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KineticEx Partnership announcement!
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Margin Equity Percentage on trading account at 57.90%
So I have an ETrade margin account and am trading on margin but i notice under purchasing power a line that says Margin Equity Percentage and it say is 57.90% a few day ago it was at 72%. Does anyone know what the represents?
The dollar standard and how the Fed itself created the perfect setup for a stock market crash
Disclaimer: This is neither financial nor trading advice and everyone should trade based on their own risk tolerance. Please leverage yourself accordingly. When you're done, ask yourself: "Am I jacked to the tits?". If the answer is "yes", you're good to go. We're probably experiencing the wildest markets in our lifetime. After doing some research and listening to opinions by several people, I wanted to share my own view on what happened in the market and what could happen in the future. There's no guarantee that the future plays out as I describe it or otherwise I'd become very rich. If you just want tickers and strikes...I don't know if this is going to help you. But anyways, scroll way down to the end. My current position is TLT 171c 8/21, opened on Friday 7/31 when TLT was at 170.50. This is a post trying to describe what it means that we've entered the "dollar standard" decades ago after leaving the gold standard. Furthermore I'll try to explain how the "dollar standard" is the biggest reason behind the 2008 and 2020 financial crisis, stock market crashes and how the Coronavirus pandemic was probably the best catalyst for the global dollar system to blow up.
Tackling the Dollar problem
Throughout the month of July we've seen the "death of the Dollar". At least that's what WSB thinks. It's easy to think that especially since it gets reiterated in most media outlets. I will take the contrarian view. This is a short-term "downturn" in the Dollar and very soon the Dollar will rise a lot against the Euro - supported by the Federal Reserve itself.US dollar Index (DXY)If you zoom out to the 3Y chart you'll see what everyone is being hysterical about. The dollar is dying! It was that low in 2018! This is the end! The Fed has done too much money printing! Zimbabwe and Weimar are coming to the US. There is more to it though. The DXY is dominated by two currency rates and the most important one by far is EURUSD.EURUSD makes up 57.6% of the DXY And we've seen EURUSD rise from 1.14 to 1.18 since July 21st, 2020. Why that date? On that date the European Commission (basically the "government" of the EU) announced that there was an agreement for the historical rescue package for the EU. That showed the markets that the EU seems to be strong and resilient, it seemed to be united (we're not really united, trust me as an European) and therefore there are more chances in the EU, the Euro and more chances taking risks in the EU.Meanwhile the US continued to struggle with the Coronavirus and some states like California went back to restricting public life. The US economy looked weaker and therefore the Euro rose a lot against the USD. From a technical point of view the DXY failed to break the 97.5 resistance in June three times - DXY bulls became exhausted and sellers gained control resulting in a pretty big selloff in the DXY.
Why the DXY is pretty useless
Considering that EURUSD is the dominant force in the DXY I have to say it's pretty useless as a measurement of the US dollar. Why? Well, the economy is a global economy. Global trade is not dominated by trade between the EU and the USA. There are a lot of big exporting nations besides Germany, many of them in Asia. We know about China, Japan, South Korea etc. Depending on the business sector there are a lot of big exporters in so-called "emerging markets". For example, Brazil and India are two of the biggest exporters of beef. Now, what does that mean? It means that we need to look at the US dollar from a broader perspective. Thankfully, the Fed itself provides a more accurate Dollar index. It's called the "Trade Weighted U.S. Dollar Index: Broad, Goods and Services". When you look at that index you will see that it didn't really collapse like the DXY. In fact, it still is as high as it was on March 10, 2020! You know, only two weeks before the stock market bottomed out. How can that be explained?
Global trade, emerging markets and global dollar shortage
Emerging markets are found in countries which have been shifting away from their traditional way of living towards being an industrial nation. Of course, Americans and most of the Europeans don't know how life was 300 years ago.China already completed that transition. Countries like Brazil and India are on its way. The MSCI Emerging Market Index lists 26 countries. Even South Korea is included. However there is a big problem for Emerging Markets: the Coronavirus and US Imports.The good thing about import and export data is that you can't fake it. Those numbers speak the truth. You can see that imports into the US haven't recovered to pre-Corona levels yet. It will be interesting to see the July data coming out on August 5th.Also you can look at exports from Emerging Market economies. Let's take South Korean exports YoY. You can see that South Korean exports are still heavily depressed compared to a year ago. Global trade hasn't really recovered.For July the data still has to be updated that's why you see a "0.0%" change right now.Less US imports mean less US dollars going into foreign countries including Emerging Markets.Those currency pairs are pretty unimpressed by the rising Euro. Let's look at a few examples. Use the 1Y chart to see what I mean. Indian Rupee to USDBrazilian Real to USDSouth Korean Won to USD What do you see if you look at the 1Y chart of those currency pairs? There's no recovery to pre-COVID levels. And this is pretty bad for the global financial system. Why? According to the Bank of International Settlements there is $12.6 trillion of dollar-denominated debt outside of the United States. Now the Coronavirus comes into play where economies around the world are struggling to go back to their previous levels while the currencies of Emerging Markets continue to be WEAK against the US dollar. This is very bad. We've already seen the IMF receiving requests for emergency loans from 80 countries on March 23th. What are we going to see? We know Argentina has defaulted on their debt more than once and make jokes about it. But what happens if we see 5 Argentinas? 10? 20? Even 80? Add to that that global travel is still depressed, especially for US citizens going anywhere. US citizens traveling to other countries is also a situation in which the precious US dollars would enter Emerging Market economies. But it's not happening right now and it won't happen unless we actually get a miracle treatment or the virus simply disappears. This is where the treasury market comes into play. But before that, let's quickly look at what QE (rising Fed balance sheet) does to the USD. Take a look at the Trade-Weighted US dollar Index. Look at it at max timeframe - you'll see what happened in 2008. The dollar went up (shocker).Now let's look at the Fed balance sheet at max timeframe. You will see: as soon as the Fed starts the QE engine, the USD goes UP, not down! September 2008 (Fed first buys MBS), March 2009, March 2020. Is it just a coincidence? No, as I'll explain below. They're correlated and probably even in causation.Oh and in all of those scenarios the stock market crashed...compared to February 2020, the Fed balance sheet grew by ONE TRILLION until March 25th, but the stock market had just finished crashing...can you please prove to me that QE makes stock prices go up? I think I've just proven the opposite correlation.
Bonds, bills, Gold and "inflation"
People laugh at bond bulls or at people buying bonds due to the dropping yields. "Haha you're stupid you're buying an asset which matures in 10 years and yields 5.3% STONKS go up way more!".Let me stop you right there. Why do you buy stocks? Will you hold those stocks until you die so that you regain your initial investment through dividends? No. You buy them because you expect them to go up based on fundamental analysis, news like earnings or other things. Then you sell them when you see your price target reached. The assets appreciated.Why do you buy options? You don't want to hold them until expiration unless they're -90% (what happens most of the time in WSB). You wait until the underlying asset does what you expect it does and then you sell the options to collect the premium. Again, the assets appreciated. It's the exact same thing with treasury securities. The people who've been buying bonds for the past years or even decades didn't want to wait until they mature. Those people want to sell the bonds as they appreciate. Bond prices have an inverse relationship with their yields which is logical when you think about it. Someone who desperately wants and needs the bonds for various reasons will accept to pay a higher price (supply and demand, ya know) and therefore accept a lower yield. By the way, both JP Morgan and Goldmans Sachs posted an unexpected profit this quarter, why? They made a killing trading bonds. US treasury securities are the most liquid asset in the world and they're also the safest asset you can hold. After all, if the US default on their debt you know that the world is doomed. So if US treasuries become worthless anything else has already become worthless. Now why is there so much demand for the safest and most liquid asset in the world? That demand isn't new but it's caused by the situation the global economy is in. Trade and travel are down and probably won't recover anytime soon, emerging markets are struggling both with the virus and their dollar-denominated debt and central banks around the world struggle to find solutions for the problems in the financial markets. How do we now that the markets aren't trusting central banks? Well, bonds tell us that and actually Gold tells us the same! TLT chartGold spot price chart TLT is an ETF which reflects the price of US treasuries with 20 or more years left until maturity. Basically the inverse of the 30 year treasury yield. As you can see from the 5Y chart bonds haven't been doing much from 2016 to mid-2019. Then the repo crisis of September 2019took place and TLT actually rallied in August 2019 before the repo crisis finally occurred!So the bond market signaled that something is wrong in the financial markets and that "something" manifested itself in the repo crisis. After the repo market crisis ended (the Fed didn't really do much to help it, before you ask), bonds again were quiet for three months and started rallying in January (!) while most of the world was sitting on their asses and downplaying the Coronavirus threat. But wait, how does Gold come into play? The Gold chart basically follows the same pattern as the TLT chart. Doing basically nothing from 2016 to mid-2019. From June until August Gold rose a staggering 200 dollars and then again stayed flat until December 2019. After that, Gold had another rally until March when it finally collapsed. Many people think rising Gold prices are a sign of inflation. But where is the inflation? We saw PCE price indices on Friday July 31st and they're at roughly 1%. We've seen CPIs from European countries and the EU itself. France and the EU (July 31st) as a whole had a very slight uptick in CPI while Germany (July 30th), Italy (July 31st) and Spain (July 30th) saw deflationary prints.There is no inflation, nowhere in the world. I'm sorry to burst that bubble. Yet, Gold prices still go up even when the Dollar rallies through the DXY (sadly I have to measure it that way now since the trade-weighted index isn't updated daily) and we know that there is no inflation from a monetary perspective. In fact, Fed chairman JPow, apparently the final boss for all bears, said on Wednesday July 29th that the Coronavirus pandemic is a deflationarydisinflationary event. Someone correct me there, thank you. But deflationary forces are still in place even if JPow wouldn't admit it. To conclude this rather long section: Both bonds and Gold are indicators for an upcoming financial crisis. Bond prices should fall and yields should go up to signal an economic recovery. But the opposite is happening. in that regard heavily rising Gold prices are a very bad signal for the future. Both bonds and Gold are screaming: "The central banks haven't solved the problems". By the way, Gold is also a very liquid asset if you want quick cash, that's why we saw it sell off in March because people needed dollars thanks to repo problems and margin calls.When the deflationary shock happens and another liquidity event occurs there will be another big price drop in precious metals and that's the dip which you could use to load up on metals by the way.
Dismantling the money printer
But the Fed! The M2 money stock is SHOOTING THROUGH THE ROOF! The printers are real!By the way, velocity of M2 was updated on July 30th and saw another sharp decline. If you take a closer look at the M2 stock you see three parts absolutely skyrocketing: savings, demand deposits and institutional money funds. Inflationary? No. So, the printers aren't real. I'm sorry.Quantitative easing (QE) is the biggest part of the Fed's operations to help the economy get back on its feet. What is QE?Upon doing QE the Fed "purchases" treasury and mortgage-backed securities from the commercial banks. The Fed forces the commercial banks to hand over those securities and in return the commercial banks reserve additional bank reserves at an account in the Federal Reserve. This may sound very confusing to everyone so let's make it simple by an analogy.I want to borrow a camera from you, I need it for my road trip. You agree but only if I give you some kind of security - for example 100 bucks as collateral.You keep the 100 bucks safe in your house and wait for me to return safely. You just wait and wait. You can't do anything else in this situation. Maybe my road trip takes a year. Maybe I come back earlier. But as long as I have your camera, the 100 bucks need to stay with you. In this analogy, I am the Fed. You = commercial banks. Camera = treasuries/MBS. 100 bucks = additional bank reserves held at the Fed.
Revisiting 2008 briefly: the true money printers
The true money printers are the commercial banks, not the central banks. The commercial banks give out loans and demand interest payments. Through those interest payments they create money out of thin air! At the end they'll have more money than before giving out the loan. That additional money can be used to give out more loans, buy more treasury/MBS Securities or gain more money through investing and trading. Before the global financial crisis commercial banks were really loose with their policy. You know, the whole "Big Short" story, housing bubble, NINJA loans and so on. The reckless handling of money by the commercial banks led to actual money printing and inflation, until the music suddenly stopped. Bear Stearns went tits up. Lehman went tits up. The banks learned from those years and completely changed, forever. They became very strict with their lending resulting in the Fed and the ECB not being able to raise their rates. By keeping the Fed funds rate low the Federal Reserve wants to encourage commercial banks to give out loans to stimulate the economy. But commercial banks are not playing along. They even accept negative rates in Europe rather than taking risks in the actual economy. The GFC of 2008 completely changed the financial landscape and the central banks have struggled to understand that. The system wasn't working anymore because the main players (the commercial banks) stopped playing with each other. That's also the reason why we see repeated problems in the repo market.
How QE actually decreases liquidity before it's effective
The funny thing about QE is that it achieves the complete opposite of what it's supposed to achieve before actually leading to an economic recovery. What does that mean? Let's go back to my analogy with the camera. Before I take away your camera, you can do several things with it. If you need cash, you can sell it or go to a pawn shop. You can even lend your camera to someone for a daily fee and collect money through that.But then I come along and just take away your camera for a road trip for 100 bucks in collateral. What can you do with those 100 bucks? Basically nothing. You can't buy something else with those. You can't lend the money to someone else. It's basically dead capital. You can just look at it and wait until I come back. And this is what is happening with QE. Commercial banks buy treasuries and MBS due to many reasons, of course they're legally obliged to hold some treasuries, but they also need them to make business.When a commercial bank has a treasury security, they can do the following things with it:- Sell it to get cash- Give out loans against the treasury security- Lend the security to a short seller who wants to short bonds Now the commercial banks received a cash reserve account at the Fed in exchange for their treasury security. What can they do with that?- Give out loans against the reserve account That's it. The bank had to give away a very liquid and flexible asset and received an illiquid asset for it. Well done, Fed. The goal of the Fed is to encourage lending and borrowing through suppressing yields via QE. But it's not happening and we can see that in the H.8 data (assets and liabilities of the commercial banks).There is no recovery to be seen in the credit sector while the commercial banks continue to collect treasury securities and MBS. On one hand, they need to sell a portion of them to the Fed on the other hand they profit off those securities by trading them - remember JPM's earnings. So we see that while the Fed is actually decreasing liquidity in the markets by collecting all the treasuries it has collected in the past, interest rates are still too high. People are scared, and commercial banks don't want to give out loans. This means that as the economic recovery is stalling (another whopping 1.4M jobless claims on Thursday July 30th) the Fed needs to suppress interest rates even more. That means: more QE. that means: the liquidity dries up even more, thanks to the Fed. We heard JPow saying on Wednesday that the Fed will keep their minimum of 120 billion QE per month, but, and this is important, they can increase that amount anytime they see an emergency.And that's exactly what he will do. He will ramp up the QE machine again, removing more bond supply from the market and therefore decreasing the liquidity in financial markets even more. That's his Hail Mary play to force Americans back to taking on debt again.All of that while the government is taking on record debt due to "stimulus" (which is apparently only going to Apple, Amazon and Robinhood). Who pays for the government debt? The taxpayers. The wealthy people. The people who create jobs and opportunities. But in the future they have to pay more taxes to pay down the government debt (or at least pay for the interest). This means that they can't create opportunities right now due to the government going insane with their debt - and of course, there's still the Coronavirus.
"Without the Fed, yields would skyrocket"
This is wrong. The Fed has been keeping their basic level QE of 120 billion per month for months now. But ignoring the fake breakout in the beginning of June (thanks to reopening hopes), yields have been on a steady decline. Let's take a look at the Fed's balance sheet. The Fed has thankfully stayed away from purchasing more treasury bills (short term treasury securities). Bills are important for the repo market as collateral. They're the best collateral you can have and the Fed has already done enough damage by buying those treasury bills in March, destroying even more liquidity than usual. More interesting is the point "notes and bonds, nominal". The Fed added 13.691 billion worth of US treasury notes and bonds to their balance sheet. Luckily for us, the US Department of Treasury releases the results of treasury auctions when they occur. On July 28th there was an auction for the 7 year treasury note. You can find the results under "Note -> Term: 7-year -> Auction Date 07/28/2020 -> Competitive Results PDF". Or here's a link. What do we see? Indirect bidders, which are foreigners by the way, took 28 billion out of the total 44 billion. That's roughly 64% of the entire auction. Primary dealers are the ones which sell the securities to the commercial banks. Direct bidders are domestic buyers of treasuries. The conclusion is: There's insane demand for US treasury notes and bonds by foreigners. Those US treasuries are basically equivalent to US dollars. Now dollar bears should ask themselves this question: If the dollar is close to a collapse and the world wants to get rid fo the US dollar, why do foreigners (i.e. foreign central banks) continue to take 60-70% of every bond auction? They do it because they desperately need dollars and hope to drive prices up, supported by the Federal Reserve itself, in an attempt to have the dollar reserves when the next liquidity event occurs. So foreigners are buying way more treasuries than the Fed does. Final conclusion: the bond market has adjusted to the Fed being a player long time ago. It isn't the first time the Fed has messed around in the bond market.
