you guys make of it :D Article Starts Here: During the campaigning period, both sides sought to portray an extreme scenario of what would happen if voters did not vote for them. The Peoples’ Action Party (PAP) warned that Singaporeans that their political opponents “might eventually replace the government after July 10”. Meanwhile, the Worker’s Party (WP) stated that “there was a real risk of a wipeout of elected opposition MPs at the July 10 polls”. Today is July 11th. As we all know, neither of these scenarios came to pass. The PAP comfortably retained its super-majority in Parliament, winning 83 out of 93 elected MP seats. But just as in GE2011, another Group Representation Constituency (GRC) has fallen to the WP. In addition, the PAP saw its vote share drop drastically, down almost 9% to 61.2% from 69.9% in GE2015. Singapore’s electorate is unique in that a significant proportion is comprised of swing voters: Voters who don’t hold any blind allegiance to any political party, but vote based on a variety of factors both micro and macro. The above extreme scenarios were clearly targeted at these swing voters. Well, the swing voters have made their choice, their roar sending 4 more elected opposition MPs into Parliament. This article aims to unpack that roar and what it means for the state of Singaporean politics going forward. 1. The PAP is still the preferred party to form Singapore’s Government Yes, this may come across as blindingly obvious, but it still needs to be said. The swing voter is by its very definition, liable to changes of opinion. And a large factor that determines how a swing voter votes is their perception of how their fellow swing voters are voting. If swing voters perceive that most swing voters are leaning towards voting for the opposition, they might feel compelled to vote for the incumbent. And if the reverse is true, swing voters might feel the need to shore up opposition support. Why is this so? This is because the swing voter is trying to push the vote result into a sweet spot – one that lies between the two extreme scenarios espoused by either side. They don’t want the PAP to sweep all 93 seats in a ‘white tsunami’. Neither do they want the opposition to claim so much territory that the PAP is too weak to form the Government on its own. But because each swing voter only has a binary choice: either they vote for one side or the other (I’m ignoring the third option where they simply spoil their vote), they can’t very well say “I want to vote 0.6 for the PAP and 0.4 for the Opposition with my vote”. And so we can expect the swing voter bloc to continue being a source of uncertainty for both sides in future elections, as long as swing voters are still convinced that the PAP should be the Government. 2. Voters no longer believe that the PAP needs a ‘strong mandate’ to govern. They also don’t buy into the NCMP scheme. Throughout the campaign period, the PAP repeatedly exhorted voters to vote for them alone. Granted, they couldn’t very well give any ground to the opposition without a fight. And therefore there was an attempt to equate voting for the PAP as voting for Singapore’s best interests. However, the main message that voters got was this: PAP will only be able to steer Singapore out of the Covid-19 pandemic if it has a strong mandate from the people. What is a strong mandate, you may ask? While no PAP candidate publicly confirmed it, their incessant harping on the Non-Constituency Member of Parliament (NCMP) scheme as the PAP’s win-win solution for having the PAP in power and a largely de-fanged opposition presence in parliament shows that the PAP truly wanted a parliament where it held every single seat. Clearly, the electorate has different ideas, handing Sengkang GRC to the WP and slashing the PAP’s margins in previous strongholds such as West Coast, Choa Chu Kang and Tanjong Pagar by double digit percentages. There is no doubt from the results that swing voters are convinced that a PAP supermajority is not good for Singapore. They are no longer convinced that to vote for the opposition is a vote against Singapore. They have realized, as members of a maturing democracy surely must, that one can vote for the opposition, yet still be pro-Singapore. 3. Social Media and the Internet are rewriting the electorate’s perception. In the past, there was no way to have an easily accessible record of historical events. With the only information source available being biased mainstream media, Singaporeans could only rely on that to fill in the gaps in their memories. Therefore, Operation Coldstore became a myth of the past, and Chee Soon Juan became a crackpot in the eyes of the people, someone who should never be allowed into Parliament. Fast forward to today. Chee won 45.2% of the votes in Bukit Batok’s Single Member Constituency (SMC). His party-mate, Dr. Paul Tambyah did even better, winning 46.26% of the votes in Bukit Panjang SMC. For someone previously seen as unfit for public office, this is an extremely good result. Chee has been running for elections in Singapore for a long time, and only now is there a significant change in the way he is perceived (and supported) by the electorate. Why? Because of social media and the internet, two things which the PAP does not have absolute control over. With the ability to conduct interviews with social media personalities as well as upload party videos on Youtube, he has been able to display a side of himself to people that the PAP did not want them to see: someone who is merely human just like them, but who is standing up for what he believes in. 4. Reserved Election Shenanigans and Tan Cheng Block: The electorate has not forgotten. Tan Cheng Bock almost became our President in 2011. There are many who say that if Tan Kin Lian and Tan Jee Say had not run, Tony Tan would not have been elected. In March 2016, Tan Cheng Bock publicly declared his interest to run for the next Presidential Election that would be held in 2017. The close result of 2011 and Tan Cheng Bock’s imminent candidacy made the upcoming Presidential Election one that was eagerly anticipated. That is, until the PAP shut down his bid for the presidency just a few months later in September 2016, using its supermajority in Parliament to pass a “reserved election” in which only members of a particular race could take part. Under the new rules that they had drawn up for themselves, it was decreed that only Malays could take part. And not just any Malay. The candidate had to either be a senior executive managing a firm that had S$500 million in shareholders’ equity, or be the Speaker of Parliament or a similarly high post in the public sector (the exact criteria are a bit more in-depth than this, but this is the gist of it. You can find the full criteria here). And who was the Speaker of Parliament at the time? Mdm Halimah, who was conveniently of the right race (Although there was some hooha about her actually being Indian). With the extremely strict private sector criteria and the PAP being able to effectively control who the public sector candidate was, it came as no surprise that Mdm Halimah was declared the only eligible candidate on Nomination Day. A day later, she was Singapore’s President. And all without a single vote cast by any Singaporean. Of course, the PAP denied that this was a move specifically aimed at blocking Tan Cheng Bock’s bid for the presidency. Chan Chun Sing, Singapore’s current Minister of Trade and Industry, stated in 2017 that the Government was prepared to pay the political price over making these changes to the Constitution. We can clearly see from the GE2020 results that a price was indeed paid. A loss of almost 9% of vote share is very significant, although a combination of the first-past-the-post rule and the GRC system ensured that the PAP still won 89.2% of the seats in Parliament despite only garnering 61.2% of the votes. On the whole, it’s naught but a scratch to the PAP’s overwhelming dominance in Parliament. The PAP still retains its supermajority and can make changes to the Constitution anytime that it likes. But the swing voters have sent a clear signal that they have not been persuaded by the PAP’s rationale. 