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Hmmm... if you don't day-trade and you don't use dROI, what Starbond tool do you use?

Posted by: RogerMore on Apr 27, 10:09 in response to RHAWK's post "If It Makes You Happy....

To give you an idea of my starbond strategies, I'll explain what I do in my huge port and my fund.

The large port has enough money to take a position on everything, but that doesn't mean I take a position on every starbond.  The ones I do invest in are:

- any starbond with a dROI over 0.2. I find that starbonds with lower dROI don't attract much trader attention, and I can bleed a lot if I make these investments.  The risk to me is that things change, but my weekly update of my spreadsheet mitigates this risk.  It flags when I have starbonds that are losing cash, or when I am holding a starbond in the "wrong" direction.

- any starbond that is going to have a big adjust (like $300K or more). These generally attract trader attention. The risk is that large adjusts with a low dROI and a long way out, and things can change. I mitigate these risks by playing close attention to news, and also by looking at the current price of the moviestock and what I expect it to delist at.

- any starbond that will be dropping a big movie out of its TAG, and does not look like replacing it with a big movie.  This is a purely speculative investment. I figure these bonds will drop in price over the long term, because there's no reason for anyone to buy them. The risk is that there is some news, but I watch the news closely.

- starbonds that are likely to delist. Again, a purely speculative investment. I figure these bonds will gravitate to their TAG over time. The main risk is that they get attached to a new moviestock, but the weekly update and following news mitigates this risk also.

 

In my fund, I obviously take a different approach. I think it's important for any fund to take a max (or as max as they can) position on any opener. But my fund is starbond-driven - I can only invest in movies that have certain starbonds attached.  In managing the fund, I keep a balance between these two themes.  I set aside a portion of H$ to invest in Starbonds. Up to half of the portfolio, and never less than $10M, depending on how much I need to hold the openers. It's not scientific - at the moment I am max AVNGR and only have about $12M in bonds. I'll probably up the Starbond holdings to somewhere from $15M-$20M after the adjust (and will divest by the time BATM3 opens). 

As cash is more limited, my starbond investments are weighted towards dROI.  If there's some quick money to be made by investing in a starbond that adjusts in a couple of days, I might switch out of a high-dROI bond into a lower-dROI bond, betting that the higher-dROI one will not change much in price. dROI is certainly the main factor though.

I don't compare moviestock dROI and starbond dROI as it's impossible. But setting aside a certain # of dollars for bonds is common practice. Knowing how much dROI a starbond has is also useful for port management. If you are short on cash, you have more information on which Starbonds are least likely to move in price - these are the ones that would make good divestments to free up cash for better investments.

I found an interesting example of why context is needed wth respect to the Post Adjust Bond Show, with respect to dROI....   Buy StarBond Fund 18 on Apr 26, 12:46

bond1=best   islander on Apr 26, 12:48

perfect example of the flaw with droi   RazorHawk on Apr 26, 15:21

Like every other factor in making Starbond investments, dROI is a tool that can be used and/or ignored by traders as appropriate.   RogerMore on Apr 26, 17:48

This was not meant as a criticism of your hard work. Only to point out context necessary to make good use of it.   mrbinns on Apr 26, 20:15

um... (don't know what to put here ~ again)   RHAWK on Apr 26, 21:48

Um..How can we search for Fembot's thoughts on trading? {nm}   dioneta on Apr 27, 14:53

um...   RHAWK on Apr 26, 20:50

I suppose it depends what your definition of fun is.   RogerMore on Apr 26, 23:07

"If It Makes You Happy....   RHAWK on Apr 27, 09:04

half of my message is missing :( {nm}   RHAWK on Apr 27, 09:05

Hmmm... if you don't day-trade and you don't use dROI, what Starbond tool do you use?   RogerMore on Apr 27, 10:09

he says they're attached to the same movie, so surely they adjust over the same period {nm}   Jane_Citizen on Apr 27, 00:35

um...   RHAWK on Apr 27, 08:20

to wit:   Jane_Citizen on Apr 28, 19:08

No {nm}   RHAWK on Apr 29, 09:47

Yes, for the purposes of comparing the three examples it is. {nm}   Jane_Citizen on Apr 30, 17:34

no it isn't...   RHAWK on Apr 30, 20:18

Answers...(no fair peeking until you have an answer written down)   Buy StarBond Fund 18 on Apr 26, 12:52

Fantastic debate between some of the heavy hitters!   srrichardson on Apr 26, 23:07

In my experience, actual dROI (rather than calculated dROI) is larger for movies that have a higher next adjust over a span of 3 days.   PRodQuanta on Apr 27, 11:08

Implying that I actually use a mix of both investment strategies and it works great. Thanks to both of you. {nm}   PRodQuanta on Apr 27, 11:10

Heh - I thought I knew what you meant until I read your IM. {nm}   RogerMore on Apr 27, 13:28

I am not sure what you mean because your terminology is off....BUT   Buy StarBond Fund 18 on Apr 27, 20:33

I'm assuming dROI is daily Return On Investment (this very well could be wrong, I haven't checked). My explanation is inside   PRodQuanta on Apr 28, 09:13

This excludes any bounce phenomena {nm}   PRodQuanta on Apr 28, 09:31

This is known as the Bounce. It's something that mrbinns (in particular) does very well, and I assume it's what Razorhawk does also.   RogerMore on Apr 28, 09:39

(Oh actually, it's not the Bounce - but I think my IM still has it) {nm}   RogerMore on Apr 28, 09:41

Yes, I believe you have the gist. Playing the players/the bounce is somewhat different. It boils down to dROI ~ 1.5ROI in first ~1.5 days. {nm}   PRodQuanta on Apr 28, 10:28

I'd short all 3. If they become popular, you can sell at the estimated delist early, otherwise, you will at least cover the 2%, likely more {nm}   arf on Apr 28, 22:41





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