Short Term Investing

[gjm112]

I've made a few grand playing cards and sports betting. Now I want to invest it in some sort of investment. What are good short term low risk investments?

[GeorgeF]

Vanguard short term bond or Inflation protected. Pimco total return. Or just a regular bank account.

With the US$ falling consider a foreign currency bank account at www.everbank.com. (http://www.everbank.com.)

[NLSoldier]

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I've made a few grand playing cards and sports betting. Now I want to invest it in some sort of investment. What are good short term low risk investments?

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LOL, i was going to post this exact same question. But i think i am more interested in like some medium to high risk, short term stocks...does that make any sense?

[moondogg]

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I've made a few grand playing cards and sports betting. Now I want to invest it in some sort of investment. What are good short term low risk investments?

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If you are looking to make money investing in the short term, you are gambling. Craps and blackjack is more fun, and it generally has a small house edge (i.e. commission) than short term investments.

IMHO.

[NLSoldier]

Hmm this is kinda depressing to hear. Thanks for the info though.

[drewjustdrew]

He mentioned low risk.

If you want low risk obviously you aren't going to get much return. I have a savings account at geinterestplus.com. If you have over 20000 in it you get 2%. Less than that balance and I think you get 1.75%.

otherwise, cds get similar rates, but mine has checking

[AceHigh]

How about NFI? Pays a 13% div right now and is a growing company.

[DesertCat]

NFI is high risk. Some people I know and respect have done very well with it and feel they understand it well. But I'm not as smart as they and can't feel comfortble, so I've stayed out. I wouldn't recommend it to anyone who can't read and understand it's quarterly filings, business model and business risks.

[AceHigh]

I don't think it's high risk, it's dividend has been very stable. It's price varies greatly, buy when the yield is high. REITs are much safer as far as fraud, than other companies because they pay out so much of there earnings in dividends. It's very difficult to lie about earnings when you have to pay out 90% of your earnings at the end of the year.

[adios]

[ QUOTE ]
NFI is high risk. Some people I know and respect have done very well with it and feel they understand it well. But I'm not as smart as they and can't feel comfortble, so I've stayed out. I wouldn't recommend it to anyone who can't read and understand it's quarterly filings, business model and business risks.

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That problem of understanding their business model and quarterly earnings is easily solved:

NFI Investors Site (http://www.nfi-info.net/)

Chock full of info in NFI earnings and business model.

[DesertCat]

Herb Greenberg (http://www.google.com/search?hl=en&lr=&c2coff=1&prev=/search%3Fq%3Dnfi%26hl%3Den%26lr%3D%26c2coff%3D1&q= stocks:NFI+)

Here's a quote from a Herb Greenberg article (above). "Donn Vickrey of Camelback Research, which has published at least three reports totaling more than 60 pages critical of Novastar, takes it one step further: He believes Novastar manages earnings in a variety of way to "hide economic losses."
Here's a second article by Greenberg that discusses why some people think NFI's earnings are of very poor quality and run the risk of a major collapse.
Greenberg 2 (http://www.google.com/search?hl=en&lr=&c2coff=1&prev=/search%3Fq%3Dnfi%26hl%3Den%26lr%3D%26c2coff%3D1&q= stocks:NFI+)

Greenberg's had a hard-on for NFI ever since he was at the street.com. He also appears to get most of his stories from short sellers. Personally, I think he's full of crap. As I said some very diligent analyists I respect believe in the NFI story and are investors. But if you haven't read their filings and understand their business you should NOT own it, period.

Specifically you must be comfortable that in a rising interest rate environment NFI won't implode. So that's why I have trouble recommending it to others. And pointing people to the NFI web site is akin to asking a car salesman if you should buy a car. Sure NFI shareholders should read the site along with Greenberg's articles and the SEC filings before making up their mind. I read all that, and despite my feeling that Greenberg was full of BS, I could never get comfortable in how they securitize their loans and whether that income would actually still be there in the future.

[AceHigh]

Greenberg's a shill.

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He believes Novastar manages earnings in a variety of way to "hide economic losses."

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This is a typical Greenberg quote, it sounds bad but it is very short on specifics. The thing with REIT's is they are paying out there declared earnings, so if they declare earnings that don't exist, they will have a very hard time paying them out.

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I could never get comfortable in how they securitize their loans

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People often say stuff like this, and I don't understand there logic. Would you not buy intel because you don't understand how they make there computer chips?

The big questions with NFI are do you expect the sale of existing and new homes to continue to be strong? And do you think mortgage rates will stay below, say 9%?

[adios]

FWIW at the link I posted thay respond to Greenberg criticisms. The general consensus was that Greenberg was shilling for David Rocker, a hedge fund director who specializes in short selling, owned 10% of the street.com where Greenburg worked when Greenberg started trashing NFI and had a huge short position in NFI. Greenberg has moved on to CBS MarketWatch and has been negative on the stock but it doesn't seem as much.

I'm not touting NFI, I first recommended at between $12-13 a share. I've side stepped land mines so I've been lucky. The key to understanding the business model is that NFI securitizes mortgages and retains Interest Only MBS for the most part from the CMOs that they do. They sell most of the bonds from the CMOs. Interest Only MBS appreciates in a rising interest rate environment. Their portfolio of MBS drives their taxable earnings and thus their dividends. They key for them is growing this portfolio which they will do as long as they can add to the portfolio at a faster rate than their MBS prepays. BTW I believe the 10 year has a lower yield than at the start of 2004. I believe mortgages rates have actually declined as well.

All of this is explained on the web site if interested.

[maroondude]

Depending on your risk profile you may want to trade FX or futures/options. By this I mean can you losse this money and still eat and sleep at night. I am a registered broker/dealer and would be glad to talk to you about this if you want.