jm + stocks   7

Kevin Lyda's mega pension post
Cutting and pasting from Facebook for posterity... there are some really solid tips in here.

'Some people plan their lives out and then there are people like me who randomly do things and suddenly, in retrospect, it looks like a grand plan has come together. In reality it's more like my subconscious pulls in useful info and pokes me to go learn things as required. If you live/work in Ireland, the following "grand plan" might be useful.

This year has apparently been "figure out how to retire" year. It started late last year with finally organising all my private Irish pensions (2 from employers, 1 personal). In the process I learned the following:

* Many Irish pension plans allow you to start drawing down from them at age 50. There are downsides to this, but if you have several of them it allows you more room to avoid stock market downturns when you purchase annuities.

* You can get 25% of each pension as a tax-free lump sum.

I also learned a few property things. The key thing is that if you have a buy-to-let property you should *not* pay off its mortgage early. You can deduct 75% of the interest you pay against the taxes you'd owe for rental income. That means the interest you pay will essentially be close to or even under the rate of inflation. A residential mortgage might have a lower interest rate nominally, but the effective interest rate is higher.

The Irish state pension is changing. If you are 68 after 2020 the rules have changed - and they're now much simpler. Work for 10 years and you get the minimum state pension (1/3 of a full pension). Work for 20, you get 2/3 of of a state pension. Work for 30, you get a full pension. But you can't collect it till you're 68 and remember that Irish employers can apparently force you to "retire" at 65 (ageism is legal). So you need to bridge those 3 years (or hope they change the law to stop employers from doing that).

When I "retired" I kept a part time job for a number of reasons, but one was because I suspected I needed more PRSI credits for a pension. And it turns out this was correct. Part-time work counts as long as you make more than €38/week. And self-employment counts as long as you make more than €5,000/year. You can also make voluntary PRSI contributions (around €500/year but very situation dependent).

If you've worked in Europe or the US or Canada or a few other countries, you can get credits for social welfare payments in those countries. But if you have enough here and you have enough for some pension in the other country, you can draw a pension from both.

Lastly most people I've talked to about retirement this year have used the analogy of legs on a stool. Every source of post-retirement income is a leg on the stool - the more legs, the more secure your retirement. There are lots of options for legs:

* Rental income. This is a little wobbly as legs go at least for me. But if you have more than one rental property - and better yet some commercial rental property - this leg firms up a bit. Still, it's a bit more work than most.

* Savings. This isn't very tax-efficient, but it can help fill in blank spots some legs have (like rental income or age restrictions) or maximise another legs value (weathering downturns for stock-based legs). And in retirement you can even build savings up. Sell a house, the private pension lump sum, etc. But remember you're retired, go have fun. Savings won't do you much good when you're dead.

* Stocks. I've cashed all mine in, but some friends have been more restrained in cashing in stocks they might have gotten from employers. This is a volatile leg, but it can pay off rather well if you know what you're doing. But be honest with yourself. I know I absolutely don't know what I'm doing on this so stayed away.

* Government pension. This is generally a reliable source of income in retirement. It's usually not a lot, but it does tend to last from retirement to death and it shows up every month. You apply once and then it just shows up each month. If you've worked in multiple countries, you can hedge some bets by taking a pension in each country you qualify from. You did pay into them after all.

* Private pension. This can also give you a solid source of income but you need to pay into it. And paying in during your 20s and 30s really pays off later. But you need to make your investments less risky as you get into your late 50s - so make sure to start looking at them then. And you need to provide yourself some flexibility for starting to draw it down in order to survive market drops. The crash in 2007 didn't fully recover until 2012 - that's 5 years.

* Your home. Pay off your mortgage and your home can be a leg. Not having to pay rent/mortgage is a large expense removed and makes the other legs more effective. You can also "sell down" or look into things like reverse mortgages, but the former can take time and has costs while the latter usually seems to have a lot of fine print you should read up on.

* Part-time work. I know a number of people who took part-time jobs when they retired. If you can find something that doesn't take a huge amount of time that you'd enjoy doing and that people will pay you for, fantastic! Do that. And it gets you out of the house and keeping active. For friends who are geeks and in my age cohort, I note that it will be 2037 around the time we hit 65. If you know why that matters, ka-ching!'

