Trading 212 Review, Rating and Fees for 2020: Legit? Scam?

Summary of changes to the CBA outlined in the Memorandum of Understanding

With NHL PR's press release on the CBA extension and return-to-play plan, they linked a 71 page PDF of the Memorandum of Understanding passed by the NHL and NHLPA. Let's review and discuss what changes are outlined here. For reference, here is a link to the original Collective Bargaining Agreement (CBA). Friedman's How the NHL and NHLPA found labour peace in a pandemic.

Economic Issues

1) The CBA extension runs through September 15, 2026 (unless there are insufficient funds in the Escrow Account on June 30, 2025, in which case the CBA is extended an additional year)
2) The upper limit for the 2020/21 season is $81.5M, midpoint is $70.9M, and lower limit is $60.2 (same as the 2019/20 season). The cap will remain at $81.5M until Hockey Related Revenue (HRR) for a completed season reaches $3.3B. It will be between $81.5M and $82.5M on a pro rata basis in seasons where Preliminary HRR is between $3.3B and $4.8B. Then will increase by $1M per year until the Escrow Balance is paid off, unless agreed upon by both parties. After Escrow has been repaid but not earlier than the establishing of a cap for the 2023/24 season, a lag formula will be used such that the year-over-year increase in the cap will be between a maximum of the lesser of 5% and the trailing two-year average HRR growth percentage and a minimum (except for the 2026-27 season) of the lesser of 2.5% and the trailing two-year average HRR growth percentage.
3) Escrow is caped at:
Season Escrow Cap
2020/21 20%
2021/22 14% if Preliminary HRR for 2020/21 exceeds $3.3B. 18% if it is below $1.8B. Pro-rata rate in between.
2022/23 10%
2023/24-2025/26 6%
Entirety of April 15, 2020 payroll deposited into Escrow. 100% of funds held in Escrow Account for 2019/20 season; and for future seasons until 1) the Escrow Balance is less than $125M or the beginning of the 2023/24 season (whichever is sooner), and 2) HRR exceeds $4.8B in a season; are released to the League. The NHL waives it's right to reduce or eliminate player salaries for the 2019/20 and 2020/21 seasons based solely on the COVID-19 pandemic.
4) 10% of each player's 2020/21 NHL salary plus signing bonus are deferred without interest to be paid (in full) in 3 equal payments on October 15 of 2022, 2023, and 2024. This does not affect calculations of AAV towards the payroll range.
5) If the 2020/21 regular season starts after November 15, "Roster Freeze Players" (players in the NHL at 5pm ET on March 16 and who played at least 1 NHL regular season game in the 2019/20 season) signed to an SPC for the season on October 31st receive 8.1% (15/186) of their 2020/21 salary by October 31.
6) Increases the benefits credit for the 2020/21 and 2021/22 seasons and provides values for seasons through 2025/26.

Player Benefit Issues

7-31) Various changes to health insurance, life insurance, retirement plans, senior player gifting, and accounting related to those benefits.

Medical-Legal Issues

32-37) Changes to how second opinions are handled
38) Clubs cannot enter into commercial agreements that restrict their ability to select medical staff or refer players to third party service providers.
39) Parties will forma a task force to advise on minimum standards for Club medical resources and staffing on road trips
40) Changes to off season rehabilitation.
41-43) Changes to post-career medical treatment.
44) The NHL and Clubs will not oppose legislation, in Canadian provinces, to extend workers compensation benefits to professional athletes.
45) Changes to worker's compensation.
46-49) Changes to the Performance Enhancing Substances Program
50) Parties will negotiate a revised Substance Abuse and Behavioral Health Program

Player Contracting Issues

51) ELC compensation limits are:
Draft Year Maximum
2019-21 $925K
2022-23 $950K
2024-25 $975K
2026 $1M
52) Minor league compensation limits (for entry-level players):
Draft Year Maximum
2019 $70K
2020-21 $80K
2022-23 $82.5K
2024-25 $85K
2026 $87.5K
53) League-Paid Individual "B" NHL Awards Bonuses (for entry-level players) are amended (starting with the 2020/21 season) to include the Art Ross, Masterton, Messier, and Clancy Awards. These bonuses will not be counted against league-wide player compensation. The amount paid will be increased by 50% starting in the 2022/23 season.
54) Club-Paid Individual "A" and "B" Performance Bonuses are amended to include the Art Ross trophy (starting with the 2020/21 season). Starting with ELCs signed after the 2022 draft, "A" bonus maximums are increased from $850K to $1M, and the maximum per category increases from $212.5K to $250K; "B" bonus (Club-paid) maximums are increased from $2M to $2.5M.
55) NHL Minimum Salary is amended:
Season Minimum Salary
2019/20-2020/21 $700k
2021/22-2022/23 $750k
2023/24-2025/26 $775k
56) UFAs who play for a club outside North America do not need to clear waivers before December 15.
57) Revised tryout agreements.
58) No-trade and no-move clauses always travel with the player in the event of the contract moving.
59) Salary arbitration briefs are limited to: 1) 42 pages (exclusive of indices, glossaries, tables of contents, and exhibits), and 2) size 12-point Times New Roman font, double-spaced, one-inch margins (except charts, tables, headings, footnotes, citations). Arbitration may not be settled after the hearing has commenced.
60) The UFA Interview Period shall be eliminated.
61) Starting with the 2020/21 season, a "Projected Off-Season Cap Accounting" rule shall replace the "Tagging Rule". From the beginning of the regular season through June 30, Clubs may not exceed the current Upper Limit plus 10% in AAV relevant for the following season. Any amounts based on rate reflective of a player's time on the roster uses the current projected time.
62) The Performance Bonus Cushion remains in the final year of the CBA
63) Cap Advantage Recapture is charged against a Club by either: 1) equal proportions in each season over the remaining term of the SPC, or 2) in an equal amount to the contract's AAV in as many seasons required to account for the full amount (the last season is the remaining amount). The later formula (2) is applied if the value in the former (1) exceeds the AAV.
64) The 35 or older cap counting rule does not apply to contracts that have: 1) total compensation (salary and bonuses) that is either the same or increases from season-to-season, and 2) a signing bonus that is payable in the first year only.
65) Clubs cannot make trades with conditions based on a player signing with a Club (if the player has a current or future contract at the time of the trade) or based on the subsequent assignment of the traded player.
66) Players signed through the subsequent trade deadline can sign an 8-year contract without waiting until the trade deadline.
67) For "Front-Loaded SPCs" the difference in the player's salary and bonuses cannot change by more than 25% year-to-year, and the salary and bonuses be less than 60% of the highest season.
68) For contracts signed after this agreement, if the minimum qualifying offer would otherwise be greater than 120% of the AAV of the contract, the minimum qualifying offer will instead be 120% of the AAV.

Working Conditions Issues

69) Changes to how days off are accounted.
70) Changes to bye week accounting.
71) All-Star Game Weekend events will be created by the NHL in consultation with the NHLPA. There will be no All-Star Game in a season in which the NHL and NHLPA agree to participate in an international tournament.
72) Parties will discuss minimizing travel by scheduling back-to-back road games in the same city
73-82) Changes in travel, moving costs and compensation.
83-84) Changes/restrictions to fitness testing and compulsory off-season training.
85-86) Clubs will make two complimentary game-worn jerseys available to each player, provided they are for personal or charitable use rather than commercial. NHLPA will agree to restrictions on player's use of Club-provided game-used equipment.
87) Clubs will give the NHLPA electronic player payroll records.
88) The Playoff fund will be as follows:
Season Fund
2019/20 $32M
2020/21-2021/22 $20M
2022/23 $21M
2023/24 $22M
2024/25 $23M
2025/26 $24M

Other Issues

89) The NHL and NHLPA will participate in the 2022 and 2026 Winter Olympics, subject to negotiation of acceptable terms to each of the NHL, NHLPA, and IIHF (and/or IOC).
90) Changes to the maintenance of the Industry Growth Fund.
91) The NHL has a one-time option to modify revenue sharing on or before June 30, 2021. In the CBA, Recipient Clubs receive either a full or half share of the revenue sharing based on if their "Designated Market Area" has fewer or more than 3 million households (defined by Nielsen in the USA and BBM in Canada). This allows the NHL to change it so all Recipient Clubs receive a full share.
92) NHL will discuss providing footage and still images of NHL players to the NHLPA free-of-charge for non-commercial, editorial, and internal uses.
93) Parties will negotiate a 2020/21 calendar and schedule. Most statistics are pro-rated with a 70/82 factor for "Roster Freeze Players", but not for other players.
94) Tentative Critical Dates Calendar:
Date Event
July 1 2020/21 season begins (for contract signing purposes)
July 13 Training camps open
July 26 Travel to Hub Cities
July 28-30 Exhibition Games
August 1 Stanley Cup Qualifiers Begin
August 11 First Round Begins
August 25 Second Round Begins
September 8 Conference Finals Begin
September 22 Stanley Cup Finals Begin
Later of September 26 or Beginning of SCF First Buy-Out Period Begins
October 4 Last Possible Day of Final
Later of October 4 and 2 days following the last game in the final Playoff round the team plays Deadline for First Club-Elected Arbitration Notification (5pm ET)
October 9-10 2020 NHL Draft
Later of October 6 and 4 days following the last game in the final Playoff round the team plays Deadline for Qualifying Offers (5pm ET), which are not open for acceptance prior to the “Qualifying Offers Open for Acceptance (12pm ET)” date"
Later of October 8 or SCF + 6 days First Buy-Out Period Ends
Later of October 9 or SCF + 7 days Qualifying Offers Open for Acceptance (12pm ET); RFA/UFA Signing Period Begins (12pm ET)
Later of October 10 and 8 days following the last game in the final Playoff round the team plays Deadline for Player-Elected Salary Arbitration Notification (5pm ET); Deadline for RFA Offer Sheets for Players for whom Clubs have elected Salary Arbitration pursuant to First Club-Elected Salary Arbitration (5pm ET); Commencement of Second Club-Elected Salary Arbitration Notification (5:01pm ET)
Later of October 11 and 8 days following the last game in the final Playoff round the team plays Deadline for Second Club-Elected Salary Arbitration Notification (5pm ET)
October 12 Scheduling of Salary Arbitration Hearings
Later of October 18 or SCF + 16 days Qualifying Offers Expire Automatically (5pm ET)
October 20 First Day of Salary Arbitration Hearings
November 8 Last Day of Salary Arbitration Hearings
November 17 Training Camps Open
December 1 2020/21 Regular Season Begins
95-97) Phases 2-4 Protocols (not included in the document)
98) Disputes regarding Leafs broadcasting rights agreement and Pittsburgh non-resident sports facility usage fee have been settled.
submitted by sandman730 to hockey [link] [comments]

Broker with API in Europe

I have been working on a trading bot recently and I would like to start testing it with a paper account and potentially real money at some point.
I have been looking for brokers with APIs but I could not find any that match my criteria yet.
I found Alpaca but this is U.S Based and they only offer margin accounts that are subject to the PDT rule.
Interactive brokers do not offer free trades outside US
I also came across trading 212 which has an unofficial python API that's using selenium. not ideal...
as a last resort I will apply my bot on binance on cryptos but ideally I would like to see it in the stock market.
Any recommendations?
submitted by dionisisd to algotrading [link] [comments]

Back to Basics: Real Estate Investing

Hi All,
First of all, I’m a data scientist by profession but a history major by training. So I’ve tried to cite all relevant data points with a () tag. This allows us to separate debating the data vs. the analysis. I’m also a complete newbie to real estate investing. One of the main goals in fact of this post is to organize my thoughts so far and solicit feedback from more knowledgable individuals.
As part of a balanced portfolio, I've invested passively in real estate for several years (both public REITs and a small amount in a private platform). As my assets have grown and I'm entering the age to buy a primary residence, I've been trying to educate myself on the housing real estate market. After all, even if you don't own any investment properties the purchase of a home is the largest single financial transaction you'll likely ever make. In fact, if you look at the chart linked below (1, see Sources below) you'll see housing is the single largest asset for households with net worth below 1 million dollars, i.e. ~90% of Americans (2). In fact, even in 2010 (in the midst of the Great Financial Crisis): "The primary residence represented 62% of the median homeowner’s total assets and 42% of the median home owner’s wealth" (3). In fact, reading the Economist recently (obviously in my slippers) I was surprised to discover housing is the world's largest asset class. This HSBC report (avoiding the Economist paywall) cites housing as a $226 trillion (!) asset class at the end of 2016 (4) out of a total net worth in 2018 of ~$360 trillion according to Credit Suisse.
 