How market participants are positioned
We know that commercial banks made good money trading bonds and stocks in the past quarter. Besides big tech the stock market is being stagnant, plain and simple. All the stimulus, stimulus#2, vaccinetalksgoingwell.exe, public appearances by Trump, Powell and their friends, the "money printing" (which isn't money printing) by the Fed couldn't push SPY back to ATH which is 339.08 btw. Who can we look at? Several people but let's take Bill Ackman. The one who made a killing with Credit Default Swaps in March and then went LONG (he said it live on TV). Well, there's an update about him:Bill Ackman saying he's effectively 100% longHe says that around the 2 minute mark. Of course, we shouldn't just believe what he says. After all he is a hedge fund manager and wants to make money. But we have to assume that he's long at a significant percentage - it doesn't even make sense to get rid of positions like Hilton when they haven't even recovered yet. Then again, there are sources to get a peek into the positions of hedge funds, let's take Hedgopia.We see: Hedge funds are starting to go long on the 10 year bond. They are very short the 30 year bond. They are very long the Euro, very short on VIX futures and short on the Dollar.
This is the perfect setup for a market meltdown. If hedge funds are really positioned like Ackman and Hedgopia describes, the situation could unwind after a liquidity event:The Fed increases QE to bring down the 30 year yield because the economy isn't recovering yet. We've already seen the correlation of QE and USD and QE and bond prices.That causes a giant short squeeze of hedge funds who are very short the 30 year bond. They need to cover their short positions. But Ackman said they're basically 100% long the stock market and nothing else. So what do they do? They need to sell stocks. Quickly. And what happens when there is a rapid sell-off in stocks? People start to hedge via put options. The VIX rises. But wait, hedge funds are short VIX futures, long Euro and short DXY. To cover their short positions on VIX futures, they need to go long there. VIX continues to go up and the prices of options go suborbital (as far as I can see).Also they need to get rid of Euro futures and cover their short DXY positions. That causes the USD to go up even more. And the Fed will sit there and do their things again: more QE, infinity QE^2, dollar swap lines, repo operations, TARP and whatever. The Fed will be helpless against the forces of the market and have to watch the stock market burn down and they won't even realize that they created the circumstances for it to happen - by their programs to "help the economy" and their talking on TV. Do you remember JPow on 60minutes talking about how they flooded the world with dollars and print it digitally? He wanted us poor people to believe that the Fed is causing hyperinflation and we should take on debt and invest into the stock market. After all, the Fed has it covered. But the Fed hasn't got it covered. And Powell knows it. That's why he's being a bear in the FOMC statements. He knows what's going on. But he can't do anything about it except what's apparently proven to be correct - QE, QE and more QE.
A final note about "stock market is not the economy"
It's true. The stock market doesn't reflect the current state of the economy. The current economy is in complete shambles. But a wise man told me that the stock market is the reflection of the first and second derivatives of the economy. That means: velocity and acceleration of the economy. In retrospect this makes sense. The economy was basically halted all around the world in March. Of course it's easy to have an insane acceleration of the economy when the economy is at 0 and the stock market reflected that. The peak of that accelerating economy ("max velocity" if you want to look at it like that) was in the beginning of June. All countries were reopening, vaccine hopes, JPow injecting confidence into the markets. Since then, SPY is stagnant, IWM/RUT, which is probably the most accurate reflection of the actual economy, has slightly gone down and people have bid up tech stocks in absolute panic mode. Even JPow admitted it. The economic recovery has slowed down and if we look at economic data, the recovery has already stopped completely. The economy is rolling over as we can see in the continued high initial unemployment claims. Another fact to factor into the stock market.
TLDR and positions or ban?
TLDR: global economy bad and dollar shortage. economy not recovering, JPow back to doing QE Infinity. QE Infinity will cause the final squeeze in both the bond and stock market and will force the unwinding of the whole system. Positions: idk. I'll throw in TLT 190c 12/18, SPY 220p 12/18, UUP 26c 12/18.That UUP call had 12.5k volume on Friday 7/31 btw.
Edit about positions and hedge funds
My current positions. You can laugh at my ZEN calls I completely failed with those.I personally will be entering one of the positions mentioned in the end - or similar ones. My personal opinion is that the SPY puts are the weakest try because you have to pay a lot of premium. Also I forgot talking about why hedge funds are shorting the 30 year bond. Someone asked me in the comments and here's my reply: "If you look at treasury yields and stock prices they're pretty much positively correlated. Yields go up, then stocks go up. Yields go down (like in March), then stocks go down. What hedge funds are doing is extremely risky but then again, "hedge funds" is just a name and the hedgies are known for doing extremely risky stuff. They're shorting the 30 year bond because they needs 30y yields to go UP to validate their long positions in the equity market. 30y yields going up means that people are welcoming risk again, taking on debt, spending in the economy. Milton Friedman labeled this the "interest rate fallacy". People usually think that low interest rates mean "easy money" but it's the opposite. Low interest rates mean that money is really tight and hard to get. Rising interest rates on the other hand signal an economic recovery, an increase in economic activity. So hedge funds try to fight the Fed - the Fed is buying the 30 year bonds! - to try to validate their stock market positions. They also short VIX futures to do the same thing. Equity bulls don't want to see VIX higher than 15. They're also short the dollar because it would also validate their position: if the economic recovery happens and the global US dollar cycle gets restored then it will be easy to get dollars and the USD will continue to go down. Then again, they're also fighting against the Fed in this situation because QE and the USD are correlated in my opinion. Another Redditor told me that people who shorted Japanese government bonds completely blew up because the Japanese central bank bought the bonds and the "widow maker trade" was born:https://www.investopedia.com/terms/w/widow-maker.asp"
Since I've mentioned him a lot in the comments, I recommend you check out Steven van Metre's YouTube channel. Especially the bottom passages of my post are based on the knowledge I received from watching his videos. Even if didn't agree with him on the fundamental issues (there are some things like Gold which I view differently than him) I took it as an inspiration to dig deeper. I think he's a great person and even if you're bullish on stocks you can learn something from Steven!
Hi guys, I have been using reddit for years in my personal life (not trading!) and wanted to give something back in an area where i am an expert. I worked at an investment bank for seven years and joined them as a graduate FX trader so have lots of professional experience, by which i mean I was trained and paid by a big institution to trade on their behalf. This is very different to being a full-time home trader, although that is not to discredit those guys, who can accumulate a good amount of experience/wisdom through self learning. When I get time I'm going to write a mid-length posts on each topic for you guys along the lines of how i was trained. I guess there would be 15-20 topics in total so about 50-60 posts. Feel free to comment or ask questions. The first topic is Risk Management and we'll cover it in three parts Part I
Why it matters
Using stops sensibly
Picking a clear level
Why it matters
The first rule of making money through trading is to ensure you do not lose money. Look at any serious hedge fund’s website and they’ll talk about their first priority being “preservation of investor capital.” You have to keep it before you grow it. Strangely, if you look at retail trading websites, for every one article on risk management there are probably fifty on trade selection. This is completely the wrong way around. The great news is that this stuff is pretty simple and process-driven. Anyone can learn and follow best practices. Seriously, avoiding mistakes is one of the most important things: there's not some holy grail system for finding winning trades, rather a routine and fairly boring set of processes that ensure that you are profitable, despite having plenty of losing trades alongside the winners.
Capital and position sizing
The first thing you have to know is how much capital you are working with. Let’s say you have $100,000 deposited. This is your maximum trading capital. Your trading capital is not the leveraged amount. It is the amount of money you have deposited and can withdraw or lose. Position sizing is what ensures that a losing streak does not take you out of the market. A rule of thumb is that one should risk no more than 2% of one’s account balance on an individual trade and no more than 8% of one’s account balance on a specific theme. We’ll look at why that’s a rule of thumb later. For now let’s just accept those numbers and look at examples. So we have $100,000 in our account. And we wish to buy EURUSD. We should therefore not be risking more than 2% which $2,000. We look at a technical chart and decide to leave a stop below the monthly low, which is 55 pips below market. We’ll come back to this in a bit. So what should our position size be? We go to the calculator page, select Position Size and enter our details. There are many such calculators online - just google "Pip calculator". https://preview.redd.it/y38zb666e5h51.jpg?width=1200&format=pjpg&auto=webp&s=26e4fe569dc5c1f43ce4c746230c49b138691d14 So the appropriate size is a buy position of 363,636 EURUSD. If it reaches our stop level we know we’ll lose precisely $2,000 or 2% of our capital. You should be using this calculator (or something similar) on every single trade so that you know your risk. Now imagine that we have similar bets on EURJPY and EURGBP, which have also broken above moving averages. Clearly this EUR-momentum is a theme. If it works all three bets are likely to pay off. But if it goes wrong we are likely to lose on all three at once. We are going to look at this concept of correlation in more detail later. The total amount of risk in our portfolio - if all of the trades on this EUR-momentum theme were to hit their stops - should not exceed $8,000 or 8% of total capital. This allows us to go big on themes we like without going bust when the theme does not work. As we’ll see later, many traders only win on 40-60% of trades. So you have to accept losing trades will be common and ensure you size trades so they cannot ruin you. Similarly, like poker players, we should risk more on trades we feel confident about and less on trades that seem less compelling. However, this should always be subject to overall position sizing constraints. For example before you put on each trade you might rate the strength of your conviction in the trade and allocate a position size accordingly: https://preview.redd.it/q2ea6rgae5h51.png?width=1200&format=png&auto=webp&s=4332cb8d0bbbc3d8db972c1f28e8189105393e5b To keep yourself disciplined you should try to ensure that no more than one in twenty trades are graded exceptional and allocated 5% of account balance risk. It really should be a rare moment when all the stars align for you. Notice that the nice thing about dealing in percentages is that it scales. Say you start out with $100,000 but end the year up 50% at $150,000. Now a 1% bet will risk $1,500 rather than $1,000. That makes sense as your capital has grown. It is extremely common for retail accounts to blow-up by making only 4-5 losing trades because they are leveraged at 50:1 and have taken on far too large a position, relative to their account balance. Consider that GBPUSD tends to move 1% each day. If you have an account balance of $10k then it would be crazy to take a position of $500k (50:1 leveraged). A 1% move on $500k is $5k. Two perfectly regular down days in a row — or a single day’s move of 2% — and you will receive a margin call from the broker, have the account closed out, and have lost all your money. Do not let this happen to you. Use position sizing discipline to protect yourself.
If you’re wondering - why “about 2%” per trade? - that’s a fair question. Why not 0.5% or 10% or any other number? The Kelly Criterion is a formula that was adapted for use in casinos. If you know the odds of winning and the expected pay-off, it tells you how much you should bet in each round. This is harder than it sounds. Let’s say you could bet on a weighted coin flip, where it lands on heads 60% of the time and tails 40% of the time. The payout is $2 per $1 bet. Well, absolutely you should bet. The odds are in your favour. But if you have, say, $100 it is less obvious how much you should bet to avoid ruin. Say you bet $50, the odds that it could land on tails twice in a row are 16%. You could easily be out after the first two flips. Equally, betting $1 is not going to maximise your advantage. The odds are 60/40 in your favour so only betting $1 is likely too conservative. The Kelly Criterion is a formula that produces the long-run optimal bet size, given the odds. Applying the formula to forex trading looks like this: Position size % = Winning trade % - ( (1- Winning trade %) / Risk-reward ratio If you have recorded hundreds of trades in your journal - see next chapter - you can calculate what this outputs for you specifically. If you don't have hundreds of trades then let’s assume some realistic defaults of Winning trade % being 30% and Risk-reward ratio being 3. The 3 implies your TP is 3x the distance of your stop from entry e.g. 300 pips take profit and 100 pips stop loss. So that’s 0.3 - (1 - 0.3) / 3 = 6.6%. Hold on a second. 6.6% of your account probably feels like a LOT to risk per trade.This is the main observation people have on Kelly: whilst it may optimise the long-run results it doesn’t take into account the pain of drawdowns. It is better thought of as the rational maximum limit. You needn’t go right up to the limit! With a 30% winning trade ratio, the odds of you losing on four trades in a row is nearly one in four. That would result in a drawdown of nearly a quarter of your starting account balance. Could you really stomach that and put on the fifth trade, cool as ice? Most of us could not. Accordingly people tend to reduce the bet size. For example, let’s say you know you would feel emotionally affected by losing 25% of your account. Well, the simplest way is to divide the Kelly output by four. You have effectively hidden 75% of your account balance from Kelly and it is now optimised to avoid a total wipeout of just the 25% it can see. This gives 6.6% / 4 = 1.65%. Of course different trading approaches and different risk appetites will provide different optimal bet sizes but as a rule of thumb something between 1-2% is appropriate for the style and risk appetite of most retail traders. Incidentally be very wary of systems or traders who claim high winning trade % like 80%. Invariably these don’t pass a basic sense-check:
How many live trades have you done? Often they’ll have done only a handful of real trades and the rest are simulated backtests, which are overfitted. The model will soon die.
What is your risk-reward ratio on each trade? If you have a take profit $3 away and a stop loss $100 away, of course most trades will be winners. You will not be making money, however! In general most traders should trade smaller position sizes and less frequently than they do. If you are going to bias one way or the other, far better to start off too small.
How to use stop losses sensibly
Stop losses have a bad reputation amongst the retail community but are absolutely essential to risk management. No serious discretionary trader can operate without them. A stop loss is a resting order, left with the broker, to automatically close your position if it reaches a certain price. For a recap on the various order types visit this chapter. The valid concern with stop losses is that disreputable brokers look for a concentration of stops and then, when the market is close, whipsaw the price through the stop levels so that the clients ‘stop out’ and sell to the broker at a low rate before the market naturally comes back higher. This is referred to as ‘stop hunting’. This would be extremely immoral behaviour and the way to guard against it is to use a highly reputable top-tier broker in a well regulated region such as the UK. Why are stop losses so important? Well, there is no other way to manage risk with certainty. You should always have a pre-determined stop loss before you put on a trade. Not having one is a recipe for disaster: you will find yourself emotionally attached to the trade as it goes against you and it will be extremely hard to cut the loss. This is a well known behavioural bias that we’ll explore in a later chapter. Learning to take a loss and move on rationally is a key lesson for new traders. A common mistake is to think of the market as a personal nemesis. The market, of course, is totally impersonal; it doesn’t care whether you make money or not. Bruce Kovner, founder of the hedge fund Caxton Associates There is an old saying amongst bank traders which is “losers average losers”. It is tempting, having bought EURUSD and seeing it go lower, to buy more. Your average price will improve if you keep buying as it goes lower. If it was cheap before it must be a bargain now, right? Wrong. Where does that end? Always have a pre-determined cut-off point which limits your risk. A level where you know the reason for the trade was proved ‘wrong’ ... and stick to it strictly. If you trade using discretion, use stops.
Picking a clear level
Where you leave your stop loss is key. Typically traders will leave them at big technical levels such as recent highs or lows. For example if EURUSD is trading at 1.1250 and the recent month’s low is 1.1205 then leaving it just below at 1.1200 seems sensible. If you were going long, just below the double bottom support zone seems like a sensible area to leave a stop You want to give it a bit of breathing room as we know support zones often get challenged before the price rallies. This is because lots of traders identify the same zones. You won’t be the only one selling around 1.1200. The “weak hands” who leave their sell stop order at exactly the level are likely to get taken out as the market tests the support. Those who leave it ten or fifteen pips below the level have more breathing room and will survive a quick test of the level before a resumed run-up. Your timeframe and trading style clearly play a part. Here’s a candlestick chart (one candle is one day) for GBPUSD. https://preview.redd.it/moyngdy4f5h51.png?width=1200&format=png&auto=webp&s=91af88da00dd3a09e202880d8029b0ddf04fb802 If you are putting on a trend-following trade you expect to hold for weeks then you need to have a stop loss that can withstand the daily noise. Look at the downtrend on the chart. There were plenty of days in which the price rallied 60 pips or more during the wider downtrend. So having a really tight stop of, say, 25 pips that gets chopped up in noisy short-term moves is not going to work for this kind of trade. You need to use a wider stop and take a smaller position size, determined by the stop level. There are several tools you can use to help you estimate what is a safe distance and we’ll look at those in the next section. There are of course exceptions. For example, if you are doing range-break style trading you might have a really tight stop, set just below the previous range high. https://preview.redd.it/ygy0tko7f5h51.png?width=1200&format=png&auto=webp&s=34af49da61c911befdc0db26af66f6c313556c81 Clearly then where you set stops will depend on your trading style as well as your holding horizons and the volatility of each instrument. Here are some guidelines that can help:
Use technical analysis to pick important levels (support, resistance, previous high/lows, moving averages etc.) as these provide clear exit and entry points on a trade.
Ensure that the stop gives your trade enough room to breathe and reflects your timeframe and typical volatility of each pair. See next section.
