Porsche Finance Options
Discussion
sidicks said:
JEBLondon said:
Nothing is guaranteed but most professional money managers (from conservative long funds to exotic hedge funds) would shoot themselves without at least a double digit return this year.
With long Gilts at under 4.5%, I doubt that any 'conservative' fixed income manager would have a benchmark of more than Gilts + 200bps
Hedge funds would have a target return of maybe 10%-15% over a 3-5 year period, not 1-year.....and these funds are often subject to significant drawdown from year to year, hence capital is most definitely at risk!
Sidicks
Ok, replace "most professional money managers" with "I would shoot myself without at least a double digit return this year..."..!!
Gilts + 200bps?? You won't be making much of a bonus with that strategy my friend...
Finance a depreciating asset and invest geared money in an appreciating one! I would rather put 15k down and finance the depreciation on a car on a monthly basis and invest the £60k remainder in a nice buy to let which will be worth much more than a 997 in 20 years time! The risk is that the property could fall in value but give it 20 years-unless there is famine and flood it will have increased at more than 4% and rememember that the money is geared and so its not a 4% retun on £60k but more like a 4% return on £250k (interest should largely be covered by tenants).
JEBLondon said:
Ok, replace "most professional money managers" with "I would shoot myself without at least a double digit return this year..."..!!
Gilts + 200bps?? You won't be making much of a bonus with that strategy my friend...
Gilts + 200bps?? You won't be making much of a bonus with that strategy my friend...
JEB, Are you on Bloomberg? If so, could you PM me so that I have your Bloomberg details...
paracetamol said:
Finance a depreciating asset and invest geared money in an appreciating one! I would rather put 15k down and finance the depreciation on a car on a monthly basis and invest the £60k remainder in a nice buy to let which will be worth much more than a 997 in 20 years time! The risk is that the property could fall in value but give it 20 years-unless there is famine and flood it will have increased at more than 4% and rememember that the money is geared and so its not a 4% retun on £60k but more like a 4% return on £250k (interest should largely be covered by tenants).
But there is a huge mis-match (i.e. risk) between the short-term finance payments and the long-term asset return.
I agree that in the long-term, the property strategy is likely to be a winner, but there is significant short-term risk - property becomes void, rack rent reduces etc etc
To help the OP, we have to compare like with like!
sidicks
Barry_J said:
JEBLondon said:
Ok, replace "most professional money managers" with "I would shoot myself without at least a double digit return this year..."..!!
Gilts + 200bps?? You won't be making much of a bonus with that strategy my friend...
Gilts + 200bps?? You won't be making much of a bonus with that strategy my friend...
JEB, Are you on Bloomberg? If so, could you PM me so that I have your Bloomberg details...
???
JEBLondon said:
Ok, replace "most professional money managers" with "I would shoot myself without at least a double digit return this year..."..!!
Gilts + 200bps?? You won't be making much of a bonus with that strategy my friend...
Gilts + 200bps?? You won't be making much of a bonus with that strategy my friend...
What do you trade and what is the VaR / standard deviation of your returns ?
sidicks
Look JEB is correct, it is not just about return on your cash which you should with a resonable risk profile earn more than 7%, but using your cash to enjoy all those other things in life.
I think getting my Porsche was the best thing i have done and don't regret it at all, but why tie up £60k of my own money in a depreciating asset when i can pay less than the proie of a 5 year old boxter and monthy cash to have the same, and you only have to deal with the balance when trading for the next car (oh GT3 or Turbo???). If you hold your car forever i agree it does not make sense, but how often do people change now days.
I think getting my Porsche was the best thing i have done and don't regret it at all, but why tie up £60k of my own money in a depreciating asset when i can pay less than the proie of a 5 year old boxter and monthy cash to have the same, and you only have to deal with the balance when trading for the next car (oh GT3 or Turbo???). If you hold your car forever i agree it does not make sense, but how often do people change now days.
JEBLondon said:
Barry_J said:
JEBLondon said:
Ok, replace "most professional money managers" with "I would shoot myself without at least a double digit return this year..."..!!
Gilts + 200bps?? You won't be making much of a bonus with that strategy my friend...
Gilts + 200bps?? You won't be making much of a bonus with that strategy my friend...
JEB, Are you on Bloomberg? If so, could you PM me so that I have your Bloomberg details...
???
Doing your job, surely you would know what Bloomberg is?
sidicks said:
JEBLondon said:
Ok, replace "most professional money managers" with "I would shoot myself without at least a double digit return this year..."..!!
Gilts + 200bps?? You won't be making much of a bonus with that strategy my friend...
Gilts + 200bps?? You won't be making much of a bonus with that strategy my friend...
What do you trade and what is the VaR / standard deviation of your returns ?
sidicks
No need to jump down my throat - I just thought your figures were fairly conservative. Seems like our risk profiles are very different. As for me, we run four very specialised/focused (in terms of industry/geography) funds that not only invest in quoted instruments but also in unquoted opportunities. We're small, private and to date doing ok for ourselves.
As for sending out my contact details and returns over a Porsche forum...?? Erm... let me think about that for a second..
gubbs997 said:
Look JEB is correct, it is not just about return on your cash which you should with a resonable risk profile earn more than 7%, but using your cash to enjoy all those other things in life.
No economically, he is not correct.
This strategy only makes sense if you can earn RISK FREE more than the cost of the finance. We all know that in practice, in most scenarios, over the longer term, caveat caveat, this will be the case, but i some scenarios it will not, hence economically the argument fails.
As per my original post, the value of having the freedom of the cash to enjoy as you see fit is a strong reason to finance the car, even if economically it isn't perfectly rationale.