Even with my casual research, it's clear that real estate is divided into multiple segments including residential, commercial, industrial, farm land, etc. Even the subsector of residential is divided into single family, multi-family, commercial, mobile homes, etc. These segments are further divided across geographies with wildly different tax, capital, and regulatory regimes. So far I’ve limited my research to the US residential sector: single family homes, multifamily, and small commercial apartment buildings. Therefore moving forward when I say real estate I will limit the scope to the above US residential housing market, i.e. acquiring individual or personal portfolio of US housing properties.
 
More formally, the purpose of my analysis below is:
Note: I considered posting this in /realestateinvesting, but ultimately my goal is to evaluate real estate vs. other asset classes. Obviously some people will simply prefer real estate for a variety of reasons, but personally my goal is to achieve the greatest return for the least risk and work. I should stress that I love my career (data scientist) and have no intention of quitting, so the last point is particularly important.
 
Analysis
 
One thing that immediately strikes me as an investor accustomed to public securities, e.g. bonds / stocks, is how odd the real estate market (in particular housing) is in comparison. Having a margin account from a broker, i.e. getting leverage, is often a difficult process reserved for “advanced” investors. In residential real estate, it’s considered “conservative” for an individual to have leverage of 4-5 to 1 (FHA loans, for example, only require 3.5% down in some cases!) . What’s even crazier is that the loan is often issued at only 2-4% over the 10 year US treasury rate. For example today, April 26th, the 10 year treasure is 0.606% while NerdWallet has a rate of 3.3% for a prime credit score, single family home, primary residence 30 year loan.
 
Perhaps because real estate is the only avenue available for newer investors to take on large amounts leverage immediately, I've seen extreme and, in my opinion, irrational positions on the subject. Even a cursory glance at BiggerPockets, /realestateinvesting, etc. uncovers multiple posts along the lines of either "real estate investing is the best investment ever!" vs. "the real estate market is a massive bubble and will crash soon". I've summarized a few of the common tropes I've seen below with my analysis.
 
Real estate is a huge bubble, and is going to collapse any day!
As noted above, real estate / housing has numerous segments that are further divided across geographies with wildly different tax, capital, and regulatory regimes. Saying that "real estate" will crash is like saying the “food industry” will crash. What segment and where? US soybean growers? Fast Food? Argentinian ranchers? McDonalds in particular?
Limiting our discussion to US housing: the Case-Shiller national price index (7) shows that home prices dropped ~27% from peak to trough in the Great Financial Crisis over a period of almost 6 years (Mid 2006 to early 2012). The reason this was such a catastrophic event is that housing had never decreased nationally in a significant way before in the modern era (see Case Schiller home price index). Of course, it’s worth noting that housing had rarely increased rapidly against inflation before.
Let’s assume we had an equivalent event occur. The Jan 2020 index was at 212, so home prices would decrease by 27% to ~155 (mid 2008 levels). Crucially though, this price drop would be expected to play out for years! During that time vested interests (more on that later) would lobby governments extensively for support, foreign and US investors could form funds to take advantage of the situation, etc. As a reference point there is ~$1.5 trillion available in US private equity funds alone as of January 2020.
However, it is worth pointing out that this is at the national level. Local real estate markets, particularly those dependent on select industries or foreign investors, could easily see more dramatic price movements. The US census has a really cool chart (22) that shows the inflation adjusted (as of year 2000) median home values every decade by state from 1940 to 2000. We see that Minnesota home values actually dropped from $105,000 in 1980 to $94,500 in 1990, a fall of more than 10%.
 
Everyone needs a place to live, therefore housing can never go down
Everyone needs a place to eat, but restaurants and grocery stores are famously low margin businesses (5). Farms supply an even more basic need, but many go bankrupt (6). The question isn’t whether housing will go down or not, but whether it will return an attractive rate of return compared to alternative investments.
It’s also worth pointing out that for most “retail” US housing real estate investors, they are investing in a narrow geographic area. Migration and births/ deaths can play a huge role in the need for housing in a given area. Case in point, NYC may have actually begun losing population to migration in 2017 / 2018 (23). Even more interesting, NYC has experienced a substantial loss due to domestic migration which is almost balanced by foreign immigration / new births (24). If foreign immigration decreases in the post-COVID we would expect NYC’s population to decline more rapidly given current trends.
It is entirely possible for national housing prices to modestly increase while expensive coastal markets decline significantly, for example.
 
It's supply and demand. There's a nationwide housing shortage so prices can only go up!
This one has some factual basis. Freddie Mac put out a study in Feb 2020 (18) which indicated that there is a shortage of housing units between 2.5 - 3.3 million units. Some interesting notes about this study is that they consider the “missing” household formation and extrapolate interstate migration trends. As noted below, the US builds ~1.3 million housing units a year, so this reflects ~2 years of housing construction. It’s also worth noting the geographic variation, with “high growth” states like Massachusetts, California, Colorado, etc. seeing ~5% housing deficits vs. states like Ohio, Pennsylvania, etc. seeing housing surpluses of ~2-4%.
However, a Zillow analysis on our aging population (11) points to a slightly different conclusion. Based on their analysis, an additional ~190,000 home will be released by seniors between 2017-2027 compared to 2007-2017. That number increases by another 250,000 homes annually between 2027-2037. Combined, this is about ~50% of the average annual homes constructed in the US between 2000-2009 at ~900,000.
Given these slightly conflicting reports, let’s get back to basics. First, let's separate housing into single family homes, multi-family units, and large apartment buildings. Single family homes, particularly near dense and economically vibrant metros, are far more supply constrained. In contrast, multi family units / apartment towers are, barring regulatory issues (see California), less constrained by available land. See Hudson Yards in NYC, the Seaport area in Boston, the Wharf in DC, etc. It's worth noting that due to costs / market demand most of these developments cater to the entry level luxury category and above, but they are new supply.
I actually wound up looking at US Census projections to get a sense of the long term outlook. By 2030 the Census estimates the population will grow from 334.5 million to 359.4, for a total increase of 24.9 million or an annual increase of 2.49 million (8). In 2019 the Census estimated 888,000 private single family units and 403,000 units in buildings w/ 2+ units were constructed for a grand total of 1,291,000 units (9). The average number of people per US household is 2.52 (10). Some simple math suggests that if we assume each new single family home contains the average number of Americans and each apartment conservatively contains only a single person we get 888,000 * 2.52 + 403,000 = ~2.64 million.
Now, talking about averages in a national real estate market reminds me of a joke about Mars: on average it's a balmy 72 degrees. But the point still stands that at a high level, theoretical sense there is sufficient "housing" for the US population. The question, as always, is at what price and location?
 
Real estate is a safer investment than the stock market!
This one honestly irritates me. While there are many advantages to real estate I can see, safety is not one of them. It is a highly leveraged, illiquid, extremely concentrated asset when bought individually (i.e not in a REIT). Let’s use an example here. Is there a financial advisoy in the world who would recommend you put your entire investment portfolio in Berkshire Hathaway? Of course not, diversification is the bedrock of modern personal finance. And yet Berkshire Hathaway is an extremely diversified asset manager with well run and capitalized companies ranging from Geico to Berkshire Homes to Berkshire Energy. Oh, and it also has $130 billion (with a B) in cash equivalents.
I honestly think this impression stems from 3 factors:
 
You won’t build your wealth in the stock market
One common theme I’m already noticing listening to podcasts, reading blogs, etc. is that many people started investing in the aftermath of the Great Financial Crisis (2009 - 2011). And, in retrospect, it was clearly a great time to buy property! But it was also a great time it turns out to buy almost every investment.
I plugged in the average annual return of the S&P 500 from December 2009 to December 2019 with dividends reinvested (and ignoring the 15-20% long term tax on dividends) (12). It was 13.3%. If you managed to buy at the market bottom of Feb 2009 it was 15.8%!
The long term annual average of the S&P 500 from 1926 - 2018 is ~10-11% (with dividends reinvested). (13). The S&P has never lost money in a 30 year period with dividends reinvested, see the fantastic book Stocks for the Long Run (14). In fact, if you’re investing before 30 the worst 35 year period (i.e. when you would turn 65) is 6.1% (15).
Housing, in general, has tracked at or slightly above inflation ( 16). Even a click bait CNBC article (17) about “skyrocketing” home prices states that homes are rising 2x as fast as inflation (i.e. ~4%). If you look at the CNBC chart for inflation adjusted prices, you’ll see a compound annual growth rate (CAGR) of 2.3% from 1940 to 2000. Let’s do this same exercise again with the Average Sales Price of Homes from Fred (i.e. Fed economic data) (18). In Q1 1963 the average sales price of a house was $19,300. In Q4 2019 it was $382,300. That is a CAGR of ~5.38% over ~57 years.
Another thing to keep in mind is that while real estate does have some tax advantages, there are also property taxes, maintenance, etc.
But it’s harder than that. Because real estate is an illiquid asset. In general, illiquid assets require higher returns than the equivalent liquid asset because of the inconvenience / risk of not having the ability to transact frequently.
 
Case study of real estate purchase:
I’d like to focus the rest of my analysis on an area that many members of BiggerPockets, /realestateinvesting, etc. seem to gloss over: credit. I was surprised to see that for first time home buyers, 72% made a down payment of 6% or less according in Dec 2018 according to (27). This would imply prices only have to decrease 6% to put these new homebuyers underwater, i.e. owe more after a sale than their mortgage. But this fails to take into account costs associated with buying a property, which are substantial at 2-5% for closing according to Zillow (28). Costs for selling a property are even more substantial, ranging from 8-10% according to Zillow (29). This means that sellers only putting down 6% could be underwater (in the sense that they couldn’t sell without providing cash during the sale) with even modest price decreases when taking into account these transactional costs.
 
Obviously there are ways to reduce these costs, so let’s walk through a hypothetical example of the median valued home of ~$200,000.
 
A young, first time home-buyer puts down 10%, or $20k, and takes out a mortgage for $180,000. They also pay (optimistically) closing costs of 2% for $4000. Luckily, they bought in a hot housing market and prices increased 5% (real) over the next 5 years. Their house is now worth ~$255,000. They sell their house and again, optimistically, closing costs are only 4%. This means they pay $10,200. Consequently, after netting out costs we calculate naively that they would make $255k - $10k - $4k - $200k (original purchase price of home) = $41k. Given they only invested $20k of their own money, this is a compound annual growth rate (CAGR) of ~15.4%, which is handily above the S&P 500’s average. This is the naive calculation I first made, but as we’ll see it is deeply flawed. First, let’s look at costs.
 
WalletHub has a really nice chart that shows (conveniently) property taxes on a $205,000 home across all 50 states (30). The average American household spends $2375 on property taxes, so let’s assume a little less and go for $1500. So 5 years x $1500 = $7500.
 
For home maintenance, the consensus seems to be ~1% annually for home maintenance with wide variation. We’ll assume that’s $2000 off the base price, so $2000 * 5 = $10,000. (31).
 
For homeowner’s insurance, Bankrate (32) provides a nice graph that shows the average annual cost for a $300,000 dwelling across all states and then a separate chart for costs based on dwelling coverage. For a $200,000 dwelling coverage we have a figure of $1806 per year, so over 5 years we have $1800 * 5 = $9000.
 
Finally we need to calculate the interest on the debt. One thing that I didn’t realize until I looked at an amortization table how front-loaded the interest payments are. Case in point, I plugged in the $180,000 loan into the amortization calculator (34) using a 3.5% interest rate and saw that we pay on average ~$6000 each year in interest vs. only ~$3800 to principal.
 