5. Swing Voters do not want Racial Politics. In 2019, Heng Swee Keat, Singapore’s Deputy Prime Minister and the man who is next in line to be Prime Minister (PM) commented that Singapore was not ready to have a non-Chinese PM. He further added that race is an issue that always arises at election-time in Singapore. Let us now consider the GE2015 results. Tharman Shanmugaratnam, Singapore’s Senior Minister and someone whom many have expressed keenness to be Singapore’s next PM, obtained 79.28% of the vote share in Jurong GRC. This was above even the current Prime Minister Lee Hsien Loong, who scored 78.63% in Ang Mo Kio GRC. Tharman’s score was the highest in the entire election. And now let us consider the GE2020 results. Tharman scored 74.62% in Jurong, again the highest scorer of the entire election, while Hsien Loong scored 71.91%. So Tharman beat the current PM again, and by an even bigger margin than the last time. Furthermore, Swee Keat, who made the infamous comments above, scored just 53.41% in East Coast. Yes, I know I’m ignoring a lot of other factors that influenced these results. But don’t these results show conclusively that Heng’s comments were wrong? We have an Indian leading both the current and future PM in both elections, but yet PAP still feels the need to say that Singapore “hasn’t arrived” at a stage where we can vote without race in mind. In fact, this was the same rationale that supposedly led to the reserved presidency as mentioned in my earlier point. The swing voters have spoken, and it is exceedingly clear to me that the electorate does not care what our highest office-holders are in terms of race, whether it be the PM or the President. Our Singapore pledge firmly states “regardless of race”, and I think the results have shown that we as a people have taken it to heart. But has the PAP? 6. Voters will not be so easily manipulated. On one hand, Singaporeans were exhorted to stay home during the Covid-19 pandemic. Contact tracing became mandatory, and groups of more than 5 are prohibited. But on the other hand, we are also told that it’s absolutely necessary to hold an election during this same period, for Singaporeans to wait in long lines and in close proximity to each other as we congregate to cast our vote, all because the PAP needs a strong mandate. On one hand, Heng Swee Keat lambasted the Worker’s Party, claiming that it was “playing games with voters” over their refusal to confirm if they would accept NCMP seats. But on the other hand, Heng Swee Keat was moved to the East Coast GRC at the eleventh hour in a surprise move to secure the constituency. (As mentioned above, he was aptly rewarded for this with a razor-thin margin of just 53.41% of the votes.) On one hand, Masagos Zulkifli, PAP Vice-Chairman stated that “candidates should not be defined by a single moment in time or in their career, but judged instead by their growth throughout their life”. He said this in defense of Ivan Lim, who appears to be the very first candidate in Singaporean politics to have been pushed into retracting his candidacy by the power of non-mainstream media. But on the other hand, the PAP called on the WP to make clear its stand on Raeesah Khan, a WP candidate who ran (and won) in Sengkang GRC for this election, stating that the Police investigation into Raeesah’s comments made on social media was “a serious matter which goes to the fundamental principles on which our country has been built”. On one hand, Chan Chun Sing stated in 2015, referring to SingFirst’s policies about giving allowances to the young and the elderly, “Some of them promised you $300 per month. I say, please don’t insult my residents. You think…. they are here to be bribed?” On the other hand, the PAP Government has just given out several handouts under its many budgets to help Singaporeans cope with the Covid-19 situation. [To be clear, I totally approve of these handouts. What I don’t approve is that the PAP felt the need to lambast similar policies as bribery in the past. Comparing a policy with a crime is a political low blow in my book.] I could go on, but I think I’ve made my point. And so did the electorate in this election, putting their vote where it counted to show their disdain for the heavy-handedness and double standards that the PAP has displayed for this election. Conclusion I don’t say the above to put down the PAP. The PAP would have you believe that to not support them is equivalent to not wanting what’s best for Singapore. This is a false dichotomy that must be stamped out, and I am glad to see our swing voters taking a real stand with this election. No, I say the above as a harsh but ultimately supportive letter to the PAP. As everyone can see from the results, we all still firmly believe that the PAP should be the Government. We still have faith that PAP has the leadership to take us forward and out of the Covid-19 crisis. But we also want to send the PAP a strong signal with this vote, to bring them down from their ivory towers and down to the ground. Enough with the double standards. Enough with the heavy-handedness. Singaporeans have clearly stated their desire for a more mature democracy, and that means more alternative voices in Parliament. The PAP needs to stop acting as the father who knows it all, and to start acting as the bigger brother who can work hand in hand with his alternative younger brother towards what’s best for the entire family: Singapore. There is a real chance that the PAP will not listen, though. As Lee Hsien Loong admitted in a rally in 2006, “if there are 10, 20… opposition members in Parliament… I have to spent my time thinking what is the right way to fix them”. Now, the PAP has POFMA at its disposal. It still has the supermajority in Parliament, making them able to change any law in Singapore, even the Constitution at will. We have already seen them put these tools to use for its own benefit. Let us see if the PAP will continue as it has always done, or will it take this opportunity to change itself for the better. Whatever the case, we will be watching, and we will be waiting to make our roar heard once again five years down the road. Majulah Singapura! Article Ends Here. Here's the link to the actual article: https://thethoughtexperiment.org/2020/07/11/ge2020-the-roar-of-the-swing-vote And here's the link to the other political articles I've written about Singapore: https://thethoughtexperiment.org/2020/07/07/ge2020-the-state-of-play/ https://thethoughtexperiment.org/2015/09/10/ge2015-voting-wisely/ https://thethoughtexperiment.org/2015/09/05/expectations-of-the-opposition/
[GUIDE] 33 Gampley Tips and Tricks for New and Veteran 75-cap FFXI Players
Hey everyone, this'll be a long post. I started this out as a script for a Youtube video but I don't have the time anymore to continue recording and editing it so I decided to adapt it into a Reddit post here so that it doesn't get lost. This is going to be geared towards both returning and seasoned players in the FFXI private server scene and is going to be pretty general so that it is applicable regardless of which server you choose to play on (for the most part). So, here it is, 33 gameplay tips and tricks for 75-cap FFXI servers:
1. Signet Accuracy and Evasion
Tip one: while it is widely understood that Signet gives you conquest points and crystals when fighting, did you know that Signet also gives you accuracy and evasion when fighting monsters that are the same level or lower level than you? You will gain these bonuses when fighting a monster that checks as TW/EP/DC/EM. This only applies to the target you are currently engaged with and gives a bonus of 15 evasion and 15 defense. You can see this yourself if you open your character sheet in the equipment menu and checking your defense before and after engaging a monster while having Signet on. This will only apply to Signet and not to the ToAU or WotG equivalents: Sanction or Sigil.