Always pick your stop level first. Then use a calculator to determine the appropriate lot size for the position, based on the % of your account balance you wish to risk on the trade.
So far we have talked about price-based stops. There is another sort which is more of a fundamental stop, used alongside - not instead of - price stops. If either breaks you’re out. For example if you stop understanding why a product is going up or down and your fundamental thesis has been confirmed wrong, get out. For example, if you are long because you think the central bank is turning hawkish and AUDUSD is going to play catch up with rates … then you hear dovish noises from the central bank and the bond yields retrace lower and back in line with the currency - close your AUDUSD position. You already know your thesis was wrong. No need to give away more money to the market.
Coming up in part II
EDIT: part II here Letting stops breathe When to change a stop Entering and exiting winning positions Risk:reward ratios Risk-adjusted returns
Coming up in part III
Squeezes and other risks Market positioning Bet correlation Crap trades, timeouts and monthly limits *** Disclaimer:This content is not investment advice and you should not place any reliance on it. The views expressed are the author's own and should not be attributed to any other person, including their employer.
A guide for those looking to invest in Renewable Energy. (My Renewable portfolio with DD)
I've dedicated a large percentage of my portfolio to renewable energy companies and have obtained some knowledge on the sector and specific companies in doing so. I've noticed a trend of people inquiring about these companies so I hope that this post can provide some information. I'll provide a brief bullish thesis and some information about my investments in renewables. These are in order of weight in my portfolio. Tesla (TSLA) (511% gain) Most of us know what Tesla is about. They are the global leader in electric vehicles and will eventually come out with autonomous driving but I'll focus on their energy business. They sell solar panels with the lowest cost/watt of U.S. manufacturers, but this isn't the exciting part of their energy business. They are a leader in battery storage, which is an integral part of a renewable future. Energy storage systems store energy produced from solar panels and when the sun isn't shining, energy is consumed from the batteries instead. Also their autobidder software, which is out in trial in Massachusetts and Australia I believe, eventually will turn energy into a market place for Tesla customers. Read more about autobidder here: https://www.tesla.com/support/autobidder My bull case for Tesla (specifically the energy side of the business) is that they will continue to innovate with their low cost panels, and be a leader in battery storage, plus leverage their autobidder software to bring added value to residential customers. Vestas Wind Systems (VWDRY) (91.4% gain) https://www.vestas.com/~/media/vestas/investoinvestor%20pdf/financial%20reports/2020/q2/2020%20q2_pres.pdf Vestas is the leading manufacturer and installer of wind turbines. They have a global footprint and are expected to grow in line with the growth of the wind industry as a whole. A major growth engine in their business is going to be their expanding service and maintenance business, which has very high margins. My bull case for Vestas is that they are a unique pure play wind turbine company with years of experience in the growing industry. First Solar (FSLR). (24% gain) First Solar is an American based solar module manufacturing and solar project operating company. Most of their business comes from corporate and grid level solar projects. Notably, they have Next Era Energy, Microsoft and Apple as customers. The real bullish case behind First Solar is around their differentiated Cadmium Telluride solar modules. Compared to the standard Crystalline silicon technology, First Solar's modules last longer and produce energy at higher efficiencies in hotter climates. My bull case for First Solar is around their differentiated technology, strong balance sheet, and position as an American company, which typically warrants a higher P/E ratio than foreign companies. Jinko Solar (JKS) (22% gain) https://ir.jinkosolar.com/static-files/5a6d9266-d288-4ece-a0ea-f8e49ff60119 Jinko Solar is a leader is a Chinese based solar panel manufacturer. They produce low cost modules and also manage solar projects. Their business model is similar to First Solar's, however they trade at a cheaper valuation, due to being a Chinese company. You can read more about their technology on their investor relations page, but my main bull case for this company is around their position in South East Asia as a leading manufacturer, as this is undoubtably the biggest potential market for solar energy. Canadian Solar (CSIQ) (27.5% gain) http://investors.canadiansolar.com/events Canadian Solar is also a leader in the module manufacturing & project development business. They have a similar business model with Jinko and First Solar. Canadian Solar owns equity stakes in several of their solar projects, which gives them a source of recurring revenue. They also have a large footprint in American grid/commercial systems and are a market leader in North America. They trade at an absurdly low 5 P/E ratio despite significant growth expectations in the coming years. My bull case for CSIQ is around their ability to dominate the current market and potential to capitalize off of further market growth and consolidation towards the biggest solar companies. Also their current valuation is very intriguing. SolarEdge (SEDG) (126% gain) https://investors.solaredge.com/ SolarEdge is the global leader in the Inverter space, with a 60% U.S. market share. For those who don't know, Inverter's turn the D.C. electrical current from the sun into an A.C. current, which is used by households. The inverter business is also much higher margin than the module (panel) business, due to there being fewer players in the industry. They are also expanding into energy storage and electric vehicle manufacturing. My bull case around SolarEdge is around their market dominance in the Solar Inverter business, which will grow exponentially in the coming years plus future expansion in storage & EVs. They have a very strong management team as well. TPI composites (TPIC). (70.55% gain) https://ir.tpicomposites.com/download/companies/tpicomposites/Supplements/TPI%20Earnings%20Deck%202Q20.pdf TPI composites manufacturers wind blades and sells them to wind turbine companies. They have long term contracts with the top 5 non Chinese wind turbine companies (Vestas, GE, Siemens, Nordex & Enercon.) 63% of total wind blade manufacturing is outsourced to companies like TPI and they are the market leader in this space with about 20% market share globally. The business currently has low margins, but they target a 12% EBITDA margin for the future, and they trade at a measly 0.74 P/S ratio currently. They are also expanding into EV composite manufacturing and have a contract with a certain EV company that I can't mention on this subreddit apparently (DM if you want more info) to manufacture vehicle parts for them. Enphase Energy (ENPH) (46% gain) https://investor.enphase.com/static-files/81902e59-7d61-4693-aa86-8d54e63975b9 Enphase is the sole producer of Microinverters, which are smaller inverters that go on individual panels and provide a safer, more efficient, but more expensive solution than the standard string inverters. Microinverters are used in smaller solar systems, mostly residential. They also have an energy storage business that is just starting to scale. Enphase and SolarEdge are competitors in both of these spaces, and are expected to be major players in the future. Like SolarEdge, Enphases' inverter business is high margin and expects rapid future growth, as the residential solar market grows. My bullish case around Enphase is around their Microinverter technology, potential for expansion into storage and unique Ensamble home energy management system (read about Ensamble on the Investor relations page). Brookfield Renewables (BEPC). (12% gain) https://bep.brookfield.com/~/media/Files/B/Brookfield-BEP-IR-V2/events-and-presentations/bep-investor-brochure-q1-2020-vf.pdf Brookfield Renewables owns and operates renewable energy systems and projects. They sell energy produced from such systems to utility companies and have a recurring revenue stream. They also pay a 3.73% dividend yield. Their investments are split between Hydroelectric, solar and wind. My bullish thesis around BEPC is the consistent cash flow positive revenue stream and relative safety in the business model. Also, they provide me with exposure to hydroelectric energy. Let me know if you have any comments, hold, or plan to buy any of these companies! NOTE: I'm 19 years old and have a 5-10 year+ timeline for holding/buying into all of these companies PS: These are not all of my holdings, just the renewable energy portion of my portfolio. (which including Tesla makes up more than half, exluding Tesla about 1/4)
Did I make 30% gains or 10% gains. My friend says I lie about the numbers Robinhood gives me
Bear with me this can be a little confusing. So here are the details: I have put roughly $3,800 of my own money into Robinhood. Through gains in tech shares I increased my equity to 5k or as Robinhood says a 33% return. The issue is my friend doesn't use Robinhood & when I send him screen shots of my 33% return he says i'm manipulating the numbers since I made some of the gains on margin. He argues that since I have 5k in margin and 5k in equity my real return is only about 12.5% since my total portfolio value is about 11k. He says I should trust him since he's studying finance. I can't get him to listen to me when I say he's dead wrong. Who's wrong here? Can you guys help me out and tell me i'm right?
The NBA league office announced that all awards will be officially based on play PRIOR to the bubble. With that, the cases are locked, the campaigns are closed, and the voting will begin. While the media may focus on the MVP award and other prestigious honors, reddit has the distinct honor of awarding the LVP. The LEAST Valuable Player. It's a tradition that dates back to 2016-17, when aging Indiana SG Monta Ellis won the inaugural trophy and then promptly disappeared from the NBA forever. In 2017-18, Minnesota SG Jamal Crawford won the (dis)honor with some incredibly bad defensive numbers. Last season, New Orleans SF Solomon Hill won LVP by helping to sink a drowning team and accelerating Anthony Davis' decision to fly the coop. Before we announce this year's winner, let's review the criteria and caveats: --- Obviously, the worst players in the league are the ones who sit at the end of the bench and don't get any playing time. However, this award focuses on players who log a decent amount of minutes and consequently affected their team's play the most. Simply put: the more you play, the more damage you can do. --- And that actual "damage" is important. If you're on a tanking team, no one cares about your poor play; it may even be a positive. I'm also ignoring young players (under 21) who are still developing and can't be expected to be solid players yet. --- Similarly, we don't want to judge players within the context of their salary any more than the actual MVP does. We also do not weigh in injuries either. For example, the Wizards would have a hard time competing with John Wall on the sidelines (0 games played, $32M in salary), but we want to focus on players' on-court performance instead.
PG Mike Conley, Utah: 28.6 minutes per game, -0.80 RPM We're using Mike Conley to reiterate that the LVP does NOT factor salary into the equation any more than the MVP does. But if it did, Mike Conley and his $33M salary may be in trouble. It was a disastrous start to the season for Conley. Playing in a new role as a second fiddle to another guard, he could never find his groove. His assists plummeted (down to 4.3 per game), his free-throw attempts cut in half (from 5.8 to 2.9), and he only shot 42.9% from two-point range. That said, he still shot pretty well from 3 (37.6%) and played OK defense, keeping him off our official ballot. SF Miles Bridges, Charlotte: 30.7 minutes per game, -2.68 RPM Like Mike Conley, Miles Bridges seems like a great guy whom you'd hate to criticize. Alas, that's our exercise here. Caught in between positions, Bridges hasn't been able to figure out his rhythm on offense in the NBA either. He hasn't shot well (33% from three, 48.6% from two) and doesn't get to the line enough (2.0 FTA) to make up for it. The advanced stats get even worse from there (although to be fair, they get dragged down by playing in a bad starting lineup.) Fortunately for him, Bridges is spared by his youth. At 22, he's technically over our "21 year old" threshold, but it still feels unfair to pick on his growing pains as a sophomore. Perhaps in time, he can find a role that can take advantage of his athleticism and talent. But be warned: the clock is ticking. We're taking the kid gloves off soon. Bridges and fellow analytics-allergic Kevin Knox (-7.7 RPM!) will be entering Year 3 next season and will need to step their games up to avoid LVP discussion. SF Kyle Kuzma, L.A. Lakers: 24.6 minutes per game, -0.74 RPM Kyle Kuzma can score if need be, but his skill set never made him a natural fit to play third banana to superstars like LeBron James and Anthony Davis. He's not a 3+D player -- he's more of a no-3 (30% this year) no-D player. At the same time, the LVP is about negative impact, and it's hard to find much of consequence here. After all, the Lakers still finished with the # 1 record in the West. Kuzma struggling to find his way is like a tree falling in the woods or a person farting in an empty elevator – ultimately it didn't matter. SF Andre Iguodala, Memphis/Miami It feels like ancient history now, but this past offseason, the Memphis Grizzlies acquired Andre Iguodala in a trade (under the presumption he may be dealt again.) According to official reports, Iguodala and the Grizzlies MUTUALLY decided that he wouldn't play for Memphis and wouldn't even report to the team in the meantime. Okay. Fine. We'll go along with that. Still, that situation leaves a sour taste in the LVP headquarters. Memphis turned out to be better than expected, and could have used an extra rotational player. And even if Iguodala wouldn't have helped much on the court, he could have been a valuable mentor for their young kids. That's the least you can expect for a nice $15M in salary.
our official top 5 LVP ballot
(5) PF Anthony Tolliver (POR, SAC, MEM): 15.6 minutes per game, -3.60 RPM I've always had a soft spot for the wise ol' owl, Anthony Tolliver. He's reportedly a great teammate and locker room presence. He also started to develop into an effective stretch four towards the end of this career. But alas, the end of his career may have snuck up on us sooner than we expected. Tolliver disappointed for Minnesota last season, and completely flopped in his return to Portland. At age 34, he doesn't seem to be a viable rotation player anymore. He didn't play quite enough to merit LVP, but he still played more than he should have. There's a chance Tolliver comes back next year to serve as a veteran mentor and pseudo-assistant coach somewhere, but it's more likely that he retires. If he does, he'll have played for 10 different franchises in his not-so-illustrious but very respectable career. (4) SG Bryn Forbes, San Antonio: 25.1 minutes per game, -0.95 RPM The NBA is all about shooting these days, and Bryn Forbes can shoot. He's hit an even 40.0% from three during his NBA career so far, and wasn't too far removed from that this season with 38.8% on 6.0 attempts per game. As a result, his true shooting percentage (57%) was above average. The Spurs lacked spacers, and Forbes fit that bill. So what's the problem...? Turns out, basketball is more than a halfcourt game. And whenever the ball crosses that pesky midcourt line, Bryn Forbes starts to become a liability. At only 6'3", Forbes is undersized to play the SG position, which is where the Spurs played him 74% of the time (according to basketball-reference.) Partly due to those athletic limitations, he only registered 0.5 steals per game, and blocked a grand total of 0 shots in his 1579 minutes of action. The advanced stats get ugly; Forbes ranks near the bottom at his position in DRPM, DBPM, all the alphabet formulas that you can cook up. At the end of the day, LVP is about negative impact, and there's plenty here. Forbes is not a bad player in a vacuum, but he did not help the Spurs this year. In fact, their undersized lineup is a big reason why they're struggling so much on defense (25th in the NBA). As a direct result, they're on track to miss the playoffs for the first time in decades. (3) SF Mario Hezonja, Portland: 16.3 minutes per game, -2.79 RPM During the entire run of the Damian Lillard - C.J. McCollum era, Portland has struggled to figure out their wing rotation. That would be tested even more this season, with familiar faces like Moe Harkless, Al-Farouq Aminu, and Evan Turner slipping out the door. The trials and tribulations kept coming like Damian Lillard was Job, as injuries ravaged the Blazers' new depth chart. The team didn't need a star to emerge at forward -- but they needed somebody. Anybody. In theory, that player should have been Mario Hezonja, a former lottery pick and a live body with good athleticism and size at 6'8". Signed this summer for a modest price ($1.7M), Hezonja had the chance to jumpstart his NBA career with a major opportunity on the team. Instead, he flopped like Marcus Smart taking a phantom elbow. Hezonja's biggest problem is that, at age 25, he still hasn't found his feel on the court. He's not a good shooter (32.8% from three), and doesn't use his athleticism to find his way to the line (1.1 attempts per game.) He was a non-factor (5 PPG, 3 RPG) on a team that desperately needed him to step up. In fact, the Blazers were so desperate for help that they not only signed Carmelo Anthony, but they played him over 32 minutes a game. Again, we see a real "LVP" candidacy here with a direct effect on the standings. The Blazers' getting a big fat nothing from Hezonja was a major part of their struggle to get to .500 this season. (2) C Dewayne Dedmon, SAC/ATL: 17.6 minutes per game, -2.51 RPM We're not supposed to factor in salaries into this equation, but Dewayne Dedmon's situation merits a mention for context. The Sacramento Kings signed the big man to a head-scratching 3-year, $40M deal this summer (seriously.) Clearly, GM Vlade Divac thought his young Kings were only a few veterans away from making the playoffs, bringing in (and over-paying) Dedmon, Cory Joseph, and Trevor Ariza. Among the three, Dedmon turned out to be the most disappointing for several reasons. He didn't play well to start the season, and got usurped in the rotation by underrated Richaun Holmes. Rather than suck it up, take a deep breath, and take a relaxing dive in his new Scrooge McDuck money pool, Dedmon started to whine and complain and push for a trade. For a team that was struggling, Dedmon's headache became the last thing they needed. Ultimately, they ditched him back to where he came from in Atlanta. Now, being difficult and being a prima donna isn't enough to get you LVP honors. You have to stink on the court as well. And sure enough, Dedmon started to check those boxes. Billed as a stretch five after hitting some threes in Atlanta, Dedmon lost his shot in the SMF airport baggage claim. He shot only 19.7% from three for the Kings, registering a 47.3% true shooting percentage on the season. His defense is OK, but it's not good enough make up for his poor offensive play. He's not bad enough to get LVP, but he hurt his team this year. (1) PG Isaiah Thomas, Washington: 23.1 minutes per game, -2.75 RPM We've awarded three LVP trophies in the past, and a familiar pattern is starting to emerge. The most dangerous players aren't necessarily the bad players; they're the players who used to be good. Because of their prior success, they tend to get overplayed by their coaches and drag their teams down with them. It wasn't too long ago that Isaiah Thomas found himself in the MVP conversation for the Boston Celtics, as his incredible shotmaking helped make up for any defensive limitations he may have as a 5'9" player. That said, a small player like Thomas is always going to have a thin margin for error to remain a winning player. He needs to be GREAT offensively to make up for his defense. Unfortunately, his offense has not been great since his infamous injury. He can still make shots (hitting 41.3% of his threes), but he's not getting inside the paint and not getting to the free-throw line (1.9 attempts per game.) As a result, his true-shooting percentage lagged to 53.1%, well below league average. If Isaiah Thomas isn't making scoring efficiently, then what is he doing to help a team win? He's not a great distributor (3.7 assists per game.) He's a very poor rebounder (1.7 per game.) And yes, that defense is still a major problem. According to ESPN's RPM metric, Thomas graded as a -4.2 impact per 100 possessions, the second worst in the league at PG after Trae Young. Basketball-reference lists his "defensive rating" at 121. For comparison's sake, the worst team defense in the league still held teams under 116. (That worst team? The Wizards.) You can make an argument that there's still a place for Thomas in the NBA as a sparkplug scorer off the bench. Alas, that's not how the Wizards had been using him this season. He started 37 of 40 games for the team. Largely as a result of that, the Wizards' starting lineup was atrocious defensively. Fellow starters like Bradley Beal and Rui Hachimura ranked toward the bottom of their position in defensive metrics as well. When your lineup stinks defensively, a good coach may look in the mirror and say: hey, maybe we need a change here. Sadly, quick reactions are not Scottie Brooks' strong suit. He has the type of sloth-like speed that even frustrate workers at the DMV. The Wizards eventually dumped IT, but it took far too long to make that shift. To be fair, the Wizards' options at point guard were limited with John Wall injured. Veteran Ish Smith is mediocre right now, and Shabazz Napier arrived late in the season. Still, the point here is: almost any competent point guard (like a Napier) would have helped the Wizards more than Isaiah Thomas. He had become a negative for them. The cold hard truth is that: it's very difficult to win basketball games with Thomas starting. And given that, he is our official LVP.
