Spotting Trends: The Growth of Fintech

By: ispeculatornew
Date posted: 06.27.2016 (8:35 pm) | Write a Comment

The financial services industry has always tried to embrace new technologies in order to offer additional convenience to customers and operate more efficiently. But in recent years with the rise of cloud-based apps and mobile technology, there has been a new wave of technological innovation that is driving growth and launching promising new businesses in the financial services sector: this is the rise of fintech. The fintech industry has become one of the most exciting industries for investors and technology enthusiasts because the rise of new financial technologies is making it possible for banks and financial firms to offer new levels of convenience, efficiency, cost savings and even the ability to develop entirely new financial products that were never possible before. Fintech startups are finding new ways to process payments, collect donations, and loan money – and they’re doing it with online software and an emphasis on speed, convenience and mobile technology.

Here are a few of the reasons why the fintech industry is worthy of its recent buzz:

The Financial Services Industry is Ripe for Disruption

The financial services sector is often thought of as being a slow-moving, heavily regulated industry that is full of big, entrenched players, making it slow to change. However, the truth is, financial services is one of the industries that is most prepared for disruption by innovative outsiders. According to a survey of Inc. 500 CEOs, financial services was rated #2 of the top five sectors that are ripe for disruption (#1 was health care). The established big banks should not be too smug and complacent – many small companies are looking for new ways to deliver financial services more efficiently and in a way that better serves customers, and customers are starting to notice that there are excellent online tools available to process payments and manage other banking tasks.

Fintech Cuts Costs

A recent article from The Economist found that online lenders (some of the most prominent fintech startups) tend to have a much lower cost structure than traditional banks. For example, online lenders typically have business expenses that are only about 2 percent of their average outstanding loan balance, compared to 5-7 percent for traditional bank lenders. Fintech firms are typically able to reduce costs because they often operate online, without the costs and bureaucracy of a traditional bank’s network of brick-and-mortar branch locations. Lower costs make it possible for online lenders to issue loans more affordably, or serve a broader base of customers who might not have been able to get loans from a traditional bank.

Consumers are Ready for Fintech

People love their smartphones, and mobile apps have quickly become the everyday assistants of billions of people all over the world. People are using their smartphones and mobile devices to research products, shop online, and exchange confidential information about health care, insurance and many other aspects of their personal and financial lives – so why should financial services be any different? Consumers (and small business owners) are more comfortable than ever with online banking, mobile technologies for financial services, and other key trends in the shift to mobile marketing. This presents a huge opportunity to fintech firms.

For example, an article from the Financial Times found that transaction volume at traditional brick-and-mortar bank branches has decreased by one third in the past six years, as consumers are starting to do more of their routine banking business via online and mobile banking. The Adobe 2015 Mobile Consumer report found that 75 percent of Millennials and Gen Xers want to do online banking each month, more than 20 percent of Millennials (and 14 percent of Gen Xers) say that they want to apply for banking products online, and more than half of U.S. and U.K. mobile consumers would like to use mobile-only banking services.

The rise of fintech is keeping with several other key trends: the rise of mobile technology, the innovation of online software apps, and the growing appetite of consumers for more online and mobile banking. Anyone who is interested in seeing the latest opportunities for business growth and the evolution of the consumer economy should pay attention to the continuing rise of the fintech sector.

New Trade: Salesforce ($CRM) & Short Zillow ($Z)

By: ispeculatornew
Date posted: 06.21.2016 (3:46 am) | Write a Comment

Today I am opening my 15th trade of the year between between 2 names that have been part of a lot of M&A activity and rumors. Things have been going well so far this year and as is always the case, you can see past 2016 (and previous years) trades here:

Let’s start off by looking at the numbers:

TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg Growth
ZZillow Group Inc34.76N/A73.0745.0297.823.86N/AN/AN/A76.34N/A Inc81.22N/A61.082.6824.074.768.241.310.0830.74N/A

$CRMLong Salesforce ($CRM)

Salesforce is certainly an interesting company to follow. First off, as a SAAS company, traditional ratios such as price/earnings and even profitability numbers are not as useful. Why? Because Salesforce has a very significant portion of its cost upfront. There are several good readings that explain this but here is a short summary. If you are able to land a client for $50 of cost of sales, and can expect to make a $20 profit for 5 years, it’s a no-brainer right? It is, but the problem is that the first year, that client will show up as a losing money client. The more clients you land, the bigger the losses. That is until you start having more clients in those later years which bring in enough profits to compensate. All of that being said, I do think CRM trades at a higher valuation than I’d like but I think it is a good play in this context. It does have significant risk of being acquired, is a leader in its field and when compared to Zillow, I do feel like it’s valuation is attractive.




Next earnings: August 17th 2016

$ZShort Zillow (Z)

Zillow is an interesting company and certainly has has a nice run in the past few weeks/months but it does have its fair share of haters as well including well known short seller Citron research. The company continues to grow at a very steady rate and has a nice niche. In some ways, I don’t love the idea of shorting Z but I do think its valuation is rich right now and that the risk vs. reward on this trade is worth it.


Next earnings: August 2nd 2016

Disclaimer: This trade on CRM-Z will be done on today’s opening,

New Trade: Paypal ($PYPL) & Short IAC Interactive ($IAC)

By: ispeculatornew
Date posted: 06.14.2016 (3:00 am) | Write a Comment

Today I am opening my 14th trade of the year between between 2 of the older players on my list. Things have been going well so far this year and as is always the case, you can see past 2016 (and previous years) trades here:

Let’s start off by looking at the numbers:

TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaEarningsMkt CapRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg Growth
IACIAC/InterActiveCorp53.3159.9312.83- $4,313,765,104.09 38.9513.047.02
PYPLPayPal Holdings Inc36.5433.420.861.5715.244.0611.26N/A7/27/2016 $44,566,220,398.51 7.57N/AN/A

Paypal is fairly new as a separate company but still worth looking at my usual chart:



Long Paypal (PYPL)

Despite a growing level of competition in the online payments space, Paypal remains the one dominant player thanks mostly to the lock-in/network effects. It also has been the one dominant global player while others such as Amazon (AMZN), Appel (AAPL), and Stripe continue to work on expanding their capabilities. I do still have my doubts about PYPL’s longer term position but it has been making some smart bets in the form of Venmo for example. The biggest argument for buying PYPL today is that relative to its valuation, it remains cheap compared to most of my board. Also, there have been rumors of a possible takeover of Paypal (PYPL) and that is certainly a nice option.