2. Spend your CP
For tip #2, speaking of conquest points, don't forget to spend them. This is an extra boost of income for newer players that you get pretty much for free since you'll getting EXP anyway. When you start out you'll be rank 1 and the rank 1 items are not that great. I'd recommend doing the rank missions to get to rank 2 pretty quickly, you can do them at level 10 pretty easily for every nation. The rank 2 items cost 2000 conquest points and the most desirable ones from each nation tend to be W: Merc. Knife (conquest ranking 2nd+ place) W: Merc. Hachimaki B: Decurion's Shield (conquest ranking 1st place) B: Decurion's Dagger (conquest ranking 2nd+ place) S: Royal Spearman's Spear S: Royal Spearman's Horn (conquest ranking 2nd+) but be sure to visit the auction house to check the going rate for all of the point items available to you and make the decision what will net you the most gil OR if you see something that you like for your job you can spend points and keep it. When you get to rank 3 later it will open up more items to spend points on (like the desirables: M.C. Belt, Cent. Sword, R.S. Mufflers) so definitely keep that in mind. If you do not know where to spend your points, it's the same NPCs that give you signet, the guards in your home nation that stand at the gates to the wilderness areas. If you ever want to reference the conquest point item lists without having to be at the gate, the following wiki pages will help you out: https://ffxiclopedia.fandom.com/wiki/Windurst_Conquest_Points_Items https://ffxiclopedia.fandom.com/wiki/Bastok_Conquest_Points_Items https://ffxiclopedia.fandom.com/wiki/San_d'Oria_Conquest_Points_Items
3. +2 Accuracy = +1% Hit Rate
During the first tip I mentioned an accuracy boost for having Signet on. If you do not know how accuracy works, every +2 accuracy is 1% hit rate bonus. Every 1 point of evasion your target has is -1 accuracy for you. When accuracy and evasion are exactly equal, the attacker has a 75% chance to hit the target. If an attacker has 110 accuracy and his target has 100 evasion, the chance to hit is 80%. Every level difference between two entities is also + or - 2% hit rate. For example, if you are fighting a monster 5 levels above you, you take a -10% hit rate penalty down to 65% rate if acc and eva are equal. This should give more clarity on what an item does when you come by it and see the the accuracy or evasion stat on it. For example, on the very popular Battle Gloves when you see the +3 accuracy and +3 evasion stats on it, it should come to mind now that what these gloves are giving you is +1.5% hit rate against monsters and -1.5% hit rate for the monsters against you. This should also give clarity on why it feels like Incredibly Tough (IT) monsters can feel so evasive in EXP parties. At the lower levels, monsters that check as IT in EXP camps are typically about 7-10 levels above your party. I'm going to use the number 8 as an easy, round number to work with... what this means is that before accuracy and evasion are even considered, your base hit rate against an EXP party mob post-level-penalty is going to be about 75% - 8*2% or 59%. That's not a great rate at all and the only significant way to compensate for it is to build up your accuracy stat. This is why accuracy is so important in EXP groups. There is a hard floor and hard cap to any player or monster's hit rate. The minimum possible hit rate is 20% and the maximum is 95%. Getting a metric on what your hitrate is during a fight can be done using the Deeps plugin which will be discussed more in tip 12.
4. STR, DEX and AGI affect combat stats
For this tip, some of the core stats affect your combat stats. STR affects attack. Every point of STR is +0.5 attack for one-handed weapons and +0.75 attack for two-handed weapons (this two-handed setting may differ from server to server but this is the most popular setting). Every point of DEX is +0.5 accuracy for one-handed weapons and 0.75 accuracy for two-handed weapons. Every point of AGI is +0.5 evasion. A good example of these stats in action is in the item Emperor Hairpin which has +3 DEX, +3 AGI and +10 evasion: For one-handed users, the total bonuses work out to be: +1.5 Accuracy (this is +0.75% hit rate!) +11.5 Evasion (remember, this is the native +10 but with the AGI bonus factored in as well) For two-handed users: +2.25 Accuracy (this is +1.125% hit rate!) +11.5 Evasion Now, since +4 DEX/AGI = +2 acc/eva = +/- 1% hit rate, then, transitively, you can think of every 4 DEX equalling +1% hit rate and every 4 AGI equalling -1% hit rate for your target against you. Another thing to note is that your 3-letter stats are often modifiers for weapon skills and that DEX is a modifier for Thief's Trick Attack (+1 DEX = +1 flat damage for TA if THF is main job) and AGI is a modifier for Thief's Sneak Attack (+1 AGI = +1 flat damage for SA if THF is main job). Each weapon skill has its own stat ratios which can be found individually on the wiki. For example, Fast Blade has a 20% modifier on both STR and DEX so if you have 40 STR and 50 DEX, you are getting 40*0.2+50*0.2 which is a +18 DMG stat bonus added onto the DMG listed on your weapon for the damage calculation of this skill. The application of these stats for magical weapon skills works a bit differently and will not be covered here. Take note that there is an "oldid" in the URL linked for Fast Blade on the wiki. With the release of Adoulin, all weapon skill modifiers were changed which is outside the scope of 75-cap... so to get accurate information you'll need an older version of the wiki page. More on that in a minute. In addition to aaaaalll this, STR in particular has one more bonus and applies to all physical weapon skills: every +4 STR is equal to +1 weapon damage for weapon skill and normal attack calculation. This, on top of the fact that STR also gives +attack and is very frequently listed on weapon skills as their modifier, is the main reason that the strategy of stacking absurd amounts of STR is so popular when you get to higher levels. At this point I don't think anyone needs to guess to figure out which stat was SE's special favorite. As a disclaimer, this mechanic is a bit more nuanced than +4 STR = +1 DMG and there is a cap to this bonus based on your weapon rank but for new and intermediate players... don't worry about it too much. If you want to read more on it, the article is here. In conclusion, STR = damage, DEX = accuracy. For ranged attacks, it's STR = ranged damage, AGI = ranged accuracy. Notice it is AGI instead for ranged weapon accuracy. This is why you'll often see rangers wearing a pair of Drone Earrings. That combined +6 AGI is equating to +1.5% to ranged hit rate and +1.5 to Sidewinder's weapon damage calculation (that WS has a 25% AGI modifier) which is really good for ear-slot equipment.
5. FFXI Wiki
Tip number 5 is going to be your most valuable resource on Final Fantasy XI information for quests, items, missions, maps, monsters, just about everything. You can visit FFXIclopedia (often referred to as the wiki) and type whatever article you need into the search bar at the top right. Whenever you run into a roadblock and find yourself stuck on anything in the game chances are the wiki will be able to help you. The best feature of the wiki that you will be utilizing constantly is the History button which will let you see a snapshot of any page from past edits. The History button can be found at the far right in a drop down right next to Edit, see this picture if you can't find it. From there, pick the revision you need (refer to following paragraph). At the bottom you can change the view to show 500 entries at a time if the date doesn't go back far enough. For an example of how the History feature can keep you from getting incorrect information, as you can see on the normal Ranger page it shows A+ archery but if we go to a mid-2007 revision then it will correctly tell me A- (accurate to 75-cap FFXI) and also all those level 99 cap abilities and such are gone and out of the way.