What if I told you OPERATION 10 BAGS is actually OPERATION 20 BAGS - Courtesy of Albertsons (ACI)
Edit 1: I wouldn't rush to get in immediately with how poor SPY/QQQ look at open. Waiting until later in the day when they've maybe bottomed out is likely a better move Edit 2: Broader market looks to have stabilized. Congrats if you bought the dip. But now is time to get balls deep - I'm in the process of tripling my position u/trumpdiego 's post from a few days ago on ACI inspired me to do some research of my own, and it seems operation 10 bags may actually be a 20 bagger Post for reference:https://new.reddit.com/wallstreetbets/comments/huq9eq/operation\10_bags_brought_to_you_by_albertsons/) TL;DR: ACI is a leader in multiple sub-sectors that the market has been pumping lately. Their stock hasn’t increased as much as competitors in the last month, and it is cheaper than all of them on a P/E basis. Grocery prices have been rising faster than ever before. ACI is driving customers to their stores at a rate higher than anyone else in the industry. Online grocery sales were likely close to a record $19B in Q2. ACI’s online grocery sales were up +243% in April, and close to +220% this last quarter. Both of those last two facts suggest over $36B in quarterly revenue, compared to a street consensus of ~$23B. TL;DR for the TL;DR: Albertons Companies (ACI) 8/21 $20C’s are going to the moon when they report earnings before market open on Monday 7/27, but potentially sooner if any other online grocers report what you’re about to read below. And I'll show you exactly why referencing the data that the big bois use to evaluate investments. Primer for the type of autist who likes to know what he’s YOLOing options on: ACI is a food and drug retailer that offers grocery products, general merchandise, health and beauty care products, pharmacy, and fuel in the United States, with local presence and national scale. They also own Safeway, Tom Thumb , Acme, Shaw’s, Star Market, United Supermarkets, Vons, Jewel-Osco, Randalls, Market Street, Pavilions, Carrs, and Haggen as well as meal kit company Plated based in New York City. Additionally, ACI is the #1 or #2 grocer by market share in 68% of the 121 MSAs (Metropolitan Statistical Area) they operate in. And here’s the good part: ACI is a leader in the online grocery shopping/delivery marketplace. They offer home delivery services in ~65% of their 2,200 stores, and have partnerships with Instacart, Uber Eats, and Grubhub to facilitate 1-2 hour delivery in 90% of their locations. Guess whose stock is up 75% this quarter? Grubhub. Think the market likes food delivery? Besides online grocery shopping, what else is surging due to COVID-19? Meal kits. And guess what, ACI is one of the only grocers with a meal kit offering. Demand is surging so much that Blue Apron (APRN) decided to go public on June 24th, and is already up 22.47% since then. Think the market likes meal kits? Now back to your regularly scheduled programming: Before I get into the industry and ACI specific numbers that make me TSLA levels of bullish on ACI – let me tell you what the market thinks. Q: “Why do I care what the market thinks? I’m smarter than it!” – Probably most of you. A: “Because it doesn’t matter how right you are if the market doesn’t agree, especially when YOLOing short term options. Market Trends: Over the last 30 days, ACI shares are up a meager 3.43%, currently trading at a 7.3x P/E multiple of consensus 2020 earnings. Check out what the most comparable companies to ACI have done over the last 30 days, and associated 2020 expected earnings P/E they are trading at: Grocery Outlet (GO): +11.30% (39.7x) Kroger (KR): +9.16% (11.9x) Sprouts Farmers Market (SFM): +15.71% (15.1x) So what does that tell you? The market loves grocery stores right now in corona times (no shit), and ACI is relatively the cheapest stock out of all of them. The performance of Grubhub (+75% in Q2), Blue Apron (+22.47% since 6/24/20 IPO), and literally every single online retailer tell you the market’s opinion on online shopping, food delivery, and meal kits as well. If ACI were to trade at KR’s 11.9x P/E, that would make the stock worth $26.15, +63% from close today. Wonder what that means for option tendies… Oh what’s that? You’re asking why ACI could start trading on par with KR at a 11.9x P/E? Great question! Let me get into why this sexy boi will print: Starting from a macro perspective, CPI: Food at Home (NSA) is the consumer price metric that tracks inflation in food prices as grocery stores and related establishments. After deflating -.16% in 2018 and inflating just .03% in 2019, CPI: Food at Home (NSA) is +4.74% thus far in 2020. Why is this? Food prices are historically correlated with Disposable Personal Income, which also increased at its highest rate ever through Q2’2020. So as long as big daddy Powell has the money printer going brrrrrr, Albertsons will be making more and more money on each sale. Now, this food price inflation does benefit every grocer. However, let’s take a look at the ID Sales (which is the grocer equivalent of same-store-sales) trends recently for ACI and its main competitors that I was able to find data on:
So through at least April, ACI has been in a class of their own when it comes to generating repeated traffic at their locations. Courtesy of the fine people at Morgan Stanley, we also know ID Sales were +16% in June (so you can deduce they were in the +17% to +20% range in May), and still up “double-digit percentage” thus far in July. So far we’re established that ACI is selling their products for the most they ever have, and generating more traffic at identical stores than all their competitors. This data is affirmed by JP Morgan’s foot traffic index which shows ACI taking customer from Kroger. But wait – here’s the sexy part: Time to forecast ACI’s online sales this quarter using published industry data: According to new research released 7/6/20 by Brick Meets Click and Mercatus, U.S. online grocery sales hit a record $7.2 billion in June, up 9% over May. Let’s do some quick maths and deduce that online grocery sales were $6.61B in May. Now let’s be super conservative and say May was a 20% increase over April (realistically I would guess closer to +5-10%), and that gives us $5.51B in online grocery sales in April. This means we likely had ~$19B in online grocery sales in Q2. As ACI represented 1.60% of the online grocery marketplace in 2019, that would imply $304M in online revenue this past quarter. This is very conservative though, as even after assuming a 20% drop in April relative to May, we also assumed their market share stayed at 1.60%. Remember those nice people at JPM who’s foot traffic tracker told us that ACI was stealing customers from KR? Well they also estimate ACI’s 1.60% market share in online groceries to reach 2.50%-2.80% in 2025, with a CAGR (cumulative average growth rate) of ~9% in market share per year. That means their 1.60% market share is likely 1.744% now. Take 1.744% of $19B, and:
!!!!That means $331.36M of online sales!!!!
Remember this number Now that we have an estimate for ACI’s online sales based on the broader industry trends, lets come up with an estimate using only company data: On their last earnings call, management noted that online sales had grown 83% in 2018, 39% in 2019, +278% in the first 12-weeks of 2020, and +243% in April (Remember this number too!). Can you hear your Robinhood account balance going brrrrr? If not, the oven is about to get turned up faster Jerome can print a milli: Math time! · ACI did ~$265.4M in online sales in 2018. Source: https://www.digitalcommerce360.com/2019/11/04/albertsons-embraces-omnichannel-retail/#:~:text=Albertsons%20does%20not%20break%20out,%2461%20billion%20in%20total%20revenue. · That means they did ~370M in online sales in 2019. · ACI had $62.455B in 2019 revenue. · Which means 0.59% of their sales were online. · Working backwards off their Q2’19 revenue of $18.738B, we arrive at $111M in online revenue. · Let’s be conservative and assume some sequential decline from their April online sales growth (the second number you should have remembered) and put Q2 online sales at +220%.
!!!!That means $355M in online sales!!!!
Remember that first number I told you to keep in mind? $331.36M. Considering entirely different data sets were used to find each number, it may not be so crazy to think it could be a pretty accurate forecast of the online sales when they report earnings. But since you’re so smart I know you’re on the edge of your seat wondering what that would mean for their total revenue Let’s take the average of both forecasts, and use $343.18M as our forecast for online revenue. Given online sales were 0.59% of 2019 revenue, it would imply $58.166B in revenue this quarter, compared to the $22.78B street consensus estimate. Admittedly, online sales staying at .59% is unrealistic due to how many consumers would shop online instead of in the store. Here’s some more math to deduce the new percentage: · In 2018, 0.44% of their sales were online · When online sales rose 39% in 2019, the proportion went up to 0.59% · So a 39% increase in online sales led to a 0.15% greater contribution of online sales to total revenue · Therefore a 220% increase would mean a 0.345% increase in proportion of online sales, putting them at .935% of total sales
!!!!!That gives us $36.704B in revenue for this past quarter vs a consensus of just under $22.78B. A beat by over 60%!!!!!
If you’re one of the rare autists to realize that revenue is only one half of the earnings equation, and your costs are the equally as important second half: Let’s go back to our friends at JPM, in a recent research note, after mentioning the foot traffic ACI was taking from KR, they also noted that ACI has superior gross margins to KR, as their stores are strategically located further from aggressively low priced competitors such as Aldi and WalMart. Additionally, they praised ACI’s recent cost savings initiatives that have been underway for some time now, and believe they would lead to some of the best margins in the industry. So you’re telling me ACI is going to make way more money than anyone expects this quarter, while also having lower costs? That must mean call options are crazy expensive, right?? Wrong. The aforementioned option is trading at just $0.50. That means after earnings when the stock rips to $30, they could be worth $11, does a 2,100% return sound good to you too? And for you especially literate autists, the IV is only 91.61%.
ACI 8/21 $20C
Let’s ride this fucker to the moon
Happy to respond to any questions/comments on sources for some of the data I presented or anything else your autistic brain comes up with regarding ACI
[OC] Other "Coach of the Year" ballots may have more legitimacy or accuracy, but this is the only one that ranks the candidates from # 1 all the way to # 30
The NBA league office announced that all awards will be officially based on play PRIOR to the bubble. With that, the cases are locked, the campaigns are closed, and the voting will begin. Rather than give a traditional "Coach of the Year" ballot that ranks from 1-3, I thought it may be an interesting (and indulgent) exercise to go all the way from 1-30. Some caveats: --- We're ranking coaches based on their performance THIS SEASON only. Obviously, Billy Donovan isn't as good of a coach as Gregg Popovich. However, if you were only ranking their "Coach of the Year" candidacy for this particular season, Donovan has a better campaign argument. --- Since I don't watch every game for every team, I'm going to have to resort to a bigger picture analysis. If you're a diehard fan of your team who watches every game, you'd have a lot better insight into a coach's game management and situational adjustments. Let us know how you feel about that -- is your coach underrated? Overrated? --- Personally, I'm going to rank coaches that started the year (as opposed to interim replacements.) That’s important to mention off the bat, because it applies right away —
(30) David Fizdale, N.Y. Knicks: 4-18 record David Fizdale became a head coach with so much fanfare and media approval that his fall from grace has been more dramatic than Icarus. This year, he got fired 22 games into his second season on the job. Amazingly, this isn't the first time that's happened to him. Back in Memphis, he also got fired 19 games into his second season on the job. We don't know exactly what goes on behind the scenes, but it can't be good. Do you know how bad things must be going to get fired 20 games into a season? That's like being halfway through sex with someone and saying: ya know, I think I need to leave... Something seriously FUNKY must have going on in there. Raging herpes. Oozing puss. Rotten vagina. I don't want to call David Fizdale the rotten vagina of coaches, but his tenure with the Knicks did smell pretty funky. The team (right or wrong) signed a bunch of veterans with the intention to strive for the 8th seed, but they flopped. Ultimately, the real goal was giving their young prospects an environment to grow, but that didn't happen either. Dennis Smith and Kevin Knox are somehow getting worse and worse. The Knicks did a full house cleaning, but it may be some time before the smell is out of the building. (29) John Beilein, Cleveland: 14-40 record If you think it's difficult to get fired 20 games into a season, imagine getting fired halfway through your first year on the job right after you've signed a lucrative FIVE-YEAR contract. With John Beilein, we know more clearly what went wrong. In hindsight, it was a mistake to think that the 67-year-old Beilein could make the transition to the NBA after a lifetime in college. He simply didn't mesh with the "thugs/slugs" in the NBA, causing the Cavs to pull the plug before a full-out mutiny. Given this disaster, how can we rank Beilein higher than Fizdale? We're splitting hairs, but there are a few more positives. Beilein's Cavs had a better record than Fizdale's Knicks despite lower expectations (based on oveunder.) Beilein also "resigned," meaning the decision to part was at least somewhat mutual. He realized the error of his ways, and handed things over to an experienced assistant in J.B. Bickerstaff. As embarrassing and costly as the Beilein era may have been, it's hard to see much long-term damage for the franchise. (28) Scottie Brooks, Washington: 24-40 record With John Wall injured, the Washington Wizards would have a hard time competing for the playoffs. Still, Scottie Brooks didn't help matters. The team ranked dead last in defensive rating by a good margin, indicating some serious issues with the system and the effort level. Even Bradley Beal looked disengaged on that end, ranking as one of the worst defenders in the league. More than anything, Brooks' crime is a slow adjustment to that problem. Despite their defensive issues, he continued to start league LVP Isaiah Thomas for 37 games. Brooks seems like a likable guy, but his slow trigger has defined and tarnished his coaching career so far. (27) Jim Boylen, Chicago: 22-43 record Even his defenders would say Jim Boylen is about as cuddly as a cactus and charming as an eel. His players' support for him ranges behind tepid indifference and downright annoyance. Still, sometimes it takes a Grinch to get young players locked in on defense. To his credit, Boylen did improve the Bulls on that end. Their defensive rating leapt up from 25th to 14th this season. But at the end of the day, the overall results simply aren't here. Despite offensive-minded youngsters like Zach LaVine and Lauri Markkanen (marginalized this year), the Bulls ranked 27th in offensive rating. Largely as a result, they were on pace to win 27.7 games, well short of their 33.5 oveunder. Being "likable" and being "successful" don't go hand in hand, but NBA coaches need to check 1 of those 2 boxes to survive. So far, Boylen has gone 0 for 2. (26) Lloyd Pierce, Atlanta: 20-47 record The Atlanta Hawks hired Lloyd Pierce on the basis of his defensive reputation, but we've seen little evidence of that on the court so far. In his first year on the job, the Hawks ranked 27th in defensive rating. After a full year of training and development in his system, they climbed all the way up to... 28th. Through it all, franchise player Trae Young looks completely lost, grading as a worse defender than our LVP Isaiah Thomas. There's not much evidence that Pierce is a BAD coach, but there's not much evidence that he's going to be able to cure what ails them either. He'll probably get another season or two on the job from the patient franchise, but he needs to make some improvements eventually. Young is an albatross on defense, sure, but one little guard shouldn't be enough to sink you like this. (For evidence, consider Boston ranked 4th in defense during lil' Isaiah Thomas' near-MVP season.) (25) Kenny Atkinson, Brooklyn: 28-34 record Our third coach who got fired midseason actually ranks higher than others. On the court, it's hard to find much fault in Kenny Atkinson's performance. Despite having two max players on the shelf, he still had his Nets in the playoff race. They weren't any great shakes, but they were competitive. However, we have to acknowledge that the job of an NBA coach goes beyond offensive and defensive ratings. It's also about managing a locker room, and managing egos. The Nets had built a good culture before this, but that culture presumably got rocked by the arrival of their new stars. It's up to Atkinson to bridge that gap, and instead it swallowed him whole. (24) Ryan Saunders, Minnesota: 19-45 record The Minnesota Timberwolves will fall well short of their preseason expectations (35.5 oveunder), and will continue to waste Karl-Anthony Towns' historically good offensive talent. It's still unclear if young pup Ryan Saunders should have been handed this job at such a young age; he hasn't proven that he deserves it yet. If there's any consolation, it's that Saunders appears in lock step with executive Gersson Rosas in terms of preferred playing style. Rosas came over from Houston with a desire to create more of a Morey-Ball approach. Saunders is doing his part, cranking up the gas to keep the team 3rd in pace, 3rd in three-point attempts, 3rd in free-throw attempts. The results don't match up yet, but at least they're on the same page. For now. Time will tell whether a new ownership group will come in and rip up that playbook. (23) Gregg Popovich, San Antonio: 27-36 record I imagine this low ranking will be among the least popular picks on the board. After all, Gregg Popovich is a legend. Even at this age, he's still a top 10 coach overall. That said, legends aren't bullet proof or immune from criticism. Popovich needs to take some blame for an underwhelming year in San Antonio. The unconventional mid-range offense actually works better than you'd expect (11th in rating), but the problems come on the other end. The Spurs have struggled mightily on D this year, ranking all the way down at 25th. The rotations have been an issue there, with