So lets’s run the new numbers.
You sell your home still for $255,000. After 5 years, your mortgage is now ~$160000 (i.e. you paid off 20,000 over 5 years, or ~$4k per year). So after the sale you are left with ~$95,000. The buying and selling costs remain the same as before, so we subtract the $14k for $81,000. We also then subtract $7500 (property taxes), $10,000 (home maintenance), $9000 (homeowners insurance) which gives us $54,500.
 
We paid ~$9,700 each year in mortgage interest + principle (~6000 interest and $3700 principal). So 5 * 9700 = $48,500.
 
So, net of everything we get $255,000 - $160,000 (remaining mortgage) - $48,500 (mortgage payments over 5 years) - $14k (buying / selling costs) - $7500 (property taxes) - $10,000 (home maintenance) - $9000 (home insurance) = $6000. And we put down $20,000 as a downpayment, for a net compound annual growth rate (CAGR) of negative $21.4%.
 
That is truly an astounding result. We had 10x leverage on an asset that went up 5% each year for 5 years and we somehow lost money on our “investment” of a down payment? Keep in mind we also used fairly optimistic numbers (particularly home price appreciation) and didn’t factor in PMI, etc. On the flip side, this home provided shelter, i.e. you didn’t pay rent. That’s a massive “avoided” cost and I don’t mean to minimize it. But the point here is that many homebuyers I’ve spoken to fail to account for the substantial costs of home ownership and expect their primary resident to generate a substantial return.
 
Now, of course, for real estate investing you would likely either a) hold the property for less time and attempt to flip it via forced appreciation or b) have tenants in the property. Let’s focus on b) because frankly that’s more of my interest. From what little research I’ve done flipping houses requires much more time that’s incompatible with my day job.
 
I went ahead and used the rental price calculator I found online at (36) to calculate the return. I used a rent of $1300 monthly, a bit lower than the average national rent of $1476 (35) because our home price was also lower than the national average. I assumed a low vacancy rate of 5%, and no other expenses beyond the ones cited above (i.e. I didn’t assume property management, higher loan interest rate, higher property taxes).
 
The calculator spit back a 5 year internal rate of return (a metric in this case useful to compare against the securities markets) of 27.79% return, i.e. a profit of $63k on an initial investment of $20k. The IRR as I understand it captures the time value of money, basically accounting for when you made various returns (37). E.g if an investment over 30 years pays nothing then gives you a lump sum payment at the end that’s very different than if it pays 1/30th of that lump sum every year. It’s useful in this case for comparing against the stock market because the IRR takes all future cash flows back to a net present value of 0, i.e. as if we invested all the money immediately.
 
&Now let’s do some scenario modeling (originally we had 10% down, 3.5% interest rate for an IRR of ~28%):
This scenario for me demonstrated a number of interesting properties.
 
 
401k analysis
As I mentioned above, one of the big questions around real estate investing that I rarely see asked is “is it an appreciably better investment than the alternatives”? For W2 workers, which is ~50% of private sector workers, this question becomes even more pertinent because 401ks have massive tax benefits. In fact, only 33% of US households own taxable accounts outside of a 401k, which means the vast bulk of US households either have no accounts, 38%, or own only a retirement account like a 401k, 29%, according to (39). Let’s assume we have a middle to upper middle class worker making ~70k (this puts them roughly at the 75% percentile). They want to invest, and see two options:
 
At a salary of $70k and assuming you took the $12k standard deduction, you would still see much of your income fall into the 22% tax bracket. While certain states charge no income tax, they generally make it up in much higher sales / property taxes, so let’s also assume a 3% state income tax (40). This means that if you invest $19,500 in a 401k (the maximum in 2020) that’s equivalent to only $14,625 post-tax (because the $19,500 would be taxed ~25% before it got to you). That leaves almost $6000 when compared with the down payment figure above, which is coincidentally the exact IRA contribution limit for 2020! The math for deductions for the IRA gets painful, but we can assume a deduction of ~$1500 (i.e. 25% of 6000). Now, if your work offers an HSA it gets even better, because those contributions are tax-free even from social security (which is typically a 6.2% tax) + medicaid (1.45%). This means that if you contribute the $3500 limit, that’s equivalent to only $2300 post-tax.
 
This is getting rather long, so for the sake of simplicity we can basically say that in lieu of putting down a $20,000 post-tax downpayment on an investment property you could instead invest $19500 + $6000 + $3500 = $29000 into the stock market. What’s more, fees for well managed 401ks through Vanguard, Schwab are often ~0.25% (i.e. $72 annually on the $29k above).
 
If we assume the average S&P 500 index returns of 10% (we’ll ignore the $72 annually in expenses and of course there are no taxes), we would see $29k compounded over 5 years = $47,809. Since we’re investing the money all immediately, this is (I believe) more or less equivalent to the IRR rate.
 
So, what do we need to achieve to beat that return with our investment property? Well, we previously assumed a blistering 5% real home price appreciation. With inflation at ~2%, that’s a nominal 7% home price appreciation. According to both Zillow and Core logic, Idaho is the state with the fastest home appreciation values pre-COVID at ~9%. We’re essentially predicting close to this level for 5 years, which is quite rare. In August 2019, US home prices nationally were gaining ~2.6% according to (41).
Let’s plug those numbers into our rental property calculator from above. At a 10% down payment, 3.5% interest rate, and 2.6% home price appreciation we see an IRR of 18% per year. Game, set, match, real estate, right?
 
Well, sort of. Right now we are assuming optimistic projections about maintenance (1%), closing costs (2%), and selling costs (4%). What if we bump those up to the averages cited by Zillow (3% and 8%)? Uh-oh, now we’re down to 12.38%. Okay, but what if we assume rent goes up by the same amount, ~2%? Great! Now we’re back up to 14% IRR. But if we assume all the other expenses like home insurance and maintenance go up 2% a year as well, we’re back down to 11%.
 
We could go on forever, but the point is that real estate (particularly for rental properties) are extremely sensitive to assumptions you make on a number of factors. Given the risk, illiquidity, and work involved with a real estate property I would want to see a substantially higher return than the tax advantaged, hands off 10% my 401k gives me. I didn’t even include the typical 3% match for the 401k, which would have added $2100 to the initial investment amount and increased the 5 year return to $51,272.
 
The bottom line in my mind is that for most W2 workers who have access to pre-tax investments, they should max them out first. If you’re lucky enough to be able to max out all of the above pre-tax accounts + get a 3% match (i.e. $31k total) every year, after 15 years at a 10% return you’ll have $1.2 million. In 30 years you’ll have $6.8 million. And again, keep in mind that maxing out your pre-tax accounts only “costs” you ~$20k, because that’s what you would get after taxes. And you’ll have “made” those millions without spending a single hour outside of your day job working.
 
Based on the above analysis and calculations, here’s what I’ve come away with as a newbie to real estate investing:
 
Some thoughts on the future:
Forecasting is always risky, but at the same time we all have to form an opinion on where the future is headed. My general thoughts are that crisis tend to accelerate existing trends rather than create new ones. There were already recession concerns in late 2019, and US GDP growth expectations had been downgraded to ~2.0% by the OECD even before COVID (45), albeit with slight optimism around the Phase 1 trade deal with China. Geopolitical tension and capital controls in China had led to mainland Chinese investors slowing their investments in US real estate and increasing dispositions (47).
From my point of view, I’m interested in seeing how the market reacts over the next 3-6 months. Do sellers react by rapidly putting properties on the market before it’s “too late”? Are there enough prime buyers given the tightening credit, particularly for expensive coastal markets, to absorb a spike in listings? As Warren Buffett once said: “"At rare and unpredictable intervals...credit vanishes and debt becomes financially fatal. A Russian-roulette equation--usually win, occasionally die--may make financial sense for someone who gets a piece of a company's upside but does not share in its downside.” We shall see.
Sources:
submitted by cooleddy89 to investing [link] [comments]

Broker with API in Europe

Broker with API in Europe
I have been working on a trading bot recently and I would like to start testing it with a paper account and potentially real money at some point.
I have been looking for brokers with APIs but I could not find any that match my criteria yet.
I found Alpaca but this is U.S Based and they only offer margin accounts that are subject to the PDT rule.
Interactive brokers do not offer free trades outside US
I also came across trading 212 which has an unofficial python API that's using selenium. not ideal...
as a last resort I will apply my bot on binance on cryptos but ideally I would like to see it in the stock market.
Any recommendations?
submitted by dionisisd to Daytrading [link] [comments]

Broker with API in Europe

I have been working on a trading bot recently and I would like to start testing it with a paper account and potentially real money at some point.
I have been looking for brokers with APIs but I could not find any that match my criteria yet.
I found Alpaca but this is U.S Based and they only offer margin accounts that are subject to the PDT rule.
Interactive brokers do not offer free trades outside US
I also came across trading 212 which has an unofficial python API that's using selenium. not ideal...
as a last resort I will apply my bot on binance on cryptos but ideally I would like to see it in the stock market.
Any recommendations?
submitted by dionisisd to algorithmictrading [link] [comments]

Hey WSB, WTF is logistics?