6. Combat Skill
Keep your combat skill up! If you are a warrior using a great axe, try to skill up your great axe as much as possible before joining a group. If you are a thief using a dagger, skill that up. Skill will only go up so far when fighting Easy Prey only so it will be a good idea to seek out a few, harder fights on Decent Challenge or Even Match before heading out to Valkurm Dunes or Qufim Island or wherever so that your skill will catch up some more. Combat skill is the biggest factor that decides how effective you are as a fighter when playing as a physical damage class in a party. The reason for this is that each of your weapon's combat skill is +1 attack and +1 accuracy. This means if you show up to a group and are 15 skillups away from the cap, you are at a -15 attack and -15 accuracy disadvantage to someone else who has their skill up to cap for that level which is absolutely huge. One small caveat: for combat skill past 200, each point gives you +0.9 attack and accuracy instead of +1.0 each. A huge consequence of this relationship for fresh 75 characters is that combat skill merits are insanely important and you want to dump points into them before other merits in most cases. Each merit into a combat skill increases it by 2 and maxes out at +16 so once you upgrade it eight times you are earning yourself a bonus of +14.4 attack and +14.4 accuracy at the relatively low cost of 210k limit points... WOW!
7. Food is essential!
For anyone past level 10, if you are fighting whether solo or in a party, but especially in a party, always use food! It is a massive damage boost so as soon as you can afford it I would pick up some Meat Jerky to start (you can find it on basic merchants in every starter city for cheap) and upgrade later to accuracy food or Meat Mithkabobs (found on the auction house). Newer players, I encourage to test this yourself and go out and fight a monster without food, use a piece of meat jerky and notice the damage difference. It is very noticeable. If you are unsure when it is a good time in your levelling journey to upgrade from Jerkies to Kabobs, check your stats in your equipment menu BEFORE using food and AFTER the party's level sync is applied. Meat Jerky's attack bonus will cap out at 136 pre-food attack so if you have 137 or more attack, it's going to be a good idea to snack on the Kabobs instead. If you are having accuracy issues, Jack-o'-Lantern is good in the Dunes only and other accuracy food is pretty expensive. Bream Sushi (RoTZ, CoP, ToAU servers) and Crab Sushi (WotG servers) seem to be the cheapest and if you are willing to spend more cash, just take a look around in the Seafood section on the auction house. If you are primarily using ranged attacks instead, Sausage is the main cheap early-game ranged attack food that can be found on Bastok NPCs for 140 gil each. Later on, Coeurl Subs are the best for ranged attack. At higher levels, Rangers get a ton of free ranged accuracy from gear from things such as Archer's Knives, a Ranger's Necklaces and Hunter's Jerkins so I'd stay away from food that gives only ranged accuracy such as sushi. If you do need to mix in a bit of ranged accuracy though, Flounder Meuniere provides a good mix for the early levels and Pot-au-feu (WotG servers only) provides a good mix for the later levels after Flounder caps out. For mages, Ginger Cookies are great from 10 to 75 for regaining MP. For BLM, you will have better success with baked pies such as Rolanberry Pie for the added INT.
8. INT, MND and Resistance
If you mages are feeling left out so far, don't worry, I've got you covered. For this tip, each point of INT will increase the damage of elemental magic by exactly one point unless you've reached enough INT to reach the soft cap, at which point every point of INT afterward is +0.5 damage. This soft cap depends on your target's INT and is generally not reached against monsters much higher level than you (VT, IT) without the aid of level 70+ equipment, so it's safe to ignore the soft cap before then for grouping and just consider +1 INT = +1 spell damage. INT also affects the magic accuracy of most black magic, including all elemental magic. So it sort of double dips for elemental magic, increasing both damage and accuracy. This is why the stat is so crucial for Black Mage. Magic accuracy affects the resistance rate of spells. If you don't know how resist works, any spell can be half, quarter, eighth or full resisted. On status spells like Rasp, it is the duration that is either halved or quartered and such. For damage spells, it is the damage that gets halved, quartered and so on. Most status spells, including Slow, Blind, Sleep, Paralyze and Bind either take full duration or half duration; any resists beyond a quarter will count as a full resist, causing the spell to not stick at all. This means a spell like Sleep can only ever land for 60 seconds, land for 30 seconds, or just get resisted. Lullaby is a bit of a weird exception and will always land for 30 seconds if it's not resisted. MND works in a very similar way, increasing Banish damage by one point per point of MND and increasing magic accuracy of most white magic spells. MND has very little effect on cures mostly due to the ease of hitting the soft cap on the HP restored formula. Cure V is an exception here due to its lack of soft cap: no matter what, every +1 MND equates to about +1.4 HP restored for this spell. On the other Cure spells, MND is pretty negligible. For the most part, the main reason a White Mage would want MND gear in the earlier levels would be to increase the magic accuracy of Slow and Paralyze. One last very interesting thing is that MND and INT will actually increase your resistance to their respective status effects and magic nukes if you are on the receiving end of the spell. If you are instead being hit by a monster TP move, the modifier will always be INT, even if the status effect is typically associated with white magic, like Chaotic' Eye's Silence (Coeurls) or Palsy Pollen's Paralyze (Flytraps), and so on. They will roll with your INT as the modifier. It is rare for anyone to ever itemize MND or INT just for resistance but it is something to note and may be something you keep in mind now for jobs that have a low base MND or INT.