Another particularly useful page about the state pension: "Six things every woman needs to know about the State pension", Irish Times, Dec 1 2015, https://www.irishtimes.com/business/personal-finance/six-things-every-woman-needs-to-know-about-the-state-pension-1.2448981 , which links to this page to get your state pension contribution record: http://www.welfare.ie/en/pages/secure/ RequestSIContributionRecord.aspx
pensions  money  life  via:klyda  stocks  savings  shares  property  ireland  old-age  retirement 
december 2015 by jm
Why Amazon Has No Profits (And Why It Works)
Amazon has perhaps 1% of the US retail market by value. Should it stop entering new categories and markets and instead take profit, and by extension leave those segments and markets for other companies? Or should it keep investing to sweep them into the platform? Jeff Bezos’s view is pretty clear: keep investing, because to take profit out of the business would be to waste the opportunity. He seems very happy to keep seizing new opportunities, creating new businesses, and using every last penny to do it.
amazon  business  strategy  capex  spending  stocks  investing  retail 
october 2014 by jm
Nanex: "The stock market is rigged" [by HFTs]
All this evidence points to one inescapable conclusion: the order cancellations and trade executions just before, and during the trader's order were not a coincidence. This is premeditated, programmed theft, plain and simple. Michael Lewis probably said it best when he told 60 Minutes that the stock market is rigged.


Nanex have had enough, basically. Mad stuff.
hft  stocks  finance  market  trading  nanex  60-minutes  michael-lewis  scams  sec  regulation  low-latency  exploits  hacks 
july 2014 by jm
Low-latency stock trading "jumps the gun" due to default NTP configuration settings
On June 3, 2013, trading in SPY exploded at 09:59:59.985, which is 15 milliseconds before the ISM's Manufacturing number released at 10:00:00. Activity in the eMini (traded in Chicago), exploded at 09:59:59.992, which is 8 milliseconds before the news release, but 7 milliseconds after SPY. Note how SPY and the eMini traded within a millisecond for the Consumer Confidence release last week, but the eMini lagged SPY by about 7 milliseconds for the ISM Manufacturing release. The simultaneous trading on Consumer Confidence is because that number is released at the same time in both NYC and Chicago.

The ISM Manufacturing number is probably released on a low latency feed in NYC, and then takes 5-7 milliseconds, due to the speed of light, to reach Chicago. Either the clock used to release the ISM number was 15 milliseconds fast, or someone (correctly) jumped the gun.

Update: [...] The clock used to release the ISM was indeed, 15 milliseconds fast. This could be from using the default setting of many NTP clients, which allows the clock to drift up to about 16 milliseconds before adjusting time.
ntp  time  synchronization  spy  trading  stocks  low-latency  clocks  internet 
june 2013 by jm
High-frequency trading: The fast and the furious | The Economist

"The NYMEX panel found that Infinium had finished writing the algorithm only the day before it introduced it to the market, and had tested it for only a couple of hours in a simulated trading environment to see how it would perform. The firm's normal testing processes take six to eight weeks. When the algorithm started its frenetic buying spree, the measures designed to shut it down automatically did not work. One was supposed to turn the system off if a maximum order size was breached, but because the machine was placing lots of small orders rather than a single big one the shutdown was not triggered. The other measure was meant to prevent Infinium from selling or buying more than a certain number of contracts, but because of an error in the way the rogue algorithm had been written, this, too, failed to spot a problem."
hft  automation  trading  markets  stocks  nymex  bugs  software 
august 2012 by jm
N.Y. broker charged for boosting stock prices with spam - SC Magazine US
'As the [pump and dump] scheme played out from January 2005 through December 2007, Berger allegedly led the sale of about 30 million shares of stock, generating approximately $30 million for co-conspirators and more than $600,000 in commission for himself.'
pump-and-dump  stox  stocks  spam  prosecutions  law  cases  penny-stocks  via:spambully  from delicious
february 2011 by jm
Flash Crash - Norwegians Convicted for Outwitting 'Trading Robots' - CNBC
'The two men worked out how the computerized system would react to certain trading patterns – allowing them to influence the price of low-volume stocks.' Yet another risk of automated traders
trading  stocks  automated-trading  flash-crash  high-frequency-trading  from delicious
october 2010 by jm

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