Hey WSB, WTF is logistics?
Good evening autists,
I've decided to make this post in order to give you all insight of what I see as a underexamined area of weakness (especially in this sub) and I believe is a possible harbinger of what lies ahead, which is the logistics industry. There are many moving parts and niches in the industry and most businesses rely on logistics services to support their operations (from the supply of raw materials, moving product from manufacturer to distribution center, clearing freight through customs, storage, or delivering final products to stores or customer's door). There are steamship lines (SSLs), airlines (ALs), freight forwarders, customs brokers, truckers, distribution centers, warehouses and they all participate to assist companies who import their products to different markets get them there as fast as possible (unless you're an SSL) at the lowest cost.
These services have allowed products to be made more cheaply internationally due to low labomaterial costs, mainly, which in turn allows markets to buy them cheaper. For the US, this is critical because it doesn't really manufacture much anymore as it's moved on from a manufacturing economy to a more service based economy over a handful of decades (trade deficit for March increased to $44.4 billion difference in imports over exports https://www.census.gov/foreign-trade/data/index.html ).
We're on a downtrend due to trade war, which is good, but $44 bil on 3month avg is basically impossible to make up for in any kind of short-term basis.
With this change from a manufacturing economy to a more service based economy, basic logistics services have seen steady growth for multiple decades. In general, when an industry is in its infancy, you have many small players (usually) and over time they consolidate. Well, this is similar to what's happened in the SSL sector of the logistics industry and this is where I'll start.
SSLs
You can do your own research, or just take my word for it, but SSL alliances have picked up starting the last decade or more ('08 recession put upward pressure on this) as record losses were prominent for almost all carriers due to over-supply and reducing demand. This fact then pushed them into rate wars (SSLs undercutting freight rates to push out competition). Rate wars then forced alliances among the SSLs. Larger players forming pacts with similar larger players in order to wipe out the smaller players, which in turn has forced the smaller players to build pacts in order to fight back. If you're wondering how this isn't an antitrust issue, it has been brought up and investigated by the DOJ though I'm not going full on into the weeds on that but basically, "Antitrust investigators believe that due to a history of legally having the ability to discuss pricing under antitrust immunity, the industry lacks a disciplined culture and is therefore susceptible to illegal activity. For example, the DOJ regularly issues a statement raising concerns after the FMC allows a shipping alliance or major vessel-sharing agreement (VSA) to take effect" * https://www.joc.com/maritime-news/container-lines/us-antitrust-probe-container-shipping-ends_20190226.html (think OPEC-ish). With the formation of these pacts came investment in new containerships at a record pace. It was a race to see who could buy the largest ship in order to save cost through economies of scale and crush the competition on the highest traffic lanes globally (i.e. major import lanes like Shanghai to Los Angeles or Shanghai to Rotterdam). The first major player to fall was Korean SSL Hanjin just over 4 years ago. At the moment, we only have 3 alliances that control~80% of the capacity of ocean cargo transported globally. The breakdown of alliances is below (https://www.morethanshipping.com/the-impact-of-the-container-shipping-alliances/ ).
Pick your poison
However, unfettered competition remains within these main trades regardless of the alliances made. It is tantamount to a war of attrition and that is going to be devastating in the current environment. See below recent reports on SSLs.
An April 8th article in WSJ ( https://www.wsj.com/articles/container-ship-operators-idle-ships-in-droves-on-falling-trade-demand-11586359002 ) stated the below points
  • Container ship operators have idled a record 13% (OP Note: this easily beats the '08 recession) of their capacity over the past month as carriers at the foundation of global supply chains buckle down while restrictions under the coronavirus pandemic batter trade demand.
  • Alphaliner, based in Paris, said more than 250 scheduled sailings will be canceled in the second quarter alone, with up to a third of capacity taken out in some trade routes. The biggest cutbacks so far have hit the world’s main trade lanes, the Asia-Europe and trans-Pacific routes.
  • Ship brokers say giant ships that move more than 20,000 containers each now are less than half full.
  • Sailing cancellations grew from 45 to 212 over the past week, according to Copenhagen-based consulting firm Sea-Intelligence. The “blanked” sailings are stretching into June, indicating operators expect the traditional peak shipping season, when retailers restock goods ahead of an expected buildup in consumer spending in the fall, will be muted this year by the lockdowns extending across economies world-wide.
  • France’s CMA CGM SA, the world’s fourth-largest container line by capacity, said this week it is idling 15 ships because retailers are pulling back orders over falling demand from European and American consumers.
  • The decision to idle, or “lay up,” ships is a difficult option for owners, as the vessels continue to generate costs without offsetting income. There are two ways to idle ships. In a “warm layup” vessels are anchored and staffed, ready to go relatively quickly when demand resumes. This means saving on operating costs such as fuel but continuing to pay crew salaries and insurance fees and make charter payments. In a “cold layup” a skeleton crew is kept on board for general maintenance but most of the ship’s systems are shut down. Returning the ship to service can cost millions of dollars and requires extensive testing to certify that the ship is safe to sail.
A May 4th article in WSJ ( https://www.wsj.com/articles/some-shipping-lines-may-not-survive-downturn-hapag-lloyd-chief-says-11588612964 ) stated the below points.
  • Some container shipping companies may collapse if the global trade downturn stemming from coronavirus lockdowns extends to the end of the year or beyond.
  • The shipping lines that handle the biggest share of the world’s international trade in retail and manufactured goods have canceled up to a quarter of their sailings since late February amid extensive lockdowns and collapsing demand in the U.S. and Europe.
  • The world’s top 10 liner companies, which collectively handle more than three-quarters of the world’s oceangoing container trade, are looking at steep losses from the falling business.
  • Germany’s Hapag-Lloyd, the world’s fifth-largest container line by capacity, according to industry data group Alphaliner, has canceled about 15% of its scheduled sailings on major ocean trade routes, including Asia-Europe and trans-Pacific operations.
  • Some carriers are trying to preserve cash by taking longer trips around Africa instead of crossing the Suez Canal, saving on canal toll costs that can reach around $500,000 for a single big ship. With fuel prices sliding under the crash in oil prices, the cost of the longer sailing makes sense. (OP Note: This increases lead times for buyers and further disrupts company's supply chains)
  • Hapag-Lloyd has thousands of land-based employees working from home and has frozen management salaries and returned leased ships to charterers. It is not looking at layoffs for now. But the carrier is pushing back an order of six megaships that move more than 20,000 containers each, to add to the six it already operates. Those megaships are the big losers with volumes crashing since many are sailing half full, giving up the benefits operators gain from the ships’ economies of scale.
Knowing the above, see a Feb 28th report ( https://splash247.com/liner-bankruptcy-potential-at-highest-levels-recorded/ ) stating the below points.
  • The collective Altman Z score of the 14 container shipping companies that publish their financials deteriorated markedly in the 12 months ending September 30, 2019, falling to 1.16 from 1.35 in all of 2018 and thereby signifying a rising probability of bankruptcy.
  • "IMO 2020 was already going to make this a year of huge disruption for the entire maritime industry," said Marc Lampieri, a managing director in the transportation and infrastructure practice at AlixPartners. "Throw in the coronavirus, the recent deterioration of some key financial measures and whatever other unforeseen disruptions lie ahead, and it's clear that preparing for the worst may be the best way to avoid the worst."
If you're unfamiliar with the Z score formula it is a calculation that predicts the probability that a firm will go into bankruptcy within two years. Anything below a score of 1.8 is considered a "very high" risk of bankruptcy.
So, if this industry sector was reduced to a 1.16 Z score for the 12 months ending Sept 2019 (5 SSLs produced a scores of less than 1 and all were under the 1.8 level), it's probably a safe bet this score has not gone up since. If more SSLs were to go bankrupt, this would further constrain capacity to even fewer SSLs who are already trying to minimize port calls and slow down how fast ships cycle through their scheduled port calls (their "string"), causing backlogs that in turn send freight rates higher. Part of the reason they do this is because of the headhaul vs. backhaul issue that occurs on many vessel strings (i.e. lots of freight moving from a ship's origin to particular destinations, but not from the destinations back to the ships origin or future port calls) causing them to issue "blank sailings" for some ports, which is their notice that the port will be skipped by a particular vessel. This causes many problems with equipment (container) availability and can further distort freight rates and cause backlogs. If they can only make money going one way, they're losing money more often than not. Furthermore, inactive containership capacity through 2020 is projected to move even higher, increasing the recent record statistic for the sector. Below articles for support.
April 8th article (https://shippingwatch.com/carriers/Containearticle12067889.ece) stating the below points.
  • The large scale sailing cancellations could push the inactive container ship fleet to over 3 Mteu in the coming weeks in the worst capacity crisis that the container shipping industry has ever seen.
  • Several routes with usually large capacity will be fully canceled in the second quarter, including 2M's major AE-2/Swan service, where 12 ships of 23,000 teu sail between Asia and North Europe. "No market segment will be spared, with capacity cuts announced across almost all key routes," writes the firm.
An article dated May 1st ( https://theloadstar.com/europe-asia-ocean-rates-hit-new-heights-as-exporters-fight-for-what-space-remains/) via the Loadstar provides an example of how capacity and rates can fluctuate and go haywire relatively quickly. Summary below.
  • Normally freight from Asia to Northern Europe is the headhaul (large volume) and the backhaul is NE to Asia (lower volume). However, due to lockdowns happening at different times in Asia vs Europe, this volume has fluctuated highly. Freight rates for NE to Asia in Jan were $500 for a 40' GP (40 ft. general purpose container), as China was in lockdown and demand was poor and space was plentiful. However, now that Europe is in lockdown and Asia is up and running, demand has spiked on the NE to Asia backhaul (as China lifted out of lockdown) and space is basically non-existent and has forced the rate for a 40' GP from a low of $500 in January to $2000 now in May. This is due to the fact that SSLs reverted to blank sailings for NE ports as demand in Europe dropped due to beervirus and caused freight rates to fall from Asia origins. They've been able to steady the rates at Asia origins at the cost of backlogs and rate spikes at backhaul ports.
For SSLs, the game is complicated and tricky while margins are razor thin and the coronavirus exacerbates this. They're trying to manage rates, whether or not to park vessels and how they should do that, which ports do they skip to save money, and how to keep cash flow (as most of them are very much in debt). Their actions then affect shippers and buyers worldwide and it becomes very difficult to manage costs through out global supply chains. When things are this uncertain, for all parties in logistics, sometimes it's like trying to catch a falling knife when moving cargo. If shippers/buyers time it right they can avoid extra costs but if they are trying to ship at the wrong time they're going to feel the pain in the form of high freight rates, delays (which increase storage/demurrage costs), and chargebacks from shipper's/buyer's customer who receive cargo late (depending on terms and conditions of their contracts).
SSL TL;DR - Steamship lines have been broken for a while but beervirus has potential to be the catalyst to push many over the edge into insolvency. In order to stabilize freight rates, SSLs have been parking container ships at a record pace with capacity projected to shrink by more than 3 million TEU (20' container equivalent), which has never happened before. The more SSLs revert to parking vessels in order to stabilize freight rates, the closer it pushes them to bankruptcy (a double edge sword, if you will) and in turn the more companies will pay to move freight in the future. Even if no SSLs go bankrupt, companies will be paying more to move freight regardless due to virus disruption.

ALs
There has been much already addressed and available about the ALs and I'm just going to assume you're more aware of their history as compared to the SSLs, so I'll make this section short and only provide the details most of you might not get if you're not really involved with logistics.
An article published on May 4th (https://www.stattimes.com/news/global-air-cargo-capacity-down-by-29-seabury-reports/ ) stated the below points (w/ visuals).
You already knew this but ALs getting hammered due to passenger decline related to beervirus. That in turn has affected the flow and capacity of airfreight
Passenger aircraft belly capacity reached an all time low at the beginning of April. It has rebounded slightly, but forecasts shows capacity will not be returning to normal in 2020
  • Global air cargo capacity is -29% on a YOY basis. (OP Note: A 23% increase in capacity was seen the week of April 22nd-28th for passenger belly aircraft, which is heartening, but considering capacity dropped well over 80%, this recent gain would only constitute ~ 4.5% return to previously normal capacity seen at the beginning of February)
  • US- Europe lanes have have had the largest impact so far, but disturbances have been felt on every lane globally and the Europe/Africa, Europe/South America routes are still seeing capacity constraints between 60% and 88%.
So, matching the economic data we've seen recently, airline capacity data is abysmal.
Another article release today by the NY Times also states the dire circumstances ALs face currently (https://www.nytimes.com/2020/05/10/business/airlines-coronavirus-bleak-future.html?auth=link-dismiss-google1tap). This article isn't particularly logistics focused, but it provides insight into the passenger side of ALs, which is where they make a majority of their revenue. I've added important points below.
  • Passenger traffic is down about 94% and half the industry's 6,215 planes are parked at major airports and desert airstrips.
  • To get through the next few months, airlines successfully lobbied for a huge federal rescue. But half of that money was intended to cover payroll and that will run out by the end of September.
  • Desperate to preserve cash, the airlines have also aggressively discouraged customers from seeking refunds, offering vouchers for future travel instead...(and) the industry trade group Airlines for America, said that refunding all tickets could lead to bankruptcy.
  • Payrolls have largely been spared the ax, for now, because Congress set aside $25 billion to pay workers through September as long as airlines refrain from imposing furloughs or pay cuts. But some airlines have already tested those limits, and executives have signaled that layoffs will come when those protections expire.
  • Most industry analysts and executives expect years to pass before airlines fly as many passengers as they did before the pandemic. Even then, a rebound may come in fits and starts, propelled by medical advancements, an economic rebound and shifts in the public’s tolerance for risk.
  • Take China, for example. The number of domestic flights there started to recover in mid-February, but plateaued in early March at just over 40 percent of levels before the outbreak, according to the International Air Transport Association, a global industry group. (OP Note: The gain back to 40% could be attributed to the large backlog left from China lockdown and Lunar New Year holiday at the beginning of Feb)
  • The airlines are triaging. Even as they slim down to preserve cash, they are finding ways to make what little money they can. Many have put otherwise unneeded planes to use transporting cargo, including medical supplies, taking advantage of a spike in freight prices.

ALs TL;DR - With beervirus, passenger belly space has shrunk to unprecedented levels, causing air freight rates to increase by 5 or 6 times their normal costs on many lanes as planes are parked. Companies are forced to pay through the nose for air freight when cargo critical to their operations is needed due to SSL capacity constraints and the extended lead times across all modes of transportation. Companies trying to utilize air cargo will be paying higher costs indefinitely as air capacity doesn't look to return to normal within 2020.