9. Resting MP Ticks
After you first sit down to rest, the first tick of MP will come in at 20 seconds and then every tick after will be 10 seconds apart. This is something that healers can use much to their advantage to get in extra MP here and there when needed which can really add up. For example, if one of your party members needs a cure while you are resting and you are 7 seconds into the current tick, consider waiting that extra 3 seconds to get another, say, 20 MP before you get up and toss the cure if it's not an emergency. But if you just sat down 4 seconds ago and your next tick is going to be 16 seconds away you may want to get up regardless. Always consider the current situation at hand with the monster your team is fighting to make the call when you need to stand up from resting to cast spells. Early and mid game WHM is a lot about how well you manage your rest cycles. As for how much MP you actually get per 1st, 2nd, 3rd, etc. tick, below is a link to the article that shows the exact values along the right side of the page. https://ffxiclopedia.fandom.com/wiki/Clear_Mind?oldid=1053195
10. Mog Wardrobes
Use your Mog Wardrobes!!! Most 75-cap private servers have these enabled (Nasomi has Sack/Satchel instead). If you do not know what these are, they are extra storage options in your mog house at the very bottom and they can only be used to store equippable items. The unusual thing about them though is that they can be accessed from anywhere in Vana'diel. Out in the field, open your minus-key menu and then hit the right key and go to view house and you'll be able to move your equipment freely back and forth. The biggest boon from the wardrobe system however is your ability to equip your items directly from your wardrobes instead of from your inventory. This frees up 16 slots from your main inventory which alone is huge. In your equipment screen after you select one of the slots, hit the storage options button at the very top to change the equip view from current inventory to a wardrobe slot instead. Mog wardrobes are conveniently auto-detected when using equip macros, meaning /equip main "Light Staff" will look in all your wardrobes for a light staff to equip, and the macro will not break later if you move that staff to other wardrobes or your inventory. The same goes for equipsets. Some servers may require you to unlock your Mog Wardrobes before you can use them. On the Eden 75-cap private server in particular, Mog Wardrobes must be unlocked by completing content: getting Mog Wardrobe 1 by achieving rank 3 in your nation and Mog Wardrobe 2 by achieving rank 6 in your nation.
11. 60 FPS
Next up are a few tips for Ashita which is a loader for Final Fantasy XI that lets it run in windowed mode and to connect to private server IP addresses. If you use Windower there are alternate ways to use plugins for Windower to achieve the same effects. For tip 11 we have FPS. By default, FFXI runs at the choppy 30 frames per second. The game was originally designed to run at this rate but this plugin allows you to up the framerate to a smoother 60 per second by typing in "/fps 1" into your game's chat line and hitting enter.
Deeps is a basic damage parser that will show accumulated damage over a parse and percentage of contribution for nearby players. Once downloaded through Ashita in the plugins tab, type "/load deeps" in game and "/dps reset" to start a new parse. The window can be moved by holding the shift key and dragging it with the mouse. The most powerful part of Deeps in my opinion is the ability to see your hit rate percentages on attacks and weapon skills. When you have had a parse going for long enough to have a decent sample size, you can click on the damage bar for yourself (or anyone in your party) to see a damage breakdown. From there, click on either "attacks" or the weapon skill you have been using. Right click will take the menu back one step. This will give a metric on what percentage of swings have missed, hit, or scored a critical. This is VERY useful for adjusting your build or changing up bard/corsaifood buffs. If your miss rate is around 5% (within reasonable margin of error due to sample size) then you are likely at or beyond the accuracy cap, meaning that some of the accuracy you have in your build is going to waste and can be traded out for more haste, attack or STR. As a physical damage dealer, do not let this important tool go to waste!
Probably the most game changing will be the recast plugin. Normally the only way to check your magic and ability cooldowns is by checking the menu or by making dedicated recast macros per ability/spell. With this plugin you'll be able to see all of your cooldowns in real time on the screen. Like before, it can be moved by holding the shift key and dragging it. That's all for Ashita plugins but I'd encourage you to read through the plugins list in Ashita itself to see what else you might put to good use. Be sure though to check the rules of the server you are playing on -- not all plugins or addons may be allowed within server rules.
Next up are a couple tips related to your macro bars. #14 covers equipsets. You may or may not already be familiar with changing your equipment through macros that use "/equip" for each individual piece. Well, now there is a much easier way to do it within the game client. In your minus key menu under macros there is a second button here called equipsets, hit that and you will have an entire book of equipment sets that you can edit and save. Each one is a snapshot of all sixteen equipment slots and once you have one set up, you can put into a macro in simply one line "/equipset 1" to equip that set and it will update all sixteen slots to match it. Equipsets will automatically detect where that piece is located so if you move gear between your different wardrobes or inventory then it will not break the set.
15. Inline Wait Command
Some macro'd actions cannot be used consecutively without a delay between them (i.e. Boost, then Combo) which can be remedied with a "/wait 1" line between them, however this limits your macro to only using up to three lines instead of six. Sometime down the line, Square added the functionality of an inline wait command at the end of any line using the angled brackets. There are a few applications where this is immensely useful, such as this lastsynth macro that will set up your character to automatically craft for two minutes straight without any additional input while you do something else. The macro for that would look like: /lastsynth /lastsynth /lastsynth /lastsynth /lastsynth /lastsynth
16. Keyboard Shortcuts
Tip #16 -- did you know there are several keyboard shortcuts for some of the most used actions and windows in the game? You can use CTRL+Ato engage an attack CTRL+Wto open the weapon skill menu CTRL+Jto open the job ability menu CTRL+Bto open the pet commands menu CTRL+Ito open your inventory window CTRL+Eto open your equipment window and CTRL+Rto reply to the last tell received Another neat thing is that every single one of these CTRL shortcuts will also work if you use the ALT key.
17. Aspect Ratio
Now for a few tips within your Final Fantasy game settings. If you first loaded into the game and felt like the game is stretched lengthwise, that's because it is. The default setting for the game is an aspect ratio of 4:3 which was the most common monitor aspect ratio in the early and mid 2000s so, for tip 18, you can go into your Config menu under Misc. 2 and change the ratio to better match your monitor. 16:9 is the most common nowadays so it is likely the option you'll want to choose. The Config menu can be found by double tapping the minus key to get the second page of the minus key menu.
18. Auto Sort
Tip 18 will be the auto sort function inside Config under Gameplay. The default setting is off which means your inventory will fill with loot one slot at a time until it is at max, even if the items are able to stack on top of each other. Enabling this setting makes it so every time an item enters your inventory it will automatically sort and stack if possible. It is something you cannot live without in my opinion.
19. Tell Notifications
A decent bit of Final Fantasy 11 is going to be seeking party with your invite flag up and you might be AFK or tabbed out for a lot of that. For tip 19, did you know you can safely alt+tab out of the game and not have to check back constantly for invites? In the Config menu under Chat Filters there is an extra option to turn on a sound notification that plays when you get a tell. Find "Tell" in the long list of chat channels, hover over it and then keep pressing enter until you see the musical note. You can test it by sending a tell to yourself if you want to hear what it sounds like. Be careful though, this sound will ONLY play if you tab out of the game from windowed mode but if you MINIMIZE the game it will turn off all sound from the game. If you alt-tabbed out of the game in the proper way, you should still hear footsteps of people running by and general background noise. You can actually turn the in-game sound setting all the way down and you will still get a full-volume tell ping if this bothers you. Which leads into the next step...
20. Don't Use
Please, never use or or or any of the very jarring call sounds for that matter. This is a courtesy for the people in your party. The reason for this is that they ignore the in-game sound slider. If you leave the sound settings in-game alone but adjust the windows sound it will sound normal... but some people do it the other way around -- they leave the windows sound maxed and use the in-game sliders. Since calls ignore the slider and always play at max volume, if you ALSO have windows sound maxed too it is insanely loud and will destroy the eardrums of headphone users. In general, use calls sparingly, and if you want to use one, use one of the softer sounding ones like or or . And if you did not know you can test what each one sounds like using party chat even when playing solo. They go up to 21.