Sidicks
sidicks said:
gubbs997 said:
Look JEB is correct, it is not just about return on your cash which you should with a resonable risk profile earn more than 7%, but using your cash to enjoy all those other things in life.
No economically, he is not correct.
This strategy only makes sense if you can earn RISK FREE more than the cost of the finance. We all know that in practice, in most scenarios, over the longer term, caveat caveat, this will be the case, but i some scenarios it will not, hence economically the argument fails.
As per my original post, the value of having the freedom of the cash to enjoy as you see fit is a strong reason to finance the car, even if economically it isn't perfectly rationale.
Sidicks
Of course it only makes sense if you can earn more than the cost of the finance risk free.
Please read my original posts - I simply pointed out that this would've worked this year. Also, as per my original post for most people financing simply makes sense as a 'convenience'.
JEBLondon said:
No need to jump down my throat - I just thought your figures were fairly conservative.
So you can't provide any mean, standard deviation, VaR figures and hence you've no idea what risk you are running on your funds then ?
I suspect that there will be a significant probability of loss in any one year - nothing wrong with that, and as you have indicated, have been successful to date. It doesn't make it risk free, though !
sidicks
sidicks said:
JEBLondon said:
No need to jump down my throat - I just thought your figures were fairly conservative.
So you can't provide any mean, standard deviation, VaR figures and hence you've no idea what risk you are running on your funds then ?
I suspect that there will be a significant probability of loss in any one year - nothing wrong with that, and as you have indicated, have been successful to date. It doesn't make it risk free, though !
sidicks
Again you've misread my post... Of course we have the figures but why in the hell would I post those over a motoring forum??? They are slightly confidential you know...!!
You seem obsessed with risk. Yes it exists in all forms and I accept your absolute argument but as I merely keep pointing out, financial risk can be managed in the same way as health risk for instance. That's why the likes of you and I get paid to invest for other people..!!
JEBLondon said:
Again you've misread my post... Of course we have the figures but why in the hell would I post those over a motoring forum??? They are slightly confidential you know...!!
surley If I wanted to invest with you, I'd need to be given some historic performance data to understand what I was investing in? And given that we don't know who you work for or which funds you run, two or three performance metrics can't be considered as confidential !
JEBLondon said:
You seem obsessed with risk. Yes it exists in all forms and I accept your absolute argument but as I merely keep pointing out, financial risk can be managed in the same way as health risk for instance. That's why the likes of you and I get paid to invest for other people..!!
I'm not obsessed with risk, just need to recognise it exists!!
I get paid to hedge risk through structured derivatives, not to take risk (calculated gambles, albeit based on sound judgement and research?!!). There is a reason that the simple derivative hedging markets like FTSE options etc all assume risk-free roll up of the index........
Sidicks
I'd rather not have that amount of money tied up in a depreciating asset.
If it costs me marginally more to borrow rather than use my capital than so be it. That's a price I am willing to pay to have the liquidity that the capital brings. Also means I can pay for off the cuff expenses such as holidays, new boiler etc etc etc.
That actual cost difference is negligible surely. Say you borrow what £40k the credit charges will come to what 4k'ish based on 6%.
That said it would pay for a decent holiday or new boiler
If it costs me marginally more to borrow rather than use my capital than so be it. That's a price I am willing to pay to have the liquidity that the capital brings. Also means I can pay for off the cuff expenses such as holidays, new boiler etc etc etc.
That actual cost difference is negligible surely. Say you borrow what £40k the credit charges will come to what 4k'ish based on 6%.
That said it would pay for a decent holiday or new boiler
sidicks said:
JEBLondon said:
Again you've misread my post... Of course we have the figures but why in the hell would I post those over a motoring forum??? They are slightly confidential you know...!!
surley If I wanted to invest with you, I'd need to be given some historic performance data to understand what I was investing in? And given that we don't know who you work for or which funds you run, two or three performance metrics can't be considered as confidential !
JEBLondon said:
You seem obsessed with risk. Yes it exists in all forms and I accept your absolute argument but as I merely keep pointing out, financial risk can be managed in the same way as health risk for instance. That's why the likes of you and I get paid to invest for other people..!!
I'm not obsessed with risk, just need to recognise it exists!!
I get paid to hedge risk through structured derivatives, not to take risk (calculated gambles, albeit based on sound judgement and research?!!). There is a reason that the simple derivative hedging markets like FTSE options etc all assume risk-free roll up of the index........
Sidicks
Sounds like we both know what we're talking about and given that we both run nice cars (997C2S) I think we're both quite good at what we do..!
As I previously mentioned we are lucky in terms of running private funds ie. we do not accept additional investors. As such, we are hugely confidential and sharing any information would be a major 'no no' (esp here..!!). Our strategy to date seems to have worked ok but of course you always have major wobbles that can't be foreseen. Risk is everywhere but for guys like us, it's half the fun..!
fieldl said:
I'd rather not have that amount of money tied up in a depreciating asset.
If it costs me marginally more to borrow rather than use my capital than so be it. That's a price I am willing to pay to have the liquidity that the capital brings. Also means I can pay for off the cuff expenses such as holidays, new boiler etc etc etc.
That actual cost difference is negligible surely. Say you borrow what £40k the credit charges will come to what 4k'ish based on 6%.
That said it would pay for a decent holiday or new boiler
If it costs me marginally more to borrow rather than use my capital than so be it. That's a price I am willing to pay to have the liquidity that the capital brings. Also means I can pay for off the cuff expenses such as holidays, new boiler etc etc etc.
That actual cost difference is negligible surely. Say you borrow what £40k the credit charges will come to what 4k'ish based on 6%.
That said it would pay for a decent holiday or new boiler
I agree!
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