Last, I'd like to move on to look at US inventories and US consumer spending as they are the major catalyst when it comes to freight demand. Using US census data, summarized in the below table (this is preliminary data, so not reflecting recent update today but breakdown takes this into account) , tradingeconomics.com ( https://tradingeconomics.com/united-states/wholesale-inventories ) provides this breakdown of Us inventories: "Wholesale inventories in the US fell 0.8 percent month-over-month in March of 2020, less than an initial estimate of a 1 percent drop. Still, it is the biggest decline in inventories since September of 2011. Stocks of nondurable goods slumped 2.7 percent (vs –2.6 percent in the preliminary estimate), while durable goods inventories edged up 0.5 percent (vs 0.1 percent in the preliminary release). Year-on-year, wholesale inventories were down 1.7 percent in March."
https://www.census.gov/econ/indicators/tab2adv.pdf
Typically, high inventory points to economic slowdown, while a low reading points to stronger growth. However, this generality is not true in the current environment. We're seeing inventories lower due to supply shocks presented by the beervirus but at the same time we're seeing major demand shocks so we have this peculiar instance where inventories have fallen the most in over a decade, but still did not fall as much as expected.
Now look at consumer spending ( https://tradingeconomics.com/united-states/consumer-spending ).
Splash Mountain
And now with tradingeconomics.com forecast.
https://preview.redd.it/657ykdocy1y41.png?width=875&format=png&auto=webp&s=76997dad3a5c80c6fe82186241cf690bf94f7cf6
I argue that this shows supply is catching up to demand, as we can see that consumer spending has fallen off a cliff and is projected to fall further.
So, you might be wondering, what does all of this means and what am I getting at?
Within logistics there is a phenomenon that occurs when supply and demand are not managed and become dislocated. This is called the Bullwhip Effect. With the turmoil associated around major players in the logistics industry (SSLs & ALs) and general uncertainty in regards to the the economic outlook, we can expect increased costs associated with inventory, if companies have too much inventory (which is looking like the lesser of two evils IMO depending on the situation), or increased cost in freight spend, if companies don't have enough inventory (which, considering the wild swings in rates, could be devastating in cost). Either way, the point is cost. Costs are going to go up to move all the consumer goods we have been accustomed to buying so cheapy over the last decades of the expansion of the global market place that was supported by the expansion of capacity in global SSLs and ALs. That is why I'm not buying the deflation narrative that is being passed around currently and supported by the FED. Logistics services have been widely overlooked as a major contributor to the deflation in CPI we've seen over the last decade or so, as this coincides with the alliances created in SSLs and rate wars that ensued. We will see consumer prices increase and inflation will return whether the economy rebound quickly or not. I am short gold, silver, and select precious metal equities, long on global risk assets until this mess can be sorted out.


TL;DR - Logistics services have expanded with globalization and have become key players in keeping companies operating smoothly. SSLs have been creating alliances over the last decade, which caused rate wars (lowering freight costs). Due to beervirus, SSLs and ALs are severely hampered and are parking assets at a record pace, severely reducing capacity that is extremely difficult to expand in any kind of short-term basis. The disruption to supply chains will cause bullwhip effects across supply chains worldwide. This will raise prices for most goods with certainty. I am short gold, silver, and select precious metal equities, long on global risk assets until this mess can be sorted out.
submitted by xcessinmoderation to wallstreetbets [link] [comments]

[Austria] The one broker choice thread to finish them all

Servus to all personal finance gurus - I just wanted to ask for your advice and open a bit of a discussion regarding best brokers available in Austria for different uses. I am breaking this post down into three main parts - best brokers for ETFs, casual long-term investment into stocks and day trading. In the future, I personally anticipate all three uses for myself, with a money distribution of something like 65/30/5 percent.
For each of the uses, I am listing the main priorities I have identified and the broker of choice - however, this list is by no means final, and I would very much like to listen to your thoughts and considerations on the matter!
1. ETF broker (looking to invest consistently in S&P + EM, as well as time-to-time into thematic ETFs such as AI, Machine learning etc.) - Flatex
What I prioritise:
Other existing options: conventional banks like Erste (too expensive), Trade Republic (has a Sparplan, still not open in Austria, not steuereinfach), DADAT/Hello Bank (too few ETFs to choose from)

2. Long-term stock portfolio broker (to invest consistently in a portfolio of 10-15 companies for a long term, with sums under 1000EUR pro transaction) - Degiro or Trading 212? Both non-steuereinfach, both low-cost (T212 is no-commission) - which would you recommend and why? (or maybe even Flatex?)
What I prioritise:
Other existing options: Flatex (steuereinfach, but expensive (up to 5,90 per trade)), Revolut (using it currently, but the spreads seem bad, there are no limit orders etc., there are reports of users getting locked out for weeks, as well as reports of app malfunctioning when trading volumes go up), Interactive Brokers (Inactivity fees).

3. Day-trading or option broker (looking to have some fun with trading on short term-basis, ready to lose the entire deposit for the sake of learning) - Trading 212
What I prioritise:
Other existing options: Flatex (steuereinfach and has a day trader flat fee account), Interactive brokers (seems very 1990s from their website), Degiro (almost the same as T212, seems to have a more limited CFD/options array, short position and leverage fees are higher)
  1. Bonus level - Crypto trading (never tried yet, may be up for some signal-based day trading + a small speculative investments portfolio) - Binance. Priorities: a secure platform + low fees.

I would be incredibly grateful for any analysis / critique of the above - and let’s together make the definitive list that all our Austrian co-redditors could use!
submitted by a-rain-in-rotterdam to Finanzen [link] [comments]

[Austria] The one broker choice thread to finish them all

Servus to all personal finance gurus - I just wanted to ask for your advice and open a bit of a discussion regarding best brokers available in Austria for different uses. I am breaking this post down into three main parts - best brokers for ETFs, casual long-term investment into stocks and day trading. In the future, I personally anticipate all three uses for myself, with a money distribution of something like 65/30/5 percent.
For each of the uses, I am listing the main priorities I have identified and the broker of choice - however, this list is by no means final, and I would very much like to listen to your thoughts and considerations on the matter!
1. ETF broker (looking to invest consistently in S&P + EM, as well as time-to-time into thematic ETFs such as AI, Machine learning etc.) - Flatex
What I prioritise:
Other existing options: conventional banks like Erste (too expensive), Trade Republic (has a Sparplan, still not open in Austria, not steuereinfach), DADAT/Hello Bank (too few ETFs to choose from)

2. Long-term stock portfolio broker (to invest consistently in a portfolio of 10-15 companies for a long term, with sums under 1000EUR pro transaction) - Degiro or Trading 212? Both non-steuereinfach, both low-cost (T212 is no-commission) - which would you recommend and why? (or maybe even Flatex?)
What I prioritise:
Other existing options: Flatex (steuereinfach, but expensive (up to 5,90 per trade)), Revolut (using it currently, but the spreads seem bad, there are no limit orders etc., there are reports of users getting locked out for weeks, as well as reports of app malfunctioning when trading volumes go up), Interactive Brokers (Inactivity fees).

3. Day-trading or option broker (looking to have some fun with trading on short term-basis, ready to lose the entire deposit for the sake of learning) - Trading 212
What I prioritise:
Other existing options: Flatex (steuereinfach and has a day trader flat fee account), Interactive brokers (seems very 1990s from their website), Degiro (almost the same as T212, seems to have a more limited CFD/options array, short position and leverage fees are higher)
  1. Bonus level - Crypto trading (never tried yet, may be up for some signal-based day trading + a small speculative investments portfolio) - Binance. Priorities: a secure platform + low fees.

I would be incredibly grateful for any analysis / critique of the above - and let’s together make the definitive list that all our Austrian co-redditors could use!
submitted by a-rain-in-rotterdam to eupersonalfinance [link] [comments]

My trading blog: first > 100-million-ISK-profit trade

Today is Day 45 of my trading "blog" and the first major activity since day 22 (link to previous blog post: https://www.reddit.com/Eve/comments/fcp2g3/my_trading_blog_finally_doubled_my_wealth/)

I started trading 44 days ago, on February 11, 2020, with the intention of making the majority of my wealth trading. As you can see, I have stuck to that promise, making 99.3% of my money in trade (although I did go out and do some of the tutorial pvp missions, as I was bored of sitting in a station all day, and for other ... reasons ... as you will see)
My current income sources
So anyway, not much happened between Day 22 and Day 30. I traded some fuel blocks, bought some skills, etc.
I also had my first few major unsuccessful orders. I tried to buy a lot of things, my orders stagnated for several days, and it felt absolutely awful to cancel those orders and waste the broker's fee. But it's always better to admit that you made a mistake and move on**, rather than irrationally invest because you don't want to hurt your pride.** I then bought and sold a couple of cruisers and made some cash, enough to bring my balance up to around 90 million ISK when all was said and done.
I don't know whether to call this luck or skill, but I somehow found a ship where there was (relatively) a lot of trading activity going on, and yet the profit margin was over 60%. So I took a gamble and spent nearly all of my roughly 90 million ISK balance on it. This occurred on March 12, 2020, or Day 31.

Oh, and by the way, the Broker Relations update was on March 10 ... yeeaaahhh ... so every time I needed to update my single extremely risky order, that was another 400k ISK down the drain. Which seems like a small number, but is definitely a very large number when your total balance is only a few million ISK and you have no other way to make money (remember, I promised to not supplement my income too much with explo or mining or anything else).

So anyway, I felt extremely stupid sitting there and wasting a million ISK a day for an order that was never going to get satisfied. I realized that I was going to actually run out of ISK, and wouldn't be able to sell it again! This would be catastrophic! So I did what any self-respecting noob in my position would do: I boarded a free corvette and played the pvp tutorial missions!! Which were actually pretty fun. I didn't feel like I was cheating at my challenge, since my overall income from this was probably no more than 2 million ISK.

And one day later, someone fulfilled my order!! But this was going to be the REALLY tough part, because I was re-selling it for a lot more, which means that the re-listing costs would be proportionally higher as well. Every update now costed a whopping 1.1 million ISK. I was running out of cash FAST. I limited myself to only 1 update per day but it was still super scary...

My time was ticking and I had only 2 more day's worth of cash left. At this point, I was really desperate, and I placed some overpriced buy orders for frigates so that I could re-sell them quickly. The problem is, no one actually sold to them. I still have no idea why. So I had now worked myself into a hole: I had only 1 more order update worth of cash remaining.

In a last Hail-Mary of desperation, I decided to vastly under-price my sell order. I was officially out of cash. Like, completely out. I had only 17,212 ISK left.
And with my luck, someone undercut me by 100,000 ISK the next day. Big RIP. I felt like quitting EVE for a few weeks. Then I thought I might as well try to tour the various star systems in the neighboring regions, because I like spaceships and stars and space stations and they look cool. And then someone shot my frigate down in high sec space (????) but luckily I escaped with my pod. But either way, I was on a total downward streak. Like tilting, except it wasn't my fault - just random unlucky occurrences one after another.
There was one silver lining: all the other sellers, besides that one guy, decided to stay at their original prices. And they would have been stupid to follow me anyway. I was acting out of desperation.

Fast-forward two more days and it finally sells. This was my longest-running buy/sell ever. It took 9 days for my buy order to be satisfied and 5 days for my sell order to be satisfied - i.e. 2 weeks in total. But when all was said and done ... over 100 million sweet ISK in profits, from 1 single order! (I guess, 2, if you count the buy and sell separately) Very cool, very nice. I really had to work for that money!