21. Avatar Blur Effect
Next up is a rather niche tip mostly for SMNs. When you summon an avatar you'll notice a really pixelated glow effect around the edges of your avatar. This effect happens because, for whatever reason, the blur effect is locked at rendering at the game's native resolution and you are running the game at a higher resolution. You can turn this off by typing "/localsettings blureffect off". This will make the avatar look much cleaner in my opinion. You can turn it back on by just doing the same thing but just typing "on" instead. This is also insanely useful in Dynamis if you are getting a lot of framerate lag during a pull with a lot of summoner monsters that have their avatar out... the blur effect is the culprit for the lag.
22. Aggro Detection Ranges
Many monsters across Vana'Diel are aggressive towards the player, most often by sight or by sound, as long as they check to the player as "Easy Prey" or higher. At higher levels, the lower end of Easy Prey will no longer aggro you. For tip 22, I'd reccommend picking up the distance plugin in Ashita to better understand the detection ranges I am about to mention. The maximum detection range for monsters detecting by sight is 15 yalms and the maximum detection range for monsters detecting by sound is 8 yalms. However, if you are a ninja or have ninja as your sub job and you have the accompanying stealth job trait learned at level 5 ninja, the sight detection range is reduced from 15 to 12 and the sound detection range is reduced from 8 to 5. Definitely keep these numbers handy next time you're trying to path around aggressive monsters in tight spaces. Keep in mind also that there is a minor lag in playemonster position in FFXI so where you see the mob in your game is where it actually was about half a second ago. It's the same reason that players have trouble initiating battle with a melee attack on a monster that is moving around.
23. Running Ahead of Moving Monsters
This is a quick one. Due to the lag mentioned above, if you want to hit a moving monster, you can run in front of it while facing the same direction it is moving in to land your first hit.
You may be familiar with some common emotes such as /wave /bow and /clap. For tip 24 there are also additional emotes you get when you unlock each job. There is one for every single job and they can be used with the command "/jobemote job" such as /jobemote whm or /jobemote war. It's just a little extra bit of cosmetic fun added to the game and adds to the social aspect of the game which is always a bonus. Also in case you did not know, you can find a list of all the normal emotes in the minus key menu under Communication and then Emote List. /jump is the only one that does not work on private servers.
For 25, just a quick stylistic tip. If you have a helmet on that covers your character's face or just in general doesn't really match the rest of your armor, you can type "/displayhead off" to turn off your helmet or headgear display without taking off that piece of armor and losing its stats.
26. Skillchains with FFcalc
Skillchains in Final Fantasy are one of the many cooperation mechanics that encourage you to coordinate with your party members. Certain weapon skills can be performed in succession for a skillchain that does bonus damage. This works off of each weapon skill having its own skillchain properties that are each associated with an element and when certain elements are mixed it will result in one of the many types of skillchains. Knowing exactly which skills will chain with which other skills can be pretty confusing. There are some charts you can find if you search around online but for this tip I am going to be recommending a very useful third party program that will help immensely with planning skillchains. It is called FFcalc and can be downloaded here: http://www.ffxicalculator.com/ Extract everything to a folder and then open the .exe and click the skillchain tab. In the first drop down at the top left, put your own weapon and in the second drop down put your party member's weapon. On the right side, uncheck "Empyrean" and "Merit" weapon skills (they are not 75-cap) and most likely "Relic" as well unless someone has a relic weapon. After that, it gives you a simple list of all the skillchains you can perform with your party member if you go in this order (i.e. Dagger into Sword). If you swap the order (i.e. Sword into Dagger) it's possible to get entirely different results. Level 1 skillchains deal 50% bonus damage, level 2 skillchains deal 75% bonus damage and level 3 deal 100% bonus damage. Continuing a chain with additional skills will add another force multiplier, dealing even more damage than this.
27. Statistics Calculator
For tip #27 we have another external tool, this one is a website instead of a program so it is easier. Just go to this link here: http://ffxi-stat-calc.sourceforge.net/cgi-bin/ffxistats.cgi This is a stat calculator that will tell you the base stats of a character of any given level, race and job combination. This is immensely useful when planning out what your starting race will be and how your sub job affects what your stats are for whatever main job you choose to go with. It will give you information on things like how much HP a Galka PLD will have over an Elvaan PLD... how much INT/MP a Tarutaru BLM will have over a Hume BLM... or how much AGI/DEX you gain playing a Mithra THF over a Hume THF. Your race choice is PERMANENT in Final Fantasy and on top of that each race actually has pretty substantial stat difference from other races. If you are stuck on being unsure what exactly those stat differences will be when trying to plan out what character you want to create, this website is 100% going to be a huge help.
28. Searching by Area
Tip 28, if you see multiple people with their flags up and plan to build an EXP party, make sure a camp spot is open before starting. Many people are going to be familiar with the common comands /sea and /sea all but there is also a search window in the minus key menu that will let you check any area in the game as long as you've visited it at least once. If you know the area's "short name" you can search it up by the chat command as well. Some common ones you may want to get familiar with will be /sea Valkurm, /sea ZiTah, /sea Qufim, /sea YuhtunJng, /sea Bhaflau, /sea Wajaom, /sea MtZhayolm, /sea . This way you can check if a spot is taken. If you see a party there but unsure where they are at... the party leader's name will be marked in yellow so give them a /tell.
29. Provoke is All VE
This tip is focused on Provoke which is the primary enmity-controlling ability, at least in the early and mid levels. If you are a tank and are not a Warrior, likely you are subbing Warrior solely to get this ability. Provoke is ONLY "Volatile Enmity" meaning 1/30th of its effect fades off every second so it is fully gone by 30 seconds when the ability is back off its cooldown. What this means to you as the tank or off-tank is that Provoke is at its highest usefulness the moment it is used and for several seconds afterward since it starts fading immediately. For this reason it is important to NEVER Provoke a monster while it is bound or sleeping -- you are wasting the best part of your Provoke's effects. Again, to clarify, a Provoke that happened 30 seconds ago has absolutely zero effect on enmity. Keep this info in mind when using Provoke to control the pace of a fight for your party.