too much Bryn Forbes and Marco Bellinelli and probably too little Jakob Poeltl. It still may feel weird to rank Pop in the bottom half for his performance this year, but I'd ask you: if this team was coached by a random dude named "Joe Schmo," where would you put him? (22) Brett Brown, Philadelphia: 39-26 record This hasn't been a banner year for Gregg Popovich, and it hasn't been a banner year for his protege Brett Brown either. The Sixers made some head-scratching decisions this offseason. They grabbed the biggest pieces they could find, and jammed them together without much regard for "fit." Still, there's a lot of talent here. There's enough talent to justify their 54.5 preseason oveunder, and there's enough talent to compete with everyone in the East (outside of Milwaukee, perhaps.) Instead, the Sixers stumbled along on a 49-win pace, on track for the 6th seed. If this was a normal year without the COVID-bubble, then that would be a much bigger problem. The team is starting to make some adjustments and add more shooters like Shake Milton into the lineup, but it may be too little, too late. (21) Dwane Casey, Detroit: 20-46 record It's hard to judge veteran Dwane Casey either way based on the returns this season so far. The Pistons will fall well short of preseason expectations (37.5 oveunder), but there are obvious reasons why. Star Blake Griffin got injured again, and pseudo-star Andre Drummond got traded away. To Dwane Casey's credit, he's tried to make a meal with the leftovers in the cupboard. Derrick Rose continues to be a fan favorite (if not an analytical darling), and PF Christian Wood appears to be a breakout success. Overall, there's no real identity or grand plan in place here, but perhaps that will change if the lottery balls go their way. (20) Terry Stotts, Portland: 29-37 record Terry Stotts and Dwane Casey may have a few beers after the season and commiserate together about their challenges this year. Like Casey, Stotts has been overwhelmed by injuries -- to Jusuf Nurkic -- to Zach Collins -- to Rodney Hood -- to Trevor Ariza -- etc. All this from a team that didn't have much depth to start. Stotts and the Blazers drew a stroke of good luck with this bubble format. They'll be in the 9th spot right now, and well within range to sneak into the playoffs. If it wasn't for that, Stotts may be drawing more fire. The team's defense has slipped to 27th overall, which is hard to excuse no matter what roster problems you have. Stotts is a good and respected coach in general, but there's a chance his message may have run stale here. If they bomb out in the bubble, I wouldn't be surprised if they look for a fresh voice like assistant Nate Tibbetts for next year. (19) Luke Walton, Sacramento: 28-36 record Luke Walton and the Kings got off to a disastrous start given their expectations. It's never a good sign when your fanbase grumbles, he's no Dave Joerger. But after weathering the storm, there are some signs of hope on the horizon. A bold decision to bring Buddy Hield off the bench has worked out, with the team rattling off a 13-7 stretch before the shutdown. They had a slim chance to rally and make the playoffs if we played a full schedule, and they'll have some chance to do the same in the bubble. Overall, a disappointing start for Walton, but not a complete disaster. (18) James Borrego, Charlotte: 23-42 record It's very difficult to judge James Borrego, because it's difficult to judge exactly what was going on in the twisted minds of the Charlotte front office. On paper, Borrego did an admirable job to take a bad roster and lead them to a decent mark of 23 wins. In fact, their oveunder coming into this year was only 23.5 over a full 82 games (lowest in the NBA). P.J. Washington's had a nice rookie year, and PG Devonte' Graham has been better than expected (although he's cooled off.) At the same time, is this what the Hornets wanted? A "not THAT bad" team? As a result, they'll end up in the 8th slot prior to the NBA Draft lottery, in that dreaded middle ground. In a sense, Borrego did too good of a job squeezing out a few extra wins. I'm inclined to give him props for that because the franchise must have given him a mandate to compete (why else sign Terry Rozier to a big contract?). As a franchise, the team gets poor grades, but as a coach, it's hard to fault him here. (17) Alvin Gentry, New Orleans: 28-36 record James Borrego hasn't had much talent to work with in Charlotte. Down in Nawlins, Alvin Gentry may have too much. Earlier in the season, he appeared overwhelmed by all the pieces on the roster and struggled to develop a consistent rotation for the team. If it wasn't for Brandon Ingram's breakout, the Pelicans could have been in too deep of a whole to dig their way out. Of course, some stocky rookie waddled in, and looked pretty darn good. Zion Williamson gives this team an entirely new ceiling, and has been worked into the lineup in a smart, prudent fashion. For that, Gentry deserves credit. He also deserves credit for having a consistent philosophy. His team is going to run, run, run like Forrest Gump. They've finished in the top 3 in pace each season for the past three years. It hasn't worked like a charm overall, as Gentry will be on track to finish with a losing record for the 4th time in his 5 years, but perhaps they'll finally hit their stride in the bubble. (16) Steve Clifford, Orlando: 30-35 record By this point, what you see is what you get with coach Steve Clifford. We've come to expect a top 10 defense (# 9 this year), but a record around the .500 mark. In his defense, the offensive talent is limited, and Jon Isaac (arguably their best overall player) missed significant time. Still, for Clifford to jump in these yearly rankings, we need to see more of an offensive system in place. (15) Steve Kerr, Golden State: 15-50 record WTF? Why is the coach with the worst record in the league doing all the way up here? Allow me to explain. Being a head coach is like being a jockey. You need to know when to trot, when to stay with the pack, and when to crack the whip and turn up the gas down the stretch. And, sadly, you need to know when your horse is lame and needs to be shot and put out of its misery. Steve Kerr and the Golden State Warriors realized they had a wobbly, broken-down horse early on, and put the breaks on sooner than later. As a result, they'll be locked into the # 1 spot among their NBA lottery odds. In theory that doesn't matter much because the top three teams (GS, CLE, MIN) all have the same odds at # 1 overall. However, if they slide down, Golden State will remain ahead of the others; the worst pick they can get is # 5. That type of patience is rare and admirable for a veteran coach like Kerr; after years of being in "win now" mode, he's showing a long-term vision as well. (14) Nate McMillan, Indiana: 39-26 record The Indiana Pacers continued to chug along with another playoff appearance despite Victor Oladipo missing more time. Coach Nate McMillan (and assistant Dan Burke) deserve a lot of credit for their strength defensively; they finished in the top 10 in defense for the second season in a row. Their scheme works well, and covers for some limited players along the way. If there's any criticism of McMillan, it'd be on the offensive end. The Pacers found a little something with Domatas Sabonis as a playmaker (5.0 assists per game), but it's still not enough to make the team formidable offensively. Their "MoreyBall" rating is the worst in the league -- they finished last in both free-throw attempts and three-point attempts. Some teams can overcome that playing style, but the Pacers haven't been one of them; their offensive rating is # 18 for the second straight year. Given that need, I'd be curious to see if the team could develop Doug McDermott into a Bojan Bogdanovic - type player for them -- he hit 44.5% of his threes, but got only 20.0 minutes a game. (13) Monty Williams, Phoenix: 26-39 record This ranking may seem too high for the coach of a 26-39 team, but we need to consider some context here. The Phoenix Suns had finished with an average record of 20-62 over the last two seasons, so this 33-win pace is a marked step up for them. They've also gotten into the top 20 in offensive and defensive rating. That may sound like mediocrity to you, but again it's a big jump up from the previous year (28th offensive, 29th defense.) Better still, we're seeing some strong player development from this club. Deandre Ayton still looked strong post PED suspension, and Mikal Bridges played well in the second half of the year. After all the mess and goat stink in Phoenix, there are actual good vibes here, and Monty Williams deserves credit for that. (12) Quin Snyder, Utah: 41-23 record Quin Snyder is an awesome coach, only penalized here by his own lofty expectations. Coming into the season, a few pundits though the Jazz may have what it took to be the top seed in the West, but they're going to fall short of that and even fall short of their preseason oveunder (of 53.5 wins). Of course, it didn't help that Mike Conley forgot how to shoot for the few month or two of the season. Still, Snyder's bunch continues to be well coached on both ends, with ball movement on offense and discipline on defense. They'd have been an interesting playoff darkhorse if not for the bad corona-vibes and the unfortunate Bojan Bogdanovic injury. (11) Mike Malone, Denver: 43-22 record Denver's Mike Malone is in the same boat as Quin Snyder; he did a good job, but he's expected to do a good job. I'm going to rank him slightly higher because the Nuggets were slightly ahead, and were also set to slightly exceed their preseason win total (on track to win 54, 1 game better than their 53.0 estimate.) Going forward, it'll be interesting to see if Malone can take his offense up a notch. They play at a very slow pace (29th) and don't shoot many threes (26th). To actually win the title, their shooters will need to step it up. If Gary Harris won't break out of his prolonged slump, then it's imperative that Michael Porter Jr. fulfills his potential and provides that third scoring punch. (10) Doc Rivers, L.A. Clippers: 44-20 record Stars and shooting aren't a problem for the Los Angeles Clippers. It's fair to say they're the most talented roster in the entire NBA. Given that, is their 44-20 record a disappointment? Eh. Maybe. But I'd counter that it doesn't really matter. Doc Rivers' primary mission this regular season was to make it to the playoffs healthy, and the team appears on track to do just that. If there's any criticism here (of a team with a top 5 offense and defense) it's that their best players may not have gotten enough reps together. Do the new kids on the block Kawhi Leonard and Paul George fit with the old guard in Lou Williams and Montrezl Harrell? What's the best starting lineup? Best closing lineup? There are still some unanswered questions here that need to be addressed in a hurry if they're going to fulfill their title aspirations in the bubble. (9) Taylor Jenkins, Memphis: 32-33 record Personally, I expected the Memphis Grizzlies to have the worst in the Western Conference, so it's downright shocking that they're in the 8th spot at the moment. The NBA may be trying to steal that playoff berth away from them, but that won't change the great job that rookie coach Taylor Jenkins has done this year. Are the Grizzlies actually this good? Probably not. Their advanced stats are worse than their record, and Jaren Jackson Jr. hasn't taken the expected leap on defense yet. Still, wins are wins, and a coach shouldn't be penalized for collecting more than he should. (8) Mike D'Antoni, Houston: 40-24 record Based on the simple matter of wins versus preseason expectations (and an oveunder of 54.0), the Houston Rockets have been slightly underwhelming this year. Still, veteran Mike D'Antoni deserves a lot of credit for remaking the team on the fly. Changing from Chris Paul to Russell Westbrook may not be a huge difference in quality, but it's a huge difference in playing style. As a result, the Rockets leapt up from the 26th fastest pace last year all the way up to 4th this season. They'll looking like a proper D'Antoni and Morey team right now. In fact, they've taken that bold experiment up another notch this year by ditching Clint Capela and emulating Rick Moranis. So far, so good. These Smallball Rockets still have some lingering question marks about their defense and their rebounding, but they're extremely dangerous right now nonetheless. It's hard to imagine too many older coaches understanding and embracing this like D'Antoni has. (7) Brad Stevens, Boston: 43-21 record Brad Stevens has always been a media darling, and he's justifying that reputation this year. The Celtics lost Kyrie Irving and Al Horford, but are still top 5 in offense and top 5 in defense. Life without Kyrie has gone swimmingly, opening up some air for young stars Jayson Tatum and Jaylen Brown to breathe; they're both in the running for Most Improved Player. As with Mike D'Antoni, Stevens also deserves credit for working with a limited hand at center. But rather than force the issue and overplay some stiffs, he's understood that the team just may be better off with 6'8" Daniel Theis manning the fort instead. (6) Frank Vogel, L.A. Lakers: 49-14 record It's never a good sign when you sign a new contract with a team, and are immediately placed among the favorites for "First Coach Fired" in Vegas. Frank Vogel walked that tightrope this season, with plenty of spectators expecting him to fail and fall to his demise. Instead, Vogel has kept his head down, and kept his focus, and helped this Lakers team grab the # 1 seed out West. Obviously it's an easier task when you have LeBron James and Anthony Davis, but this isn't a loaded roster otherwise. Moreover, there are a lot of moving parts and new pieces to work in. The fact that Vogel has this largely-old team ranked # 3 in defensive rating is a true testament to his success this year. (5) Mike Budenholzer, Milwaukee: 53-12 record Milwaukee's Giannis Antetokounmpo is on track to win his second consecutive MVP award. While we tend to think the media likes new "narratives," but we've seen repeat winners before. Since 2000, Tim Duncan repeated as MVP, Steve Nash repeated as MVP, LeBron James repeated as MVP (on two separate occasions), and Steph Curry repeated as MVP as well. Coaches don't get the same luxury. In fact, since the award was created in 1962, the Coach of the Year winner has NEVER repeated the following season. You win once, you get to the back of the line. That tendency has really hurt Mike Budenholzer's candidacy this year. On paper, he should absolutely be in the running. The Bucks are once again # 1 in defense, # 1 in overall rating, # 1 in W-L record. They're on a better pace than last year's team, despite losing Malcolm Brogdon over the summer. If Giannis can repeat for the same feat twice, why shouldn't Budenholzer be allowed to do the same? (4) Rick Carlisle, Dallas: 40-27 record Everyone expected the Milwaukee Bucks to be dominant, but no one expected the Dallas Mavericks to be this good, this early. They've jumped the line and arrived in the playoffs earlier than schedule. They're only 1 win away from beating their preseason oveunder of 40.5 despite all the missed games. Like Mike Budenholzer, Rick Carlisle has benefited in that endeavor from a transcendent player in Luka Doncic. At the same time, this Mavs' machine has been rolling with and without Doncic. They rank # 1 in offensive efficiency this year, and depending on whether you want to factor in pace and league trends or not, they may have one of the best offenses we've ever seen from a statistical standpoint. It's quite an achievement from a coach who cut his stripes as a defensive specialist, and indicates the type of attitude that coaches need to adapt and evolve over time. (3) Erik Spoelstra, Miami: 41-24 record The Miami Heat pulled a free agency coup by signing Jimmy Butler away from Philadelphia. Still, it's not like people expected that to vault them to the top of the East. Butler was a good player, but a difficult one to manage. He blended into the crowd as well as a skinhead at a Bar Mitzvah. Overall, adding Butler only boosted the team's preseason oveunder win total to a modest 43.5. Turns out, Butler fit in better with the Heat than anyone expected, on and off the court. Butler hasn't shot well from the field, but his attacking and playmaking helped open up the offense (6th in the league) and propelled the team to a 51.7-win pace. He's fit in like a glove in terms of their tough-dude culture as well. Erik Spoelstra should get huge props for developing that culture and that system. But more than anything, he deserves credit for their player development system. Sure, Jimmy Butler is a star, and Bam Adebayo had star talent. At the same time, no one had ever heard of players like Kendrick Nunn and Duncan Robinson at this time last year. These are complete randos who will make a combined $3M this season -- just half of Cristiano Felicio's salary. Having a coach who can grow talent like that in his backyard is a huge advantage for any franchise. (2) Billy Donovan, Oklahoma City: 41-24 record After Oklahoma City blew it up this summer by trading Russell Westbrook and Paul George, coach Billy Donovan felt like a dead man walking. Instead, Donovan and those fireproof zombie hordes in OKC sieged to a 41-24 record. How good is that? Hell, it's an even better winning percentage than the team had last year with Westbrook and George (in a career year.) Given all this surprising success, Donovan would be a fair winner of this award. He's managed to take in a bunch of new bodies and form a cohesive team. He's even had success playing three point guards together (CP3, Shai Gilgeous-Alexander, and Dennis Schroder.) If you want to nitpick his candidacy, you could point out that the hodgepodge roster has a lot of talent scattered throughout. Chris Paul had become underrated, and Danilo Gallinari has always been underrated as well. The team's low preseason oveunder total (32.5) was largely based on the uncertainty about further trades. Everyone knew that this team had the talent to be competitive if they stayed together. Still, no one expected them to be this good. (1) Nick Nurse, Toronto: 46-18 record Last season, Nick Nurse finally got his first chance as an NBA head coach. He ended up having as good of a rookie year as anyone since Henry Rowengartner. Nurse coached circles around some of the best in the business en route to a championship season. Amazingly, he may have been even more impressive this year. Without Kawhi Leonard and Danny Green, the Toronto Raptors held steady and didn't miss much of a beat. In fact, they're on pace to win 58.9 games, over a dozen more than their preseason oveunder of 46.5. Technically, Nurse still has limited experience as an NBA head coach, but he's already proven to be one of the masters. If we were to judge based on the results of this (semi-)season only, he'd be my personal "Coach of the Year."