P.S. this ship is now in extremely high demand with very few sellers, so it's not like you or I can just use this to make a free 100 million ISK every month.
P.P.S. I have a secret admirer on eve that downvotes my post as soon as I post it. It's happened 3 times so far! ILY, secret admirer! ❤️
submitted by Agent-008 to Eve [link] [comments]

Help - I don't know what broker to choose

I have a custody account on DeGiro and I have been investing in some ETFs for almost 2 years, now I want to diversify between platforms so I am thinking to open a new account and also because now I'm living in Denmark (DeGiro is available) but I'm planning to move back to Romania.
I am looking for a broker that has low/free fees, is well established and has a big variety of stocks/bonds and ETFs.
I read some reviews about Interactive Brokers and Trading 212 but I feel I'm missing something.
So my questions for you guys are:
1) What are the fees that you pay with your broker ?
2) Can I have a cash account on Trading 212 (I do not want to use margin) ?
3) What broker do you recommend for long term (10+ years) investment?
4) Can I buy fractional share on a cash account on IB?
5) Are there any "hidden fees" on IB or T212?
submitted by radugeorgee to eupersonalfinance [link] [comments]

The 3 Kinds of Cryptocurrency Traders that are Kicking Your Ass

The 3 Types of Cryptocurrency Traders that are Kicking Your Ass

For an investor to outperform the market, someone else must underperform.That is a simple arithmetic fact.
In a fair and regulated environment, investors have equal access to information. Winners and losers are determined by whoever can make a better prediction.
But cryptocurrency is the wild, wild west. Market participants don’t play fair and they can profit at the expense of others.
Here are the three types of traders that are kicking your ass
Insider Traders
Under Rule 10b5–1, the SEC defines insider trading as “any securities transaction made when the person behind the trade is aware of nonpublic material information.” Insider trading is illegal in almost all traditional markets. In a research paper published in 2010, Qin Lei found empirical evidence that insiders were able to consistently beat the stock market.
Over the last year, we’ve seen many high-profile cases of insider trading in the cryptocurrency market.
Coinbase** — The Bitcoin Cash Incident**
On December 19, 2017, Coinbase tweeted it would add Bitcoin Cash to its exchange. But before the announcement was made public, both the trading volume and the price of Bitcoin Cash suspiciously surged.
On March 1, Coinbase was hit with a class action lawsuit. The full court document is available here.
South Korea Financial Supervisory Service (FSS)
Even regulators are being investigated for insider trading. Korean FSS officials knew ahead of time that new cryptocurrency trading restrictions would be put in place. Yet, they still made trades before the announcement.
The chief of the FSS, Choi Hyung-sik, confirmed on Jan. 18 that trading violations had occurred. Despite being caught red-handed, another FSS official responded that there was technically “no code of ethics or conduct for virtual currencies and therefore difficult to issue any punishment.”
The examples mentioned above are just a few high-profile cases. Insider trading runs rampant in the cryptocurrency space. Very often, prices and trading volumes will pump right before an exchange announces a new coin.
To many, insider trading is no longer a surprise but rather something that “just happens” in an unregulated market.
Whales
A whale is simply a colloquial way to describe an investor who is able to manipulate markets by mobilizing large amounts of capital.
Most crypto investors treat whales like the boogeyman. They’ve never had a personal encounter, but swear that whales are responsible for large market swings everywhere.
In some cases there is strong evidence indicating that they are right. Recently, academic research has come out showing that large-scale price manipulation does happen. Here’s an example from 2013, where a single entity was largely responsible for pushing the price of Bitcoin from $150 to $1,000 in two months. Another paper that came out last week shows how large amounts of USDT was used to manipulate Bitcoin prices.
Here are a few techniques whales use to manipulate price.
Stop-loss hunting
Whales intentionally push the price down in order to trigger stop-loss orders.Then they turn around and buy coins from these stop-loss orders for cheap and wait for the market to recover.
This strategy works well for coins with low trading volumes and small order books. With enough coins, whales can push down the price by introducing a slew of market-price sell orders.
To show how this works, let’s imagine a scenario:
The goal is to drive the price down past $100, which may be a psychological breaking point for some people and therefore a likely place for stop-losses.
One can do this by:
  1. Placing a market sell order totaling 10 BTC, to drive the price down from $150 to $110
  2. Keeping the sell pressure on, as investors naturally start selling their holdings.
  3. Watching people’s stop-losses go off at $100 without their knowledge. This drives the price down further.
  4. Buying up all the stop-loss orders at $90 and under.
  5. Waiting for the market to recover before selling the coins.
Short/Long Hunting
This is another form of market manipulation, but one that only exchanges can pull off.
Let’s see how this works on Bitmex for BTC.
The price just has move slightly in the wrong direction to trigger a liquidation. When liquidations happen, the investor loses their entire margin and pays a big fat fee.
Because exchanges know exactly what prices will trigger these liquidations, they have both the capability and financial incentive to engineer price movements using bots.
To be clear, there is no evidence implicating Bitmex. But it is suspicious that low volume trading periods are followed by a furious uptick in volume. When this happens, liquidation tears through leveraged positions, leaving traders with nothing other than a fistful of trading fees.
BitmexRekt tweets these liquidations in real time. You can follow them here.
Spoofing
Another common strategy whales use to manipulate the market is called spoofing. It means to bid or offer with intent to cancel before the orders are filled.The goal of spoofing is to send false signals to investors.
Here’s an example of using this strategy to profit:
This also works in the opposite direction. By placing large sell orders, spoofers can send bearish signals and lure investors into selling their cryptocurrencies at a discount.
Bitfinex’d investigates an entity known as “Spoofy” operating on the Bitfinex exchange.
Wash Trading
The last strategy we’ll cover is wash trading. In a wash trade, an investor takes both buy and sell positions. This may be done in order to:
Usually wash trading is extremely hard to prove, as washed trades look very similar to real trades.
On July 27, however, Bitfinex unknowingly baited wash traders during the Bitcoin (BTC) fork to Bitcoin Cash (BCH). At the time of the fork, all BTC holders were to receive BCH commensurate with the amount of BTC they held.
To accommodate for BTC held in margin positions at the time, Bitfinex had to finesse the numbers. To quote the announcement:
BCH will be distributed to settled bitcoin wallet balances as of the UTC timestamp of the first forking block, which is expected to occur on August 1st, 2017.
The token distribution methodology will be:
  • All BTC wallet balances will receive BCH
  • Margin longs in BTC/USD and margin shorts in XXX/BTC will not receive BCH
  • Margin shorts in BTC/USD and margin longs in XXX/BTC will not pay BCH
  • BTC Lenders will receive BCH
Due to the net amount of BTC committed in margin positions at the time of the fork, the above methodology may result in Bitfinex seeing a surplus or deficit of BCH. As such, we will be resolving this discrepancy in the form of a socialized distribution coefficient. For example, currently, there are more longs than shorts on the platform, causing a distribution coefficient of ~1.091 (Meaning that for each qualifying BTC a user will receive 1.091 BCH). The actual coefficient will be calculated at the moment of the distribution.
These rules turned out to be game-able. Because Bitfinex did not charge BCH to open short positions leading up to the split, one could simply purchase 10 BTC and short 10 BTC. This way, you could collect free BCH without any exposure to BTC price volatility. If BTC drops, the shorts cancel out any loss. If BTC soars, the profits cancel out the short positions.
On July 27, there were more longs than shorts on the platform and the distribution coefficient was 1.091.
However, on August 1, the distribution coefficient moved to 0.7757.
Leading up to the fork, an enormous amount of short positions were created. And instead of prices going down, which is what usually happens when shorts increase so dramatically, prices actually went up.
To make matters even more dubious, shorts dropped by 24,000 on a single tick right after the fork.
The manipulation here was so obvious that even Bitfinex had to acknowledge it. They issued an official statement about the wash trading here.
Pump & Dump Group Executives
So we’ve talked about insider traders and whales.
The final type of traders we’re going to talk about are the pump & dump group executives.
Pump & dump (P&D) is a form of market manipulation that involves purchasing a cheap asset, artificially inflating its price, and then dumping the asset a higher price.
The cryptocurrency market is rife with such groups. Here are just a few:
Here’s howPump & Dumps work
  1. P&D executives find a coin that is easy to manipulate and easy to sell. I.e. A coin with a strong community, advertising potential, small order book, and low trading volume.
  2. Executives secretly accumulate the coin over time while trying not to affect the price.
  3. These executives spread their pump signals to their inner circle members who pay upwards of $300 for the privilege of hearing early signals.
  4. The first wave of pumpers start shilling on signal groups. They tell gullible investors that a pump is about to happen because of “new website updates”, or “new partnership announcements”, generally whatever angle they can spin.
  5. As the price rises, the P&D executives start dumping their coins.
  6. Once the executives are spent, they spread the signal to their paid members to begin dumping the coin.
  7. The price starts falling and like a game of soggy cookie, the slowest players lose.
Cryptomedication wrote a great piece exposing BravadoGroup and several large influencers in the crypto space planning large scale P&Ds.
The reason I single out P&D executives is because they are the only ones that consistently profit. They have the most control and the highest amount of influence.So much so that members are willing to pay $300 for the privilege of being used as pawns. The buyers in signal groups are even worse off. They are falsely led into buying into a promising, undervalued coin, without any knowledge that it will soon be dumped.

So you’re telling me the game is rigged and I’m boned, what should I do?

The simple answer is to stop actively trading.The more you try to time the market, the more you open yourself up to opportunities of getting screwed over.
Speculative trading is a zero-sum game. In order for investors to outperform the market, they require others to underperform the market. In an unfair market, the average investor will more likely lose to people who have an unfair advantage and are gaming the market.
This is why I genuinely believe the average investor should just index the entire market. If you’re in it for the technology and the long-term growth, why bother speculating at all? Just hold a small piece of the entire cryptocurrency market. Indices has been proven to beat 95% professional traders in equity markets over a 15 year-period.
This is why I built HodlBot. It’s an easy way to diversify across the top 20 cryptocurrencies by market cap. It indexes 87% of the entire cryptocurrency market. Every week, your portfolio automatically rebalance so you’re always tracking the top 20 coins. It helps you get some quiet sleep while active traders lie awake, staring at their phones. You can read more about it here.
The best thing about a total market index is that it can guarantee market performance. Active trading, on the other hand, cannot.
I don’t mean to spread FUD by pointing out all the different ways traders are ripping investors off. I just want investors to know what exactly free and unregulated markets really mean. We’re not protected by the SEC or any other sanctioning bodies. While this comes with unbridled freedom and breathing room for rapid innovation, it also means all foul play is fair play.
It’s a brave new world out there filled with all kinds of splendor and danger. If you’re going to take your chances, please make sure you’re prepared.
submitted by haggenballs to BitcoinMarkets [link] [comments]

$4k/month dropshipping tiny things.

Hey - Pat from StarterStory.com here with another interview.
Today's interview is with Amanda Austin of Little Shop of Miniatures, a brand that sells dollhouse miniatures.
Some stats:

Hello! Who are you and what business did you start?

My name is Amanda Austin, and I’m the founder of Little Shop of Miniatures.
My ecommerce store offers thousands of dollhouse kits and dollhouse miniatures for sale. My main customers are hobbyists who enjoy assembling, building, and furnishing dollhouses, though customers have also included kids who need miniatures for school projects and companies creating model displays for corporate trade shows
I launched my store in November 2017; right now my revenue averages about $4,000/month (of course it’s much higher during the holidays!). Summer tends to be the slowest time of the year since this hobby is most popular during the cold weather months. My gross margin is about 35%.
I run a dropship store, which means I pay a supplier to pick, pack, and ship the order to my customer. I have two wholesalers who dropship for me and they are both great. My main drop shipper has about 20,000 different dollhouse miniatures and dollhouse building supplies in stock!
image

What's your b ****ackstory and how did you come up with the idea?

I was unhappily working in marketing for a Fortune 500 insurance company when I started looking at ways to create a new income stream. I became interested in ecommerce and invested in a course to learn more. I compiled a list of keywords for products that had decent search volume and not terribly competitive to rank for in organic search. I used Long Tail Pro to get ideas--I had so many when I first started!
A bunch of keywords in the dollhouse miniatures space fit the bill. I used Long Tail Pro and looked for keywords that were competitive--which on there is a score in the twenties or low thirties. I also wanted them to have at least 2,000 searches per month. This is not a ton, but five keywords with that search volume that are not that competitive can lead to a decent number of organic traffic if you build your site the right way. My advice to aspiring entrepreneurs is to find a niche with a nice handful of keywords you can rank for with quality content and a nice backlinking strategy. Don’t try to be number one for some saturated keyword that has a million searches a month. Go for keywords where you stand a chance of ranking--this is usually so-called long tail keywords that are really phrases--for example, “wooden dollhouse furniture” instead of just “dollhouse.”
What also tipped the scale for me was the fact that all the sites selling minis were atrocious. So I flew out to Las Vegas to attend one of the biggest trade shows for dollhouse miniatures. It was there where I met a company willing to drop ship for me. This was a huge relief because I feature thousands of dollhouse miniatures on my site and I did not want to invest in a warehouse or buy all that inventory!
This niche also appealed to me because my grandma made me a dollhouse when I was a kid. There was a miniatures store in my local mall and I was obsessed with it--I probably spent every allowance and communion dollar I had there. So I had some familiarity and affinity for minis.
I did a lot of the legwork for my business while still working full time. This included picking my niche, choosing a shopping cart, finding suppliers, and choosing a name and logo. Eventually, I did quit my job to create the site. I had savings to tide me over during that time and my husband put me on his health insurance.
image

Describe the process of launching the business.