30. AH Slight Undercutting
This one is a bit controversial since some people despise undercutters but I'm going to cover it since I'm not one of those people and I feel it'll answer a common new player question of "why won't my items sell?" The AH is really basic -- the lowest price item will always sell first regardless of list date of any of the listed items. If a sword is listed at a rate of exactly once every day for 4,950 and is sold at the exact same rate of one per day while a few other ones sit up for 5,000, then the higher priced ones will never be sold due to their price. Because of this simple system, sellers who have an intent to list for a price, like 5,000, will list for slightly under to get the item to sell faster, like 4,950, 4,901 or 4,999 so it is within your interest as a competitor to do the same to get your own items to sell. If there is enough competition for people to sell their items before others, you can take advantage of this as a buyer and put in bids for numbers like 4,800 which might fail but maybe you'll get some hits with 4,900. Once enough sell at 4,900 the price history will basically say "this item is worth 4,900 not 5,000" and the process could continue if there is still competition at the lower price. This is pretty much the basics of how prices fluctuate on the auction house. If you've had something listed for a week or more you may want to go back and check on the price again -- you might need to relist for lower.
31. Camera Control
Next up are a few camera tricks using the shift key on the keyboard. When you are locked onto a monster with the H key, your arrow keys go from turning the camera to selecting options in the battle menu. You can hold down the shift key while locked to allow usage of the arrow keys to adjust the camera angle. Once you let go of shift you are back to the menu options. Another neat quirk about the shift key is when you are running around out of battle your camera naturally recenters itself behind your character. You can hold the shift key to stop it from doing that. It's useful for taking cinematic shots and also useful if you are trying to avoid aggro and need the camera pointed in the direction where you need to see enemy monsters while you are moving around. The game starts with the camera zoomed in patially. You can use the comma key to zoom all the way out for a wider field of view, or the period key to zoom in further. Also, the Home key will quickly recenter the camera directly behind your character.
32. Monster TP
For tip 32, the way monsters gain and use TP is much different from players. Monsters have a TP gauge that starts at 0 and fills up to 3000 just like players, but they will only use TP moves when they reach the full 3000 points. This changes, however, once the mob hits 25% hp or lower, where it enters sort of a rage mode, using its TP moves immediately once it has at least 1000 TP. This can have the effect of often making the TP moves very predictable in EXP parties since a mob will typically have around 2000~2500 TP at 30% so if it drops to 25% it will use its move right then which will help you time your defensive abilities or even preventative abilities and spells such as stunning or sleeping the monster right at 25% to interrupt its move. Whether the mob consistently uses a move at 25% or not is going to depend on your own party's damage output and weapon type since one handed weapons will feed TP faster. If you did not know, while players get a negligible amount of TP when hit, monsters get much more TP when they get hit. The amount of TP a monster gets when you hit it is the same amount you got for hitting it, plus 30. So if I strike with a Brass Dagger, I get 50 TP but the monster gets 80 TP, meaning it gets TP at 80/50 or 160% of the rate that I do. If I strike with a Greataxe instead, I get 137 TP but the monster gets 167 TP, meaning it gets TP at 167/137 or 122% of the rate that I do. This constant +30 per hit is why faster-attacking one-handed weapons feed TP much more.
For the 33rd and final tip of this post, you can see extra information about your character that isn't normally displayed on your equip screen character sheet through the use of /checkparam . The me is in angled brackets. This will let you most importantly see your accuracy, ranged accuracy, ranged attack, and evasion stats that are normally invisible to you. Don't know if you are hitting the bonus cap on a ranged attack food? Now you can check. Unsure of how much accuracy or evasion you're adding with the bard songs Madrigal and Mambo? Now you can test it out. Another neat trick you can do with this command is put in angled brackets instead to see your pet stats on any pet job. This is particularly useful to see what level your summoned jug pet is as a beastmaster. And that is everything. I had to cut quite a few tips (the original video script had 45) and many URLs due to Reddit's 40k character limit. Maybe in the future I can get into those on other posts. If there was something here you don't understand or something missing you were hoping to see, let me know and I'll try to answer questions. I hope this was helpful and enjoyable to read to someone out there,
I have an economics degree, but i dont know if it is quantitative enough for a job as quantitative researcher at a place like two sigma (read for context)
I am from argentina and i managed to take 7 courses from the masters in economics degree at my university so these would be the courses i take each one is one semester long. Please if you have the time read everything and comment what you know because i will take coments very seriously, i doubt because my university due to its small size has not that much variances of the economics title so someone could study much less mathematics and hisor heer degree would say nothing about the difference in courses. these are the most quantitative ones, of course i then have monetary policy and such courses which also applies the mathematical knowledge aquired. Every comment will be much appreciated. Math 1. Math 2 Math 3. Based on math 1 and 2 it further dives to linear algebra, optimization and differential equations Math 4 (from the master) : An introduction to the metric spaces theory and to the lebesgue integral theory stat 1. stat 2. covers the following topics
1.- Random vectors and joint distributions. Discreet and continuous cases. Marginal distributions. Independence of random variables. (Chapter 3 - Sections 3.1 / 3.4 - Reference 1) 2.- Conditional distributions. Discreet and continuous cases. Conditional hope. (Chapter 3 - Section 3.5 - Reference 1) 3.- Covariance and correlation. Variance of sum of independent variables. (Chapter 3 - Sections 3.6 - Reference 1) 4.-Random vector functions. T, Chi-square and F. distributions Applications. (Chapter 3 - Sections 3.6 / Chapter 6 - Reference 1) 5.-Point estimation. Moments method, maximum likelihood method. Asymptotic theory and confidence intervals. Efficiency. Rao-Cramer coat. (Chapter 8 - Sections 8.3 / 8.6 - Reference 1) 6.- Optimal tests. Neyman-Pearson test. Maximum quotient test verisimilitude widespread. Normality test. Relations between tests and confidence intervals. (Chapter 9 - Reference 1) 7.- Test for two independent samples. Normal case. A nonparametric test: the Mann-Whitney test. Test for two paired samples. (Chapter 11- Section 11.2 - Reference 1) 8.- Analysis of categorical data. Homogeneity and independence test. (Chapter 13 - Sections 13.1 / 13.4) econometrics 1.
advanced econometrics (from the master) covers the following topics
The linear model and the method of ordinary least squares. Errorquadratic mean. The “bias-variance” paradigm. Gauss Markov theorem.
Ordinal efficiency. Generalizations. Causal and structural interpretation of linear model.
Least Squares Anatomy. Biases and inaccuracies. The theorem of
Frisch-Waugh-Lovell. Sources of inaccuracies (determinants of variance). Sources of bias (formula of omitted variables). Cardinal efficiency.
Data in panels: error components. Fixed and random effects. Estimate
and inference. Panels as a solution to endogeneity problems. Differences-differences.
Elements of Large Sample Theory: Variable Sequences
random, convergence. Law of large numbers and central limit theorem. Asymptotic consistency and normality. Introduction to estimation theory. Properties of small samples and large samples.
Instrumental variables: simultaneity, errors in variables and omission of
variables. Instrumental variables. Least squares in two stages. Optimality. Overidentification. Hausman tests. Weak instruments, multiplicity of instruments and TSLS performance in practice.