$LPTH - DD - lightpath technologies - A company which is growing and will keep on growing
Overview: LightPath Technologies is a recognized leader in optics and photonics solutions, serving blue chip customers in the industrial, defense, telecommunications, testing and measurement, and medical industries, for over 35 years. LightPath designs, manufactures, and distributes optical and infrared components including molded glass aspheric lenses and assemblies, infrared lenses and thermal imaging assemblies, and fused fiber collimators. LightPath also offers custom optical assemblies, including full engineering design support for both optics and mechanics. This allows for the highest level of optical integration, lower cost, and ensures the highest level of quality, performance and manufacturability. Presence in multiple countries:.
Customers: Look at these customer list, detailed list in the pic. They are separated by Infrared and Visible light. Same can be found HERE
INFRARED OPTICS : Infrared lenses designed for thermal imaging cameras operating in the mid-wave and long-wave infrared (MWIR, LWIR) bands, for applications such as thermography, diagnostics, security and surveillance.
ASPHERES : Precision molded glass lenses for applications in the visible and near-infrared (NIR) wavebands, such as small beam collimation, focusing and fiber coupling.
COLLIMATORS : Geltech™ aspheric glass lenses mounted in standard fiber-connector housings, for use in coupling and collimating applications in the visible and near-infrared (NIR) wavebands.
ISP OPTICS: We are your source for the most unique selection of IR lenses, windows, beamsplitters and other IR optical components in the industry at the best prices.
Recent News, catalysts, facts:
LightPath Technologies Continues to Experience High Market Demand for its Molded BD6 Family of Thermal Lenses. Received New Orders Totaling More Than $1.7 Million in Asian Market for Medical and Sensing Applications. Details are HERE
Jul 21 - CEO Details Competitive Advantage to Fuel Rapid Growth LINK HERE
Inclusion in Russel Index: The company was recently added to Russell Microcap Index on Jun 29. Details can be seen HERE
Infrared lenses market is projected to grow to $750M by 2024, with Chalcogenide growing to 65% of the market
Lightpath molded lenses are used in telecom equipment in interfaces of light in and out of fibers, detectors and lasers
5G network architecture requires closer together network access points, leading to higher demand of lenses
Far outperforming their industry: LPTH demonstrates a +10.16% growth in revenue based on a trailing 12-month window, versus the entirety of the Electronic Equipment, Instruments & Components Industry in which they compete, which was down -2.22% on average. Lightpath knows how to operate in their industry and can create profitability even post-Covid-19. Even in this profitable sector, LPTH outshines many other earners with a gross profit margin of 44.9% in the trailing 12-month window, versus the industry’s 38.1%.
Job posting: A whole lot of new job posting than usual for this company in this quarter. details HERE
All-Time high sales: With recorded revenue of 33.75 Million, LPTH’s 2019 revenue has set new records every year for the past 5 years running, and (excluding Depreciation and Amortization expenses) record income each concurrent year. The team behind LPTH knows how to drive valuation and increase their company’s profitability and understand how to scale a tech firm. https://www.marketwatch.com/investing/stock/lpth/financials
Insider trading : On Jun 22 there was a purchase of 1,750,000 shares at 2$. details HERE .
Gross margin as a percentage of revenue was 46%, up from 39%
Net income was $816,000, compared to a net loss of $352,000
12-month backlog reached another record of $20.0 million at March 31, 2019, compared to $17.1 million at March 31, 2019
Operating expenses decreased to $2.9 million for the third quarter of fiscal 2020, compared to $3.1 million in the same quarter of the prior fiscal year.
Growth: Company uses Chalcogenide and its low cost and very high demand. see this article Increased mutual fund ownership Mutual funds have been increasing their positions in LPTH, with previous quarter increases exceeding 48.13% .These funds include Vanguard, Royce, and Fidelity – all moving their positions deeper with Royce now holding 4.4% of the company’s shares. This shows high interest from proven winners who understand the market and a confidence in the long-term profitability of the firm. https://eresearch.fidelity.com/eresearch/evaluate/fundamentals/ownership.jhtml?stockspage=ownership&symbols=LPTH Analyst opinions - Refinitiv/Verus has a strong BUY opinion, ranking it with their “SmartIndex” score of 37.41% - a very bullish signal that indicates a strong reasoning to increase positions. This has been upgraded by 3 firms from a Neutral position to a bullish BUY, with FBR indicating a 1-year history of nearly constant outperformance for the relative sector. Upcoming catalyst: Strong earnings this year, with earnings upcoming September 10th. – Q2 and Q3 have both met or exceeded EPS estimates, with current estimates indicating a repeat of this for the upcoming report. Higher earnings per share is one of the key factors to look at when evaluating the feasibility of any Price Target: This company has a solid growth. Here is a article which clearly explains thermal imaging market continues to rapidly expand and company has a great future. This is a low float once it gets the eyes it can be move a lot. Risks: LPTH has little demonstrated interest in the usual PR-spam that people interested in volatile growth like to see. They focus on their work, and not so much pumping the news cycle. This is both good and bad – when positive PR releases do happen, historical charts show growth is positive and quick – yet the inverse is likely also true. This does also present the benefit of being a safe-haven versus a highly volatile, high volume play. Relatively low-float – Shares are, by nature, subject to higher volatility and offerings once the prices begin to increase. In companies that stay under the radar such as LPTH, there are opportunities for both buyers and short-sellers, and there is ample opportunity to end up a bag-holder if responsible exit plans are not in place. (This hopefully is becoming a common practice for everyone – know when to leave before you get in! Stock History: Look at the stock history it has been constantly growing from last 6 month. It was at .63 and now trading around 3$. Its not a pump dump but a company which actually has a growth and a solid investment as well.
Activision ($ATVI) is releasing their quarterly earnings on August 4th (8/4). They're up about 30% from their pre-Covid highs, and are currently valued around 10x annual revenue. They crushed their last earnings revenue by 15.30% and EPS by 53.28% which helped them on their run-up to their current levels. I am now going to convince you why they will smash their earnings again despite their already-inflated revenue projections that price in a coronavirus boost and why you should bet big on them and not miss out on a potential huge play. Me and one of my friends from school (who is very intelligent) used to roast the shit out of people who buy cosmetic items in-game, like in Call of Duty, and talk about how dumb it is to pay for in-game clout. But during the pandemic, like many people, he's been so fucking bored that he's been playing Call of Duty all day unlocking a bunch of gun camos. The other day, he (embarrassingly) admitted to me that in his pursuit of gun camo unlocking he (shamefully) bought a $10 "battle pass" that would help him unlock more cosmetics. Why not, he is getting paid unemployment + stimulus to sit home on his ass and play Call of Duty, so might as well put a little of that into the game because there's nothing else to buy right now. (Last time I had a moment like this? In early April when one of my much dumber friends asked me with help setting up a Shopify store. I was dumbfounded that he would even be trying to set one up. Since then Shopify is up more than 120%) Call of Duty Warzone and Call of Duty Modern Warfare are very popular, and just like all those nerds that played Fortnite and forked over tons for skins, there are a plethora of microtransactions that come with it and man do the people that play Warzone specifically everyday take it seriously. This got me thinking. How many people who never bought microtransactions before have now spent money on them, especially when somebody as resilient to them as my friend have now purchased them? What kind of assumptions can we make about how much bigger the microtransaction market got during the pandemic? The answer I believe is that because people are playing these games so frequently when they had never done so before, they start to assign more value to their in-game character and want to appear to have more "clout" and seem good at the game. It is this value that somebody assigns to their in-game experience that when high enough drives the user to purchase content for their character and spend real dollars. That coupled with the fact that they get free money from the government while doing nothing makes the target market for these games especially excited to start spending. But it isn't just that the existing users are spending more - the microtransaction market size is expanding, so much so that my friend who once considered himself way out of the microtransactions market and laughed about ever spending money on shit for a video game decided to spend money on it for the first time. This isn't just a one-off thing I'm noticing with a stupid friend, because he is in fact not stupid, rather it's a psychological effect caused by having way too much time to play video games and stimulus money that Activision's target market doesn't want to spend elsewhere. According to surveys, in Call of Duty 60% of people purchase downloadable content. In Overwatch, it's 62%. In Hearthstone, it's 71%. In StarCraft, it's 42%. Source: https://venturebeat.com/2019/11/19/arm-treasure-data-the-most-popular-games-arent-necessarily-using-lots-of-microtransactions/ What if in all these games, which are owned by Activision, that percent has risen substantially because so many people have been playing them so often during the pandemic and as a result of the effect I previously described that my friend was victim to? This survey was conducted using people that consider themselves to play video games regularly, meaning people that play pretty much daily. So we have to keep in mind that the population of people that play daily is ALSO increasing because of the pandemic, while the raw % of people that will spend on microtransactions is also increasing. Well what's the big deal, it's just a few in-game purchases right? Wrong. In 2019 Activision pulled in $6.49 billion in revenue. Of this $6.49 billion in revenue, a whopping 50.85% or $3.3 billion came from in-game microtransactions. $3.3 billion in a year for some pixels what the fuck right? And the kicker? There's nearly a 100% profit margin on these microtransactions, which is why last earnings (which ended March 31 and contained what is a decent increase in microtransactions because people hadn't been sitting on their ass for too long yet) Activision reported a 28.24% net margin, up 15.31% YoY. Last quarter they came in at $1.52 billion in revenue versus the $1.32 billion expected revenue. This earnings report, the consensus revenue estimate is $1.68 billion (representing a whopping 39% YoY growth) which is set nice and high - but I'm going to tell you why this is still going to be beat. For Q2 of last year, Activision reported $1.21 billion in revenue. Ok, now we're going to do some conservative math, estimate the lower bounds of the earnings, and show why this quarter's earnings will be beat. Let's assume 0% YoY growth, ignoring the addition to the revenue that games like CoD Warzone had, so they'll be making $1.21 billion as a base like they did in Q2 of last year. Last quarter, microtransactions made up an astounding $956 million of the $1.522 billion in revenue, equaling about 63%, and that was just at the beginning of the pandemic when the I'm-staying-home-so-now-I-value-this-game-more effect that I am describing was just coming into fruition. AND THAT WAS BEFORE STIMULUS CHECKS WERE RECEIVED. Let's be conserative and assume that of that baseline $1.21 billion that we will use to come up with earnings for this quarter, $726 million or about 60% is from microtransactions, even though this % is most likely rising on track with the previous quarter's trend which had 63% of revenue from microtransactions. Now let's try to estimate what the increase in volume of microtransactions is like if even my friend who was sworn against them played enough to care about cosmetics because he had played the game for long enough. So, not only are we increasing the number of people that want cosmetics and other in-game purchasable items, but also accounting for the fact that the people who already spent a lot on them will now spend more because they play more. This is inclusive of Call of Duty, World of Warcraft, and the Candy Crush Saga which are their big three microtransaction earners. I'm convinced that the volume on these things has to at least have doubled YoY. But for the sake of argument, we'll say they have only increased 75%. Why is this a fair estimate? Last quarter, microtransactions for Modern Warfare were up 100% compared to Black Ops 4 in the same quarter the previous year. We don't want to over-estimate and get our hopes up, we want to make sure this very ballpark math that we are doing can beat revenue estimates even on a considerably lower bound, giving us a high % chance of being right about the actual figure. To further justify this kind of growth in microtransactions, we're going to look at a few things. This report is for months April, May, and June, meaning last quarter's results ended with March. Here are the latest active player count statistics for Warzone: https://www.statista.com/statistics/1110000/call-of-duty-warzone-players/ As of May, there are 60 million Warzone players - this is where there will be a large number of microtransactions which were barely included in the previous quarter because they had less than 40 million players by the end of March. A large part of last quarter's revenue came from CoD Modern Warfare's (not Warzone) season 1 and 2 in-game purchasable content. According to Google Trends, Season 4, released in June, garnered more interest than any other season: https://trends.google.com/trends/explore?q=modern%20warfare%20season&geo=US Also since last quarter, interest in buying CoD points (their currency) has gone up tremendously: https://trends.google.com/trends/explore?geo=US&q=buy%20cod%20points So let's take our baseline $1.21 billion assuming 0% YoY growth, and increase the revenue generated by microtransactions by 75%. $1.21 billion + ($726 million * 0.75) = $1.754 billion, beating the $1.68 billion consensus only by factoring in a growth in microtransactions and absolutely nothing else, when in reality up-front game sales (purchasing games online for full price), subscriptions, merchandise, and other revenue streams have also increased. This way, even if we've over-estimated our microtransactions boost, there is more than enough room to still trounce earnings from the added revenue from other streams. And if we were very accurate about the microtransactions boost, then that additional revenue will send us way over. Activision already killed earnings last quarter with barely any money coming in from Warzone. l would not be at all surprised if they reach $2 billion in earnings, representing almost a 20% beat of expectations. At $2 billion per quarter and a 10x revenue valuation, Activision would be valued at $80 billion representing a 30% move. ACTIVISION IS GOING TO BEAT AN EARNINGS ESTIMATE THAT IS ALREADY HEAVILY ACCOUNTING FOR THEIR CORONA BUMP. The options are cheap for Activision, so I am loaded up. I think realistically it will have a pre-earnings run up as more people realize that they're going to do very well on earnings and then go up even more on beat earnings. The downside risk on a stock like this is low considering it is a stay-at-home that has had its value increased REASONABLY by the pandemic and is not trading at a ridiculously high tech revenue multiple. At peak rona season, the stock fell roughly 20% and has since rebounded about 56%. Positions: ATVI 8/21 90C ATVI 8/21 100C My positions: https://imgur.com/a/CobyxYe TLDR: Microtransactions made up 63% of Activision's earnings last quarter when they beat revenue estimates by 15.30%. This quarter not only are microtransactions going to make up a larger percentage of the revenue, but the revenue will be much larger with help from the pandemic and the 60m+ new Call of Duty Warzone players. I've also bolded the more important information if you don't want to read through everything. EDIT: Warzone, like Fortnite, is a free download. A comparable game is Fortnite, which at its peak popularity had a revenue per user of a shocking $96 (Source: https://fortniteintel.com/report-fortnite-is-earning-double-the-revenue-of-google-twitter-snap-and-facebook-per-use9265/ ). If we assume that Warzone has just 1/20th of this revenue per user, we're already at an additional $288 million in revenue from Warzone alone.
Rather than panic, let's take stock of where we actually are..