I used Shopify to set up my store--I love it! I probably asked their support team a million questions in the first few months.
My background was in copywriting and websites. I knew how to write for both search engines and a reader. So after I uploaded about a bazillion products, I created a blog with tons of rich keywords related to dollhouse miniatures. I’ve been rather lazy about updating content, but to this day it brings thousands of people to my site for free every month. Some of my most popular posts include “9 Free Dollhouse Miniatures Printables Site” and “How to Choose a Dollhouse Glue.”
image
I used my own savings to start this business. The actual costs were low--below $5,000. The biggest expense was the opportunity cost of not working a day job for several months to get the site up and running.
I launched the site on November 11, 2017. It took several days to get my first customer and the first year was pretty slow. What I learned during this time was that I get very lonely working from home by myself all day. By the time winter rolled around, I was really going crazy. That, combined with the trickle of money coming in, led to me accept a full-time job at a successful business with a large online presence in my town.
Today, I manage their Shopify, Amazon, brand partnerships, email marketing, and digital advertising. It was the right move: I enjoy the work and I learn a lot there every day about how to run an ecommerce site. I run my store during weekends, evenings, and lunch breaks.

Since launch, what has worked to attract and retain customers?

Here are some ways I grew my business:
1 - Great design
Making my site more attractive and easier to use than the competition. This was not hard to do--just look at some of my competition to see what I’m talking about.
2 - Invested in SEO
I had three main keywords I wanted to rank for and I used them in my product descriptions, alt tags, meta descriptions, title tags, etc.
Probably the best thing I did was write really helpful content for my blog. I get a TON of traffic this way.
I then created Pinterest pins for several posts. I get about 700 referrals from Pinterest a week from just three pins that are getting reshared. I am hardly a designer, but you can create free pins very easily in Canva. Just use one of their super easy Pinterest pin templates. I’d create pins in there, save the image to my desktop, and then upload the pin and link back to my site. I upload these pins to board on a Pinterest profile I created just for this business--it’s full of miniatures and dollhouse tips.
image
image
3 - Roundup posts
I did some roundup posts about the best blogs and Instagram accounts to follow if you love dollhouse miniatures. I’d reach out to each influencer and ask if I could include them.
They were usually really flattered and gave me a backlink and traffic. I also befriended The Daily Mini, who has 100K plus followers on Instagram. She featured me on her account on and on her website. She later included some of my products in a book she published!
4 - Set up a welcome drip email
I set up a welcome series in Klaviyo. I give people a coupon in exchange for their email. Once I have their email, I have a 17 email long welcome series that’s a mix of interesting content and promos. This, along with an abandoned cart email, is a must.
I did boost some Facebook posts and even dabbled in Google Ads. But my margins aren’t good enough to support digital advertising. So right now, I rely almost exclusively on ranking high on the first page of Google and on returning customers. About 11% of my traffic is from returning customers.

How are you doing today and what does the future look like?

The store was profitable from the first month it opened--if I remember correctly, I think I cleared a $50 profit that first month! Now, I am making about $800 in profit each month. It will be about triple that for the holiday season. My gross margin is about 40% and my operating margin is about 35%. From what I understand, this is pretty good for a drop ship store. Right now, Shopify said my store grew 212% year over year. I probably spend about two hours a week on it.
My main goal is to add more products to the site--I have about 2,300 uploaded but my supplier has something like 20,000 to choose from! I also need to get better at email marketing. My blog could also benefit from more frequent posts. I must keep my top spot on organic Google search!
I toy with the idea of going big and owning this industry. But with a young and growing family, it just isn’t the right time. For now, I just keep gathering intelligence on my competitors and think about where I might want to go with this.

Through starting the business, have you learned anything particularly helpful or advantageous?

Digital advertising is expensive and not worth it if you don’t have a high margin product. Because I dropship, I soon realized that I need to steer clear of that and instead invest in good SEO and putting out good content.
Do some keyword research--once you know the keywords to target, create some great content around them.

What platform/tools do you use for your business?

I love Shopify! It’s so easy to use and no other ecommerce platform really compares. Their support team is the best I’ve ever worked with.
Klaviyo is the email marketing platform you want if you’re in the ecommerce space. I recently got the owner of the company at my day job to switch over.
Some apps I get through the Shopify store that I really like include:

What have been the most influential books, podcasts, or other resources?

Steve Chou’s My Wife Quit Her Job is a great podcast if you’re interested in starting an ecommerce store. He interviews super successful ecommerce store owners, so I always learn a ton when I tune in.
I also love the How I Built This podcast. I’m always reminded that we all start out clueless with little more than an idea and that everyone is figuring it out as they go along.

Advice for other entrepreneurs who want to get started or are just starting out?

My business is a small, mostly passive income stream and I’m okay with that. At this stage in my life with an infant daughter, I am just not in a place to go all in with a business.
There is so much more I could be doing with my store, but right now I am loving the extra income stream that allows me to work part-time at my day job. Beyond that, I still find it thrilling when I get a notification that someone placed an order. I’ve had many hundreds of orders at this point, but it never gets old!
I also learned that no business is totally passive. My store stopped communicating with my drop shipper’s FTP right before Black Friday, which was when I gave birth to my first child. Essentially, my store was listing items for sale that were out of stock. So I had to send an email to my customers letting them know which items were out of stock and did they still want the order? It was hell and I was actually emailing people in the early stages of labor! It took me 6 months to get the issue fully solved.
At several times, I thought of closing the store because it was beyond stressful with a newborn keeping me up all hours of the night. Luckily, I’m stubborn as hell and just kept pecking away at it. So I would just warn others to expect bumps in the road--and to expect them to come at the worst possible time. Also remember that there is a solution to every problem and you’ll be glad you found it once you’re on the other side.

Where can we go to learn more?

image
Liked this text interview? Check out the full interview with photos, tools, books, and other data.
For more interviews, check out starter_story - I post new stories there daily.
Interested in sharing your own story? Send me a PM
submitted by youngrichntasteless to starter_story [link] [comments]

$4k/month dropshipping tiny things.

Hey - Pat from StarterStory.com here with another interview.
Today's interview is with Amanda Austin of Little Shop of Miniatures, a brand that sells dollhouse miniatures.
Some stats:

Hello! Who are you and what business did you start?

My name is Amanda Austin, and I’m the founder of Little Shop of Miniatures.
My ecommerce store offers thousands of dollhouse kits and dollhouse miniatures for sale. My main customers are hobbyists who enjoy assembling, building, and furnishing dollhouses, though customers have also included kids who need miniatures for school projects and companies creating model displays for corporate trade shows
I launched my store in November 2017; right now my revenue averages about $4,000/month (of course it’s much higher during the holidays!). Summer tends to be the slowest time of the year since this hobby is most popular during the cold weather months. My gross margin is about 35%.
I run a dropship store, which means I pay a supplier to pick, pack, and ship the order to my customer. I have two wholesalers who dropship for me and they are both great. My main drop shipper has about 20,000 different dollhouse miniatures and dollhouse building supplies in stock!
image

What's your b ****ackstory and how did you come up with the idea?

I was unhappily working in marketing for a Fortune 500 insurance company when I started looking at ways to create a new income stream. I became interested in ecommerce and invested in a course to learn more. I compiled a list of keywords for products that had decent search volume and not terribly competitive to rank for in organic search. I used Long Tail Pro to get ideas--I had so many when I first started!
A bunch of keywords in the dollhouse miniatures space fit the bill. I used Long Tail Pro and looked for keywords that were competitive--which on there is a score in the twenties or low thirties. I also wanted them to have at least 2,000 searches per month. This is not a ton, but five keywords with that search volume that are not that competitive can lead to a decent number of organic traffic if you build your site the right way. My advice to aspiring entrepreneurs is to find a niche with a nice handful of keywords you can rank for with quality content and a nice backlinking strategy. Don’t try to be number one for some saturated keyword that has a million searches a month. Go for keywords where you stand a chance of ranking--this is usually so-called long tail keywords that are really phrases--for example, “wooden dollhouse furniture” instead of just “dollhouse.”
What also tipped the scale for me was the fact that all the sites selling minis were atrocious. So I flew out to Las Vegas to attend one of the biggest trade shows for dollhouse miniatures. It was there where I met a company willing to drop ship for me. This was a huge relief because I feature thousands of dollhouse miniatures on my site and I did not want to invest in a warehouse or buy all that inventory!
This niche also appealed to me because my grandma made me a dollhouse when I was a kid. There was a miniatures store in my local mall and I was obsessed with it--I probably spent every allowance and communion dollar I had there. So I had some familiarity and affinity for minis.
I did a lot of the legwork for my business while still working full time. This included picking my niche, choosing a shopping cart, finding suppliers, and choosing a name and logo. Eventually, I did quit my job to create the site. I had savings to tide me over during that time and my husband put me on his health insurance.
image

Describe the process of launching the business.

I used Shopify to set up my store--I love it! I probably asked their support team a million questions in the first few months.
My background was in copywriting and websites. I knew how to write for both search engines and a reader. So after I uploaded about a bazillion products, I created a blog with tons of rich keywords related to dollhouse miniatures. I’ve been rather lazy about updating content, but to this day it brings thousands of people to my site for free every month. Some of my most popular posts include “9 Free Dollhouse Miniatures Printables Site” and “How to Choose a Dollhouse Glue.”
image
I used my own savings to start this business. The actual costs were low--below $5,000. The biggest expense was the opportunity cost of not working a day job for several months to get the site up and running.
I launched the site on November 11, 2017. It took several days to get my first customer and the first year was pretty slow. What I learned during this time was that I get very lonely working from home by myself all day. By the time winter rolled around, I was really going crazy. That, combined with the trickle of money coming in, led to me accept a full-time job at a successful business with a large online presence in my town.
Today, I manage their Shopify, Amazon, brand partnerships, email marketing, and digital advertising. It was the right move: I enjoy the work and I learn a lot there every day about how to run an ecommerce site. I run my store during weekends, evenings, and lunch breaks.

Since launch, what has worked to attract and retain customers?

Here are some ways I grew my business:
1 - Great design
Making my site more attractive and easier to use than the competition. This was not hard to do--just look at some of my competition to see what I’m talking about.
2 - Invested in SEO
I had three main keywords I wanted to rank for and I used them in my product descriptions, alt tags, meta descriptions, title tags, etc.
Probably the best thing I did was write really helpful content for my blog. I get a TON of traffic this way.
I then created Pinterest pins for several posts. I get about 700 referrals from Pinterest a week from just three pins that are getting reshared. I am hardly a designer, but you can create free pins very easily in Canva. Just use one of their super easy Pinterest pin templates. I’d create pins in there, save the image to my desktop, and then upload the pin and link back to my site. I upload these pins to board on a Pinterest profile I created just for this business--it’s full of miniatures and dollhouse tips.
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3 - Roundup posts
I did some roundup posts about the best blogs and Instagram accounts to follow if you love dollhouse miniatures. I’d reach out to each influencer and ask if I could include them.
They were usually really flattered and gave me a backlink and traffic. I also befriended The Daily Mini, who has 100K plus followers on Instagram. She featured me on her account on and on her website. She later included some of my products in a book she published!
4 - Set up a welcome drip email
I set up a welcome series in Klaviyo. I give people a coupon in exchange for their email. Once I have their email, I have a 17 email long welcome series that’s a mix of interesting content and promos. This, along with an abandoned cart email, is a must.
I did boost some Facebook posts and even dabbled in Google Ads. But my margins aren’t good enough to support digital advertising. So right now, I rely almost exclusively on ranking high on the first page of Google and on returning customers. About 11% of my traffic is from returning customers.