Robust inference and bootstrap: the “consistency and inference” paradigm
valid ”. Heterogeniedades: White's estimator. Dependencies: the “effect of Moulton ”, equicorrelation, clusters and robust inference. Optimal clustering. Finite sample performance. Bootstrap.
Binary dependent variables: linear probability model, logits and
probits. Advantages and disadvantages. Linear models as optimal approximations.
Maximum likelihood: likelihood, score and information. Inequality of
information. Maximum plausible estimate. Stochastic Taylor expansions. Consistency, asymptotic normality, efficiency and invariance. Estimation of asymptotic variance. Quasi-maximum credible estimators.
Sample selectivity: Selection bias, Heckman's estimator in two
stages. Computational problems.
Statistical and machine learning: brief introduction to statistical ideas and
machine learning. The big data paradigm. Prediction vs. estimate. Cross validation. Regularization. Shrinkage, ridge and lasso. Classification trees.
dynamic macroeconomics(from the master) covers the following topics
1) General Equilibrium, static, multiple agents and with no uncertainty (2 classes) Topics: Existence and characterization of GE models of multiple agents with 1 period and no uncertainty. Welfare theorems. Brower - Kakutani existence approach. Bibliography: MWG Ch. 15 -16-17, HV ch. 17. 2) General Equilibrium, finite time, multiple agents with uncertainty (1 class) Topics: Arrow Debreu as a GE walrasian model with multiple heterogeneous agents and uncertainty. Efficiency and existence. De-centralization and trading: Arrow Securities (sequential trading). Bibliography: MWG Ch. 19 3) General Equilibrium, infinite time, multiple agents / 1 agent with uncertainty (1 class) Topics: Arrow Debreu in infinite horizons with multiple agents and uncertainty. Efficiency and complete markets. De-centralization and trading: Arrow Securities. Recursive formulation Bibliography: SL ch. 7 and ch. 10 4) Dynamic Programming and sequential optimization with / without uncertainty (2 classes) Topics: Bellman optimality principle. Envelope theorem. Existence and properties of the Value function (contraction mapping theorem and Blackwell conditions). Properties of the policy function (Berge´s Maximum theorem). Bibliography: SLP ch. 3 -4 and Ch. 9, AC ch. 2-3 Part 2: Topics (6 classes) 5) Economies with Production, 1 agent and with and without uncertainty (1 class) Topics: Planner´s problem and de-centralized equilibrium. Algorithmic solutions. Bibliography: SLP ch. 5, AC ch. 5 and lecture notes 6) Fiscal policy in Economies with Production, 1 agent and no uncertainty (1 class) Topics: Government expenditure and distortionary taxes. Planner and de-centralized equilibrium. Introduction to non-optimal economies. Bibliography: Lecture notes 7) Economies with Production, multiple agents and “no uncertainty” (1 class) Topics: De-centralized equilibrium (long run and short run properties). Introduction to distributional concerns in macro models (idiosyncratic risk and production). "Buera" models. Bibliography: Lecture notes 8) Economies with endowments / production, multiple agents and idiosyncratic uncertainty. Incomplete Market Models. (1 class) Topics: De-centralized equilibrium (long run and short run properties). Introduction to Hugget / Aiyagari “self-insurance” models. Bibliography: SL ch. 13-14, AC ch. 6 and Lecture notes 9) Partial Equilibrium Labor Models. (2 classes) Topics: Offer side: Search. Implications for wages and unemployment duration. Stationary and non-stationary models. Algorithmic solutions. Demand side. Intensive and extensive margins Bibliography: SL ch. 5, AC ch. 9 and Lecture notes
macroeconomics 1 microeconomics 1 macroeconomics 2 microeconomics 2 calculus based with stochastic processes included (it is not the ones people in poli sci take if you were wondering that) big data (from the master) covers the following topics
Introduction: Predict, explain. Causation and prediction. Data mining, big data,
learning, business analytics. Supervised and unsupervised learning.
Regression. Linear, linearizable and non-linear models. Nearby neighbors.
Resampling. Bootstrap and jacknife. Cross validation. Boostrap in big data. Bags of
Regularization and choice of models. Lasso and ridge.
Nonlinear strategies: saturation, base functions, splines, local regression, models
Kernels, densities and non-parametric regression. The curse of dimensionality.
Trees: regression and classification trees. Bagging, boosting.
Support vector machines. Vector classifiers. Hyperplanes.
Dimensionality reduction Main components and factors.
Clusters. Hierarchical and non-hierarchical methods.
Neural networks and deep learning.
time series analysis (from the master) covers the following topics
Contents: the participants, at the end of the course will be able to: Understand and apply the time series methods corresponding to the stationary and non-stationary variables modeling. Identify the properties of time series of the variables, differentiating univariate, multivariate models and systems of equations. Evaluate possible conditional heteroscedasticity problems and model conditional volatilities such as ARCH, GARCH, EGARCH, IGARCH or GARCH-in-mean. Extend these models to multivariate contexts. Make conditional forecasts and evaluate the predictive capacity of different models
dynamic systems (from the master) covers the following topics
Discrete linear systems. Resolution of discrete linear systems of one or more variables. Diagonalization of matrices. Balance points. Stability, asymptotic stability and instability.
Continuous linear systems. Resolution of continuous linear systems of one or more
variables. Vector fields and phase diagrams. Stability, asymptotic stability and balance point instability. Periodic orbits. ´
Continuous nonlinear systems. Linearization of nonlinear systems. Criteria for
balance point stability. Liapunov functions. Notions of stability of Periodic orbits. Analysis of the behavior of a system. Gradient systems.
Discrete nonlinear systems. Linearization of nonlinear systems. Criteria for
balance point stability. Periodic points. Periodic point stability.
The broker’s maintenance margin Maintenance Margin Maintenance margin is the total amount of capital that must remain in an investment account in order to hold an investment or trading position and avoid a is 25%, meaning the investor’s own money must comprise at least 25% of the security. Trading on margin is a common strategy employed in the financial world; however, it is a risky one. Margin is the money borrowed from a broker to buy or short an asset and allows the trader to pay Margin trading involves interest charges and risks, including the potential to lose more than deposited or the need to deposit additional collateral in a falling market. Before using margin, customers must determine whether this type of trading strategy is right for them given their specific investment objectives, experience, risk tolerance Margin Trading: In the stock market, margin trading refers to the process whereby individual investors buy more stocks than they can afford to. Margin trading also refers to intraday trading in India and various stock brokers provide this service. Margin trading involves buying and selling of securities in one single session. Over time, Margin trading is a legitimate risk and rewards investing proposition. Know both sides of the equation before getting involved. Margin trading is a boon when market conditions are well. But if not
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