As the title suggests, rather than panic, complain, bitch and go through the he sucks, and fire that, let's take a different approach...like what really happened against the Jackets and how the team has been constructed. Regards to 'get rid of Barrie and Ceci' postsBased on how they were acquired and for what players, it was clear to me right from the day the trade was made that both of these players came aboard the Leaf roster with the intention of letting them go at the end of the year. They both were traded for players with longer contracts. Effectively Dubas traded long contracts for short ones. I firmly believe the intent to the trades was to get Sandin and Liljegren another year to gain more experience. This move also freed up 8m in cap space for next year as well. Regards to they don't work hard enoughI'm not sure what game you were watching, but for the majority of the series, the Leafs were clearly the better team. The actual advanced stats agree. The Leafs possessesed the puck far more than the Jackets. They had more high danger scoring chances. Their expected goals were a LOT higher than Columbus. All this points to the FACT that yes, they worked hard and were the better team. Regards to Mitch Marner being soft and not worth the cashWhile I agree, the eyeball test smelled a little bit, you cannot dispute the fact that Mitch was the #1 driver of puck possession on the Leafs. (Corsi: Marner: 58.6, Tavares: 56.7, Matthews: 55.4) On top of this, he proved his value as a 2-way player. This is determined because when he was on the ice, the Leafs outshot and out chanced the Jackets by a very large margin. Out of the big 3 (Marner, Tavares and Matthews), his numbers actually outshine theirs by a wide margin (Fenwick rating: Marner: 60.6, Tavares: 56.8, Matthews: 56.4). Add this to the fact he appears to be a fantastic penalty killer, it shows how valuable he actually is. Regards to the series lossPlain and simple. They lost purely because of how well Joonas Korpisalo played. Period. His typical save percentage is just .911. In this playoff it was an all-world .956. The shots he was stopping were not all easy as the Leafs had TONS of high danger chances. There were at least 3-4 of them last night alone that typically would have been goals. There is no doubt, he played out of his mind. One stat to keep in mind...goals saved above average (which means how many save he made that would typically be a goal) was 4.19. This is a very glaring number. Typically it's 2.77. If he plays per his normal performance, the Leafs likely win the series 3-0. Heck, if just the pucks that hit posts go in they win the series. The Leaf style of play cannot work in playoffsI disagree. They had the puck so much that the Jackets generated very little offense. Puck possession is a powerful thing. If you have the puck, they cannot score. Plain and simple. They got a couple of goals that were total flukes (aka the one off of Barrie last night). I think they can do just fine in playoff situations with simply having more experience. In summary:Yes, the Leafs have a cap space problem, that is VERY clear. Yes, it will be difficult to add the defensive presence they need. Yes, COVID may (and probably will) prevent the Leafs from getting much beter without moving a player or two. That being said, the plan is, and always was to develop the prospects in the system for a few years. Austin Matthews is only in his 4th year. How long did it take Ovechkin to win the cup? Same question for Crosby? Same question for Stamkos? Winning a cup is more than having good players. They need to learn how to win. This takes time...patience is key, not knee-jerk reactions to a series that they deserved to win. Feel free to disagree, however, I believe if you objectively look at the team, it's makeup and how this series was played, you might just feel the same way.
https://preview.redd.it/it6vqxvxzci51.jpg?width=900&format=pjpg&auto=webp&s=d5ba4c7f80a1439c4283f4b30e3514629fcf504b Now that we have passed the opt-out deadline and are only about three weeks away from the Chiefs and Texans kicking off the 2020 NFL season, I wanted to put together my pre-season power rankings and put all 32 teams in separate tiers, to give you an idea of where I see them at this point. When putting together this list, I considered the talent on the roster, coaching staff and what will be a more important factor coming into this season than it has been in previous – the continuity as a franchise, since the COVID situation has limited the amount of preparation and ability to build chemistry as a team. That will be especially tough for new head coaches and inexperienced teams. With that being said, this is how I would group them:
Super Bowl contenders:
This group of four represents what I think are the four elite teams in the NFL. They all feature complete rosters, excellent coaching and continuity as a franchise. I think these are the franchises that will most likely square up against each other in the conference championship games on either side of the bracket. 1. Kansas City Chiefs We have heard this many times over the course of the offseason – the reigning Super Bowl champs bring back 20 of 22 starters (actually 19 now) on offense and defense combined. They have the best player in the league, the most dangerous receiving corp, above-average O-line play and a still improving defense, that just added some much-needed speed at the second level, which will allow DC Steve Spagnuolo to even more versatile. So at this point I can not have anybody unseat them. I think Clyde Edwards-Helaire (LSU) will be a star in that offense, they get a couple of guys back that missed their playoff run and there are plenty of young, developing players on that roster. What general manager Brett Veach has done this offseason in terms of securing Patrick Mahomes for the next decade and still opening up cap room to also sign their best defensive player in Chris Jones is amazing to me. My only two concerns for Kansas City at this point are a lack of depth in the secondary and the fact they will have to go on the road when they face the four best teams on their schedule – Baltimore, Buffalo, Tampa Bay and New Orleans, which has me favoring the second team on my list for the number one seed in the AFC and which this year means having one more game in the playoffs on their road to another Super Bowl for Andy Reid’s troops. 2. Baltimore Ravens Right behind the Chiefs, as the biggest competitor for the AFC is Baltimore. They were the best team in the regular season from this past year, but the Titans handed them only their third loss of the season in the Divisional Round at home. While they did lose what to me is a first-ballot Hall of Fame guard in Marshal Yanda, outside of that the Ravens to me have an even better roster. The reigning MVP Lamar Jackson is only entering his third season in the league, the Ravens just added a top prospect in J.K. Dobbins (Ohio State) to a backfield that set a league-record in rushing yards and some of these young receivers will continue to develop. On defense, they addressed the two areas that needed some help, when they brought in Calais Campbell to boost their pass-rush and two top-six linebackers on my board in the draft (Patrick Queen & Malik Harrison). They may not have as many superstar names as some other teams, but without a full offseason to prepare for it, that Greg Roman offense could be even tougher to stop if Marquise Brown becomes a more dependable deep threat (now fully healthy) and I love how multiple Wink Martindale is with his defense, combining the different pressure looks to go along with more versatile pieces up front and one of the elite secondaries in the game. You combine that with a rising young special teams coordinator in Chris Horton and a great motivator and in-game decision-maker in John Harbaugh – I just can’t find a lot of L’s on their schedule. 3. San Francisco 49ers Obviously the Super Bowl hangover will be brought up a lot of times with the loser of that contest, but unlike a lot of these teams coming off the big game – yet similar to the actual winners in the Chiefs – John Lynch did a great job re-tooling for the few losses they did have and didn’t overspend on some of their talented guys. Kyle Shanahan to me is the best offensive play-caller and game-designer in football, with a diverse rushing attack and the type of personnel to match it, while Jimmy G, despite some issues, is coming off his first 16-game season in his career. Defensively, they are losing what I thought was their best player in DeForest Buckner, but they did replace him with a top ten prospect in Javon Kinlaw (South Carolina) and Fred Warner is an emerging superstar. Their Seattle-based scheme under Robert Salah may not be very complex, but the Niners have a ferocious pass-rush, fast-flowing linebackers and a great safety tandem to be very sound in their execution. The Deebo Samuel injury is definitely a concern for me and if he doesn’t get back a few weeks into the season, I might drop San Fran a spot or two, plus I don’t love what they have at that second cornerback spot, but as for now I see the recipe that made me predict them winning the NFC West ahead of 2019 and what allowed them to be up double-digits in the fourth quarter of the Super Bowl. 4. New Orleans Saints One of the themes this offseason for me has been how loaded this Saints roster is and that they just need to win this year. This is the final season with Drew Brees at the helm, they are already in a horrible place with the cap – before that even goes down in 2021 – and to be honest, a lot of their key contributors are getting pretty old now. While I have seen a significant drop-off in the arm-strength of Brees, other than that I don’t see any offense with this Sean Payton-led offense – the front-five is elite, Alvin Kamara should be back to 100 percent as a dynamic dual-threat back and they finally found a number two receiver in Emmanuel Sanders. When healthy, that defensive line is a dominant unit, I think third-round pick Zack Baun (Wisconsin) gives that linebacker group some versatility and they have a lot of experience in the secondary, including a guy I thought would be a future star on the outside in Marshon Lattimore. Before anything else, they need to take care of divisional-rival Tampa Bay – which is a very tough challenge already – but if they can do that, they are fairly in the hunt for the NFC’s top seed. There’s a lot of pressure on this group because of the cap situation, their all-time great QB having his “Last Dance” and brutal playoff losses in recent years, but they have all it takes to finally break through all the way.
This second tier consists of eight teams that to me have only or two holes on their roster, while their coaching gives them an advantage over the majority of teams in the league and they bring back most of their pieces from a year or at least improved in those areas. I expect all but one of these squads to make the playoffs in 2020, as long as they don’t suffer significant injuries along the way. 5. Tampa Bay Buccaneers Number five in the entire league seems pretty high for a team that finished below .500 last season, but this is not just about Tom Brady coming in, but rather the roster Tampa Bay has built around him. To me Mike Evans and Chris Godwin are the top receiver duo in the league, the Bucs arguably have the best tight-end room in the league and the offensive line only got better with superhuman Tristan Wirfs (Iowa) playing one of those spots on the right side. I have talked about this a lot over the offseason, looking at the match between Bruce Arians’ vertical-based passing attack and what Brady is used to, in terms of spreading the field and getting the ball out of his hands quickly. My bet is they go to a bit of hybrid and figure things out. Maybe more importantly, I don’t think people realize what they have put together on defense. Last season the Bucs finished number one against the run, they forced the fifth-most turnovers (28) and tied for sixth with yards per play (5.1) in the league. Todd Bowles is excellent defensive mind, who now enters his second season with as much talent as he has had since his Arizona days. Jameis turned it over 35 times last year (12 more than any other player in the league), while Tom didn’t even crack double-digits once again, and he immediately improves their situational football awareness and overall execution. This is a very dangerous squad. 6. Dallas Cowboys When you talk about some of the most talented rosters in the league, the Dallas Cowboys come to mind right away – especially on the offensive side of the ball. Dak Prescott now has one of the premiere receiver trios with the selection of Ceedee Lamb (Oklahoma) in the draft, still probably a top-five offensive line and Zeke looking to re-establish himself as a top-tier back, after looking a step slow for most of last season. Defensively they are getting back Leighton Vander Esch, whose energy they desperately missed for stretches last season, and they have a very deep rotation at the defensive line (even though nobody knows what we’ll get from a couple of guys that were out of the league), while Mike Nolan will change things up a little more and get his guys into the face of opposing receivers. We have yet to see how much Mike McCarthy will want to have say in the offensive play-calling, but I like that they retained a young and creative OC in Kellen Moore, and as far as in-game control and CEO duties go, I certainly believe McCarthy is an upgrade. There are some questions with the secondary after the loss of Byron Jones and losing Travis Frederick to retirement hurts, but I think those are things that can be overcome. Something that I think should not be overlooked is the signing of former Rams kicker Greg Zuerlein and his special teams coordinator John Fassel, after converting only 75 percent of their field goal attempts last season (6th-lowest in the league) and missing a couple of crucial kicks. 7. Philadelphia Eagles Right behind the Cowboys, I have their division rivals from Philadelphia. I think the Eagles actually have a better quarterback, the best defensive player among the two teams in Fletcher Cox and a more experienced secondary. However, with Brandon Brooks out for the season and maybe the worst group of linebackers in the NFL, I could not put this group ahead of Dallas, even though they have come up victorious against them in the big games recently. Last year Carson Wentz carried a group of skill-position players from the practice squad and a banged-up O-line to a division title. This upcoming season he will go from already wasn’t an overly dynamic receiving crew to a group of track stars, most notably with first-round pick Jalen Reagor (TCU) and a hopefully healthy DeSean Jackson, plus Miles Sanders I think is ready to emerge as a star back for Philly. The defense did lose some long-time stalwarts like Malcolm Jenkins and Nigel Bradham, but I loved the addition of Javon Hargreave in the middle to free up the other guys to attack upfield and with Darius Slay as their new CB1, not only does that move everybody one spot lower on the depth chart, but it also finally makes more sense for Jim Schwartz to be as aggressive with those zero-blitzes, since he has the guys to cover. Those two newcomers also fit perfectly when matching up against Dallas, because of an improvement interior run defense and having a guy who can match up with Amari Cooper, after the other guys got toasted for the most part. 8. Buffalo Bills For the first time in about twenty years, a team not named the Patriots will enter a season as favorites in the AFC East – and it’s actually not that close for me. Buffalo made a switch last season offensively to more 11 personnel and quick-tempo with Brian Daboll moving to the booth. This offseason they finally got the big-armed Josh Allen a dependable deep threat in Stefon Diggs, who averaged 12.0 yards per target last season (second-highest in the league), which – similar to what I just talked about with the corners in Philadelphia – moves everybody else down one spot in the food chain. And I love what they do defensively, with Sean McDermott and Leslie Frazier’s game-plan specific zone pattern coverages, with a versatile secondary to execute those, to go with a deep D-line and two super-rangy linebackers. Even outside the Diggs trade, Buffalo has made some sneaky-good deals since losing that Wildcard game at Houston in such heart-breaking fashion. Whether that is Mario Addison as double-digit sack guy in four straight years, added depth on the O-line or a really solid draft class to complement what they already had. I don’t want to crown them at this point, but to me they are the favorites for the AFC’s number three seed as for right now, since I think the South doesn’t have that clear front-runner to win the majority of their divisional games. 9. Seattle Seahawks I would have probably had the Hawks as the final team of this group or right at the top of the next one a couple of weeks ago, but after acquiring Jamal Adams, I think they have re-established themselves as that second team in the NFC West, since I had them very close with Arizona originally, I did not love what they did in the first two days of the draft (somewhat of a trend with them), they lost their second-best defensive player at that point in Jadeveon Clowney, I’m not sure if they upgraded on the offensive line and we don’t even if know if Quinton Dunbar will be suspended at this point. With that being said, Seattle has finished above .500 every single year with Russell Wilson under center and while I’m not a fan of their conservative approach offensively, where they don’t allow Russ to throw the ball on first downs and push the tempo a little at times, they are one of the most effective rushing teams and they have two lethal weapons to catch those trademark rainbow balls from the Seahawks QB. Defensively there are still some questions about the edge rush and at second corner spot, but Pete Carroll at least has what he wants most in a team at those positions – competition – and you already saw them go to more two-high looks in coverage than we are used to, telling me they utilize Jamal’s versatile skill-set more than what that strong safety mostly does in that system. 10. Green Bay Packers The whole Aaron Rodgers-Jordan Love drama has been looming large over the offseason and that has brought us some interesting discussions, but let’s not allow this to take away from the fact Green Bay just had a first-round bye in the playoffs and made it to the NFC title game. While they were 8-1 in one-score games and should regress more towards the mean in terms of the success rate in those close games, the North is still wide open and they have a few things going for themselves – they have the best quarterback in the division, the best offensive line, the most versatile and effective pass rush and a lot of young talent in the secondary. The first-round selection of a future signal-caller aside, I wasn’t too fond of what they did in the draft. Even though I liked Cincinnati’s Josiah Deguara and can see what they want to do with him as H-back/move guy in this offense, I thought they did not get Aaron Rodgers help in the receiving corp, which has no proven commodity outside of Davante Adams. Their defense got absolutely steamrolled in two games against the eventual conference champion 49ers, but I hope to see Rashan Gary develop in his second season and I think Christian Kirksey was a very under-the-radar signing as a run-stopping linebacker. I think schematically with Matt LaFleur’s offense based on what they did under Sean McVay and Mike Pettine being very creative himself they are one of the better coaching staffs in the NFC, but I would like to see them open up the offense more for Rodgers and break tendencies more often with their coverage calls. 11. Pittsburgh Steelers Another very dangerous squad for me is the Steelers. I have talked many times about how bad the Steelers quarterback situations was last season, as both Mason Rudolph and Devlin Hodges finished near the bottom in air yards per attempt, percentage of throws beyond the marker and many others. We have only seen Big Ben throw in some short clips on the internet, but if he is just 70-80 percent of what he was in 2018, this team is bound for a playoff berth. There are some question marks with this group of skill-position players, but I expect Juju to bounce back in a major way with a capable QB and being healthy himself, I have already picked Diontae Johnson as a breakout candidate for this season and I like the diversity of this group of backs. Pittsburgh’s defense was already elite last year, finishing top five in both yards and points allowed, tied for first in yards per play (4.7), the most takeaways (38) and sacks (54). If former Raven Chris Wormley can replace Javon Hargreave as a two-down run-stopper at least and rookie Antoine Brooks Jr. (Maryland) can fill a very specific role as their second sub-package linebacker in place of Mark Barron, I think they will one of the scariest units in the NFL once again. So the best all-around defense for my money and an offense who I would say has top ten potential at the very least is a tough match-up. Maybe not quite battling with the Ravens for the North, but the top Wildcard spot for sure. 12. Indianapolis Colts If there is one team in the AFC that could go from finishing sub-.500 to making it all the way to the conference championship game, the Colts would be my pick. I thought Philip Rivers had a really rough 2019 campaign, in which his arm looked rather weak and his decision-making hurt the Chargers on multiple occasions, but he will play behind by far the best offensive line he has ever had and they will run the heck out of the ball. Indy already had a pretty good back in Marlon Mack, but Wisconsin superstar Jonathan Taylor, who they selected in the second round, will be one of the front-runners for Offensive Rookie of the Year if given the chances in combination with what I believe is the best front-five in the entire league, plus their other second-rounder Michael Pittman Jr. (USC) will be that Vincent Jackson/Mike Williams type target for Rivers. More importantly, with the trade for a top 50 player in the league in DeForest Buckner, this entire Colts D immediately takes a step forward, since he is a perfect fit as that 3-technique in their front and help them disrupt plays at a much higher rate, to go with range in zone coverage behind that, including the “Maniac” Darius Leonard chasing people down. I’m a big fan of Frank Reich and the coaching staff he is has put together, in terms of in-game decision-making, offensive gameplans and just the intensity his team plays him.