How are you doing today and what does the future look like?

The store was profitable from the first month it opened--if I remember correctly, I think I cleared a $50 profit that first month! Now, I am making about $800 in profit each month. It will be about triple that for the holiday season. My gross margin is about 40% and my operating margin is about 35%. From what I understand, this is pretty good for a drop ship store. Right now, Shopify said my store grew 212% year over year. I probably spend about two hours a week on it.
My main goal is to add more products to the site--I have about 2,300 uploaded but my supplier has something like 20,000 to choose from! I also need to get better at email marketing. My blog could also benefit from more frequent posts. I must keep my top spot on organic Google search!
I toy with the idea of going big and owning this industry. But with a young and growing family, it just isn’t the right time. For now, I just keep gathering intelligence on my competitors and think about where I might want to go with this.

Through starting the business, have you learned anything particularly helpful or advantageous?

Digital advertising is expensive and not worth it if you don’t have a high margin product. Because I dropship, I soon realized that I need to steer clear of that and instead invest in good SEO and putting out good content.
Do some keyword research--once you know the keywords to target, create some great content around them.

What platform/tools do you use for your business?

I love Shopify! It’s so easy to use and no other ecommerce platform really compares. Their support team is the best I’ve ever worked with.
Klaviyo is the email marketing platform you want if you’re in the ecommerce space. I recently got the owner of the company at my day job to switch over.
Some apps I get through the Shopify store that I really like include:

What have been the most influential books, podcasts, or other resources?

Steve Chou’s My Wife Quit Her Job is a great podcast if you’re interested in starting an ecommerce store. He interviews super successful ecommerce store owners, so I always learn a ton when I tune in.
I also love the How I Built This podcast. I’m always reminded that we all start out clueless with little more than an idea and that everyone is figuring it out as they go along.

Advice for other entrepreneurs who want to get started or are just starting out?

My business is a small, mostly passive income stream and I’m okay with that. At this stage in my life with an infant daughter, I am just not in a place to go all in with a business.
There is so much more I could be doing with my store, but right now I am loving the extra income stream that allows me to work part-time at my day job. Beyond that, I still find it thrilling when I get a notification that someone placed an order. I’ve had many hundreds of orders at this point, but it never gets old!
I also learned that no business is totally passive. My store stopped communicating with my drop shipper’s FTP right before Black Friday, which was when I gave birth to my first child. Essentially, my store was listing items for sale that were out of stock. So I had to send an email to my customers letting them know which items were out of stock and did they still want the order? It was hell and I was actually emailing people in the early stages of labor! It took me 6 months to get the issue fully solved.
At several times, I thought of closing the store because it was beyond stressful with a newborn keeping me up all hours of the night. Luckily, I’m stubborn as hell and just kept pecking away at it. So I would just warn others to expect bumps in the road--and to expect them to come at the worst possible time. Also remember that there is a solution to every problem and you’ll be glad you found it once you’re on the other side.

Where can we go to learn more?

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Aphria Q2 F 2018 Rundown.

Well I had a chance to look foolish with a 38% sales increase and $2.5 million EBITDA, and I look half foolish.
Instead of doing an MDA rundown I am going to analyze this in my more traditional fashion… like when I write credit… Income Stmt, cash flow/EBITDA and then balance sheet items of note. I’ll draw from MDA for colour.
They did beat the street EPS of 0.00 at 0.04.
Sales:
Up 39%... [not 38%... but I missed by 2% last Q so I am trending favourably] to $8.5 million. Fist Q without inventory constraints in 4 q’s. And by “inventory constraints” I don’t mean they had piles of harvested and just couldn’t get it processed to Finished Goods as some other LP’s have used in the past for a sales increase excuse.
They had $6.0 million in total inventory last Q end [unfortunately not broken into Finished Goods and WIP for me] and they sold $5.4 of that Inventory this Q [$2.7 in production costs and $2.7 in FVI that was grossed up at harvest]. So they blew through almost all of the previous Q’s inventory total. A good sign!
Of the 1,237 KGs sold vs 852 kgs last Q [up 45%]
• New patients on boarded in Q was 113 kgs or 9.1% by weight … last Q 142 kg so a slide of 20%.
• Existing patients 695 kgs or 56% by weight versus 518 kgs last Q … an increase of 34%
o Existing patient cost less than new patients. So retention is and growth is good. o Vic mentioned 6 of last 8 weeks they have signed over 1,000 patients a week but he recognizes that the patient count stat is not accurate do to dual scripts.
• Wholesale 429 Kgs 34% by weight versus 191 kgs last Q… this 238 kgs increase [+263%] is likely the Scientus Pharma deal which still has 3 Q’s to run. They are taking 25,000 full plants annually valued at $1.2 million per Q as per press release [If someone could do the math on avg kgs per plant I might be able to break out wholesale to other LP. What is weight from 6,250 plants??]
• $1.9 million of [22%] overall was to Veterans up 12% QoQ and 46% from Q2 F17
Price per gram [non w/s] went up by 2% QoQ and 5.6% over 6 months. Largely attributable to a shift in mix to non w/s oil to 34% sales [I believe that was figure from CC] up from 32%.
Cost of sales…
• Production costs were 32% of sales versus 22% last Q…this increase is the transferring of plants from vegetative rooms/environment to flower rooms/environment 2-3 weeks later than optimal as they tried to guess HC approval of PII. So this led to lower bio mass at harvest [THC and CBD were on target] which meant as % of sales the costs went up…. I kick myself a bit for not asking them about this last Q… I heard the story at the AGM [but as cost accounting wasn’t my strongest mark in Uni] I thought this was all contained last Q. I have a call in to make sure there is no overhang on this front for Q3…. Call confirms no hangover to Q3!! When yield is low it causes Unabsorbed overhead. Unabsorbed overhead is a period expense. So the cost has all flushed through.
When you add Production costs of $2.7 to FVI of $2.7 million [this was the pulled forward profit booked at harvest to inventory. When it gets sold they have to reverse it out] you realize that Aphria left 50% of profit for the sale of the inventory versus taking it all at harvest like almost every single other LP. This 50% FVI is a notch up from last Q 46% FVI add back which is a result of previous Q’s decreasing cash cost per gram [so more FVI was required to balance at $3.75 gram for bud,… last Q as cash cost was less Inv Cis = FVI plus Cash Cost. So if you hold inv cost to $3.75 and cash cost is X and FVI is a plug].
GoB on harvested but not yet sold and growing inventory was $3.1 million versus last Q $4.3 million. So this means the delta in their KGs from the new PII has decreased. Next Q will be interesting to see if this reduces again. All depends on PIII launch as the growing assets will increase but will inventory as PIII doesn’t harvest until April, after Q end.
The net FVI loss GOB credit to COGS was $444k vs last Q of $3.131 million.
So Gross Margin net of FVI and GoB was $5.8 million or 68% versus $4.4 million at 78% last Q. They have said this is one time only on yield issues. We saw a decrease in Gross Margin % last year in Q3 F17 as a result of lack of lumens and supplemental lighting that impacted yield. They fixed this in spades in Q4. It’ll be interesting to see how this bounces back. Although they will have costs of PIII without revenue to offset next Q providing some headwind. CannTrust had a 69% GM last Q while CGC and Leaf had 56% and 72%, respectively.
What they lost in GM% of sales they fought back well in Operating expenses.
Consider last Q they had Opex of of $6.5 million versus sales of $6.1 million. This Q they had Opex of $7.3 million versus sales of $8.5 million. So from a deficit of $0.4 million to a surplus of $1.2 million, or $1.6 million swing DESPITE the lower yield. THIS IS A BRIGHT SPOT!!
G&A actually went down as a percentage of sales from 28% to 23%. With QoQ decreases in absolute $’s in exec compensation, office and general off set by increase in salaries and wages and Prof fees.
Selling and Marketing notched up 1% of sales but this is as they get ready for rec and Vic said $500k of the $2.8 was attributable to getting rec brands ready. The reason the Selling expense as % of sales didn’t go up further is that the sales of plants to SP [ballparked at $1.2 million for the Q]. This SP sale may have a lower gross margin but they don’t have the selling expenses that medical retail has.
SGA combined made up 56.35% of sales versus 60% last Q and the lowest % in last 5 Q’s and 0.5% under TTM. SGA TTM of 56.85% at Aph is higher than the two lowest in the peer group: TRST of 55% 9 month trailing and LEAF 46% TTM. For comparison CGC is 83% TTM and ACB is 90%.
Share based compensation
Share based compensation was down 15% to 26% of sales… but I am believing more and more this item is a 6 month cycle and should be compared over longer periods of time. TRST, OGI, LEAF and Aph all run in low 20% in SBC where as CGC runs at 31% and Cronos at 48% on TTM
Operating income adjusted for FVI and GoB was negative $1.590 million versus a negative of $1.748 million last Q…. So this actually improved QoQ. If the 10% margin compression QoQ due to yield did not happen this would have been $0.850 million better. So not positive but better. Last Q GM was also depressed due to overhead of PII without corresponding sales of PII. With F17 gross margin they are operationally profitable. With PIII coming on line in Q3 we will still have minor timing overhang even if yields bounce back.
Non Operating income of $7.9 million was largely the result of $6 million gain on long term investments [$1 million on Copperstate, $1.7 TS, $3.0 nuuverra and CRZ $0.7 accounting for the bulk of improvement] and $1.4 million in Finance income. As the valuations of the Level 1 hierarchy were done on Nov 30 and we have had a run up in the sector… if it holds… this will be a big $$ amount n Q3 [TS will also move to Level 1 valuation when merged with DOJA, as Doja is publicly traded].
Net Income was $7.0 million but adjusted for GoB and FVI was $6.4 million.
Adjusted EBITDA was $1.6 million versus $1.7 million last Q. And they had to work much harder to make it, as on % sales basis it dropped from 28% to 19% QoQ versus a F2017 of 30%. TRST was the only other positive Adj EBITDA LP last Q at $1.2 million or 20% of sales. [with TRTS reported growth we may have a new Q Adj EBITDA leader next Q but they also had overhead of new grow without revenue. Will be interesting]
Nine Q’s of positive EBITDA is waaaay ahead of everybody else.
TTM EBITDA is $6.7 million… and industry leader. TRST trailing over nine months is $1.7 million for comparison. LEAF’s Adjusted EBITDA has crapped the bed since VAC changes.
I still have a problem with companies I invest in not being operationally profitable. But they are showing trend to improvement. [Trend is big with me.] Although I should give value to the investments, as aph has been upfront about also being an investment vehicle. Problem with investment profitability is it doesn’t generate cash until sold.
The Q they line up Gross Margin and investment Income is the Q they rip the top off this.
Balance Sheet items of note:
Cash and marketable secs $172 million plus $109 million in new raise less commitments [2018-19] of $54 million less $10 million to TS HIKU less $5 for Talbot street property = $212 million to go shopping and filling the DD investment [they said Aph would provide a loan to “Grow Co” to back fill what banks will not.]
Inventory. I wished they showed Finished Goods and WIP breakdown…. $8.3 million: $5.2 bud, $2 trim and Oil $1 million… FVI component of $5.4 million [profit pulled forward to harvest] is 62% versus 60% last Q a 1% increase in bud and trim each is the reason. A good base to continue 10-20% sales growth next Q [Note: Next Q, while it will have sale of 6,250 plants to SP, this will not be a new event so sales growth will have to come from traditional sources].
Biological assets decreased by $2 million to $1.4 million. These are the plants that are growing. So they may have just had a harvest and the plants are in a lower valued state [eg. Veg versus Flowering].
PPE continues to grow…after $19 million in Q1 it grew another $42 million in Q2. Long term investments too… $23 in Q1 and $9 in Q2.
Accrued and A/P are up to $16 million… my guess is this is construction related.
Other important news… PIII is still scheduled for first revenue by late May/18. This is all HC determinants at this point. PIV first sale for Jan/19.
That’s what I got… I’ll leave the CC discussions to other threads.
GoBlue
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