Fringe playoff teams:
This middle tier is made up from all those teams who I expect to be at .500 or above, firmly in contention for a Wildcard spot at least. They can be some areas of concern, but overall they have the roster ready to compete with the big dogs and/or feature above-average coaching. With a couple of these there is a change at quarterback and head coach respectively, but they have enough around those to overcome that. 13. Tennessee Titans This definitely seems a little low for a team that is coming off an AFC Championship game appearance, but people seem to forget the Titans were 8-7 ahead of week 17 and if it wasn’t for the Steelers losing their final three games, this group wouldn’t have even been in position to lock down the six seed. Things were also made a lot easier by their division rival Texans, who sat most of their starters after beating Tennessee two weeks prior. So as impressive as their playoff run was, you have to think of what happened before that and put it into perspective a little. With one more playoff spot in each conference, their chances of making it to the tournament should be at least equally as good, but I believe the Colts are the favorites to win the South and for me the Steelers are the favorites for the fifth seed. With all that being said, there is plenty to like about this team still – they can pound you with the Derrick Henry and the run game, Ryan Tannehill at least gives them the threat of pulling the ball and going deep off play-action, they have some young weapons catching the ball and defensively they are very versatile in how they set up gameplans. I also like the mind-set Mike Vrabel installs in these guys and I was impressed with what OC Arthur Smith did in 2019. If there are two spots that could decide if this group is fighting for a division title or that final playoff berth, it will be their rookie right tackle Isaiah Wilson (Georgia) and recently signed edge rusher Vic Beasley. 14. Cleveland Browns While I don’t see them competing for the AFC North – just because of how loaded the Ravens are – the Browns are pretty clearly the most talented team that is considered to be third in their division. In terms of their group of starting skill-position players at least, they are near the top of the NFL, the O-line to me already just made my top ten ranking with room to move up, if healthy they are at least in the conversation for that with the D-line as well, with a Defensive Player of the Year candidate in Myles Garrett, and I like how they have assembled their secondary. Now, they have some unproven guys at the linebacker level and Cleveland’s potential is largely dependent on which Baker Mayfield we will get. With Kevin Stefanski coming and installing an offense that will be built on the zone run game and bootlegs off that, where his quarterback is put on the move, I could see much more efficient play and more comfort in that system. Something that really jumped out to me on tape was how many times Baker seemed to not be “on the same page” with his receivers, expecting routes to break off differently and unfortunate drops in certain situations. Even though the preparation for the season does look a lot different and QB & WRs haven’t been able to spend too much time together, I expect this to improve and more suitable roles for those pass-catchers overall. And if they are ahead in more games, that pass rush will be a problem. 15. Arizona Cardinals There are certainly still some issues here, but the Cardinals are probably the most exciting young team in all of the NFL. Kyler Murray was a one-man show last season and is due for a big jump, with DeAndre Hopkins being added to a receiving corp that severely lacked dependable weapons, to go with some other youngsters fully healthy, Kenyan Drake looked like a different player once he came over from Miami and the O-line should at least be marginally better. Defensively they transitioned a little up front, with big gap-pluggers on the line and Isaiah Simmons being that ultra-rangy player on the second level, who can run guys down on the edges, if those ball-carriers forced to bounce outside, plus they have maybe the most underappreciated edge rusher over the last four years in Chandler Jones. I don’t think they are very deep in the secondary, but Budda Baker is an absolute baller, Jalen Thompson emerged late last season and I already predicted Byron Murphy would have a breakout second season. With Kliff Kingsbury and Vance Joseph, Arizona has creative play-calling on both sides of the ball and they now have the personnel to execute at the needed level as well. Like I mentioned, I was ready to have the Cardinals at least go toe-to-toe with Seattle for a playoff spot, but the addition of Jamal Adams has shifted the balance again to some degree. And if you just go based off my rankings, two NFC Wildcard spots already go to teams from five to seven. 16. Denver Broncos A team that has been getting a lot of love this offseason is the Broncos. They have pretty much all the pieces that you usually see with those rising squads – a promising second-year quarterback with a lot of weapons surrounding him, a ferocious defensive front and having shown signs late last season. My belief in them has taken a bit of a dump unfortunately since I thought they did well to improve the offensive line, with Garrett Bolles on the left end being the only weak-spot, but now that Ja’Wuan James won’t be available at right tackle for the second straight year (injury last season and now opting out), their duo of OTs is a concern for me. Defensively you have to love what they have in the front seven, with Von Miller and now again Bradley Chubb coming off the edges, Jurrell Casey added to the interior to go with Shelby Harris and Alexander Johnson being an under-the-radar standout at linebacker. I’ve always been a big fan of Justin Simmons, but that second corner spot is still up in the air. I like Vic Fangio and that coaching staff they have put together in Denver, with Pat Shurmur providing a QB-friendly offense, the game’s best O-line coach in Mike Munchak and most of the people that have helped Fangio put out elite defenses at multiple stops before. So the Broncos are still the most dangerous opponent of the Chiefs in the AFC West, but now I’m not sure if they can add some drama over the fourth quarter of the season. 17. Minnesota Vikings At the same time, a team that has been a little overhyped to me this offseason is Minnesota. While I don’t love how the Packers have operated since February, what have the Vikings done to really improve? They traded away the best deep threat in the league last season in Stefon Diggs, stalwarts on the D-line in Everson Griffen and Linval Joseph are now gone, their entire group of corners has combined for less than 1500 career snaps and their offensive coordinator is now in Cleveland. I’m intrigued by the combination of Adam Thielen and Justin Jefferson, who could be pretty interchangeable in their roles and I like their 12 and 21 personnel groupings, but they lack depth at the receiver position. And the defense will be relying on several inexperienced pieces to step in. I mean their three starting corners from last year are off the team now. So I don’t really get how most people all of a sudden put them ahead of the Packers. With that being said, I like the offensive scheme and always thought Gary Kubiak was a huge factor in their success on the ground at least. On defense there are certainly question marks – especially in the secondary – but Minnesota could easily have a top five player at their respective position at all three levels, with Danielle Hunter, Eric Kendricks and Anthony Harris, plus they still have some promising young guys like Ifeadi Odenigbo, Mike Hughes and a deep rookie class. Their only true shade nose Michael Pierce opting out hurts though. 18. New England Patriots This offseason must have been a rollercoaster for Patriots fans. First, Tom Brady leaves and everybody goes crazy. Then people start getting onto the Jarrett Stidham hype train and talk about how good the rest of this team still is. Out of nowhere they sign Cam Newton for the veteran minimum basically and they are back in the conversation for the top teams in the AFC all of sudden. And now, they lead the league in players opting out of the season, with key defensive pieces like Dont’a Hightower and Patrick Chung, to go with a couple of role players on offense at least. So now they are right at the bottom of these fringe playoff teams for me, because purely based on the roster, they are not even in the top 20 league-wide, but they still have maybe the greatest defensive mind in NFL history in Bill Belichick and one of the best offensive play-callers right now in Josh McDaniels. Obviously a lot of this will come down to what version of Cam Newton we will get and even if he is and can stay totally healthy. Not only is New England the most adaptable team in terms of how they can adjust to personnel and how flexible they are with their game-plans, but Cam is a great fit in that offense, where he can spread the field and make decisions based on defenses adjusting. The one area that took the biggest bump – outside of quarterback I’m guessing – is the offensive line, because they lost a legendary position coach in Dante Scarnecchia and their probable starter at right tackle in Marcus Cannon. While the Pats do have some young players, who can replace part of the losses, they were already more in plan for the pieces that left before there was any virus outbreak.
This broad group of seven teams represents all those franchises who will be dancing around .500 mark in the win-loss column. A couple of teams have the potential to win nine or ten games, while others could see those numbers on the wrong side of the column as well. There are obvious question marks in certain areas, even though they might feature top-tier players and/or coaches. 19. Houston Texans It’s kind of tough to put a team here that has won its division the last two years, but I think the Texans are pretty clearly number three in the South now. I love Deshaun Watson and I think he has fairly established himself as a top five quarterback in the NFL, but Bill O’Brien just took away an elite wide receiver in DeAndre Hopkins and replaced him with an injury-prone Brandin Cooks to go with another always banged up Will Fuller and a declining Randall Cobb, to go with a David Johnson in the backfield, who was unrecognizable last season. I think the O-line is improving, but outside of Laremy Tunsil maybe, they don’t have anybody other than Deshaun who is clearly above-average in their role. And defensively they finished in the bottom five in yards allowed and tied with Cincinnati (who picked first overall in the draft) for an NFL-high 6.1 yards allowed per play. Hopefully having J.J. Watt back for a full season should help, I like the selection of Ross Blacklock (TCU) on the inside and there are some talented young corners on this roster, who could be better much in 2020. I would not be surprised if they are that .500 team at heart and their quarterback carried them to a couple of wins that they weren’t supposed to get – which we have seen him do many times before – but it’s more likely to me that they are fighting for one of the two bottom Wildcard spots. 20. Atlanta Falcons Very rarely do you have a team that was among the worst over the first half of the season and among the best over the second half. The Falcons started out 2019 with a 1-7 record, but would go on to win six of the final eight games. Their defense was absolutely atrocious early on last season, with no pass-rush impacting the opposing quarterback and several miscues in coverage. With Raheem Morris taking over the defensive play-calling, they showed a lot of improvement already and there are signs that trend will continue. While there are some questions about the back-end and if they can get consistent production from their rush outside the top two guys, I think Dante Fowler is an upgrade over Vic Beasley, I like Marlon Davidson (Auburn) as a guy with inside-out flexibility on sub-packages and Keanu Neal is back healthy, as that Kam Chancellor-type, who can be that extra defender in the box in their system and punish receivers when catching the ball over the middle or in the flats. Offensively I believe this is still a team that can move the ball – they just have to start doing so earlier in games. While the top NFL receiver duo is in their own division with the guys in Tampa Bay, Julio Jones and Calvin Ridley could easily be that next one. They lost a very productive tight-end in Austin Hooper, but I believe Hayden Hurst can replace at least 80 percent of that production, and while we have no idea what we get from Todd Gurley and his knees at this point, last year the Falcons had one of the least effective per-touch backs in Devonta Freeman. Plus, the O-line should take a step forward with former first-round pick Chris Lindstrom returning from injury. 21. Las Vegas Raiders To me the Raiders are still in transition, not only moving to Las Vegas, but also in terms of roster construction and the culture Jon Gruden and Mike Mayock are trying to establish. Outside of Tyrell Williams, that entire group of receivers was overhauled, they have a lot of young pieces on the defensive line and the secondary, plus they will have at least two new starters on the second level of their defense. By far the biggest thing they have going for them is the offensive line and second-year back Josh Jacobs running behind it. When I did my top ten offensive lines in the NFL a couple of weeks ago, I had the Silver & Black at number five, and Jacobs was already a top 100 player in the league for me, with how physical and elusive a runner as he is. I could easily see the Raiders finish near the top in terms of ground production, and I also like the young guys they brought in around that, with Henry Ruggs III (Alabama) keeping the defense honest with his speed, Bryan Edwards (South Carolina) as a physical receiver, who will get hands after the catch, and Lynn Bowden Jr. (Kentucky) as that chess-piece potentially, that you can use in a multitude of way. My bigger question here is if Derek Carr is willing to push the ball down the field. Defensively I like the rotation they have on the interior D-line and the two linebackers they brought in via free agency, most notably Corey Littleton. There are still some questions about how snaps will be split between their corner group, but I’m excited to see a full season of Jonathan Abram hopefully. These guys have some attitude and an energetic head coach. 22. Los Angeles Rams Oh, how far we have come. Just one-and-a-half years ago the Rams were officially 20 spots higher basically, when they lost the Super Bowl to New England. Ahead of last season, I predicted them to miss the playoffs and while they made a bit of a run at it late, that’s what ended up happening. Now I see them as the fourth team in their own division – even though that says more about the competition they face rather than them. I still believe in Sean McVay and his ability to win on paper with play-design and game-planning, but Jared Goff has turned out to be an average quarterback, they don’t have a prime Todd Gurley setting the table anymore and the offensive line had some major issues, for large stretches of last season, especially in the run game. I was very high on Cam Akers, who they selected in the second round out of Florida State, but he will obviously be a rookie with shortened preparation, rather than an Offensive Player of the Year like Gurley was for them. Defensively, they have two elite players in Aaron Donald and Jalen Ramsey and I like some of the other guys in their roles, but overall the high-end talent beyond the two biggest names isn’t overly impressive. Leonard Floyd might be their top edge rusher and he has always been more of a Robin, they have no proven commodity as stand-up linebacker and I have yet to see if Brandon Staley can actually be an upgrade over Wade Phillips as their defensive coordinator. 23. Detroit Lions While I was going back and forth with putting the Lions third or fourth in the NFC North, I recently said they are among the top two teams that could go from worst to first in their division and I would not be surprised if they were in the hunt for a Wildcard spot in the last couple of weeks of the season. His second year in a system under Darrell Bevell – where he wasn’t just going in shotgun 40 times a game and asked to make magic happen – Matthew Stafford looked like an MVP candidate as long as he was healthy in 2019. That duo of Kerryon Johnson and my top-ranked running back in the draft D’Andre Swift (Georgia) could be one of the most dynamic ones in the league, the receiving corp is highly underrated and I like those rookies competing for the two guard spots. Defensively, they seem to finally look like what Matt Patricia wanted, when he came over from New England, in terms being versatile with their fronts and having guys who can take on receivers in man-coverage. With that being said, there is also a good chance that the Patricia experiment could go to shambles, if some of the veterans get turned off by his style of coaching without having established that winning culture, and this team has simply been dealing with too many injuries to key players. I don’t think there is much of a gap between the Lions and Vikings for example, but Detroit has not shown the stability of some other organizations. 24. Chicago Bears A franchise that I don’t really hear anybody talk about – unless it’s their quarterback competition – is that team from the Windy City. I understand that the Bears aren’t really sexy because they lack those superstars on offense that people will recognize, but I’m higher on some of the guys they do have on that side of the ball and on defense they could be much closer to 2018, when they led the league in points allowed and turnovers forced, rather than being just inside the top in most categories last season. A guy I already predicted to break out for Chicago this upcoming season with a bigger workload is running back David Montgomery, to go with Anthony Miller as a gadget player and developing young pass-catcher and one of the more underappreciated receivers out there in Allen Robinson. Defensively, I thought the biggest issue last season was Akiem Hicks missing double-digit games, as a table-setter with his ability to disrupt plays from the interior, and Leonard Floyd didn’t provide much on the opposite side of Khalil Mack, who they upgrade from with Robert Quinn, who just had his best season since the Rams were still in St. Louis. Now, I don’t love what they have at that second safety spot to complement Eddie Jackson, someone will have to fill that second corner spot – even though I’m a fan of second-round pick Jaylon Johnson (Utah) – and nose tackle Eddie Goldman opting out is a huge loss. If the quarterback position can just complement the rushing attack and the defense plays up to their potential, this group could be competing for second in the North, but Foles or Trubisky could still hold them back. https://preview.redd.it/aep6uj385di51.png?width=1060&format=png&auto=webp&s=07674898e4de7d73699c065907983e69612c56a4 The final tier is in the comments!! If you enjoyed this breakdown, I would really appreciate if you could visit the original piece - https://halilsrealfootballtalk.com/2020/08/18/ranking-all-32-nfl-teams-in-tiers-pre-season/ You can also listen to my analysis on the Youtube channel - https://www.youtube.com/watch?v=zz7WE0epZw8
Margin is a critical concept for new futures traders to understand. When trading futures, margin is essentially a good-faith deposit required to control a futures contract. Futures margin is the amount of money you must have in your brokerage account to protect both the trader and broker against possible losses on an open trade. It generally represents a much smaller percentage of the contract The advantage of trading on margin is that you can make a high percentage of gains compared to your account balance. For instance, let's assume that you have a $1000 account balance and you are not trading on margin. You initiate a $1000 trade that nets you 100 pips. In a $1000 trade, each pip is worth 10 cents. Trading on margin is a common strategy employed in the financial world; however, it is a risky one. Margin is the money borrowed from a broker to buy or short an asset and allows the trader to pay Margin Level is the ratio between Equity and Used Margin. It is expressed as a percentage (%). For example, if your Equity is $5,000 and the Used Margin is $1,000, the Margin Level is 500%. In previous lessons, we learned: What is Margin Trading? Learn why it’s important to understand how your margin account works. What is Balance? How to use the Margin Percentage Calculator. 1. Select your account currency. 2. Choose the currency pair for which you would like to calculate the margin percentage. 3. Select the margin ratio from the predefined ratios in the drop-down list. 4. Type the amount you would like to calculate, using numbers only. 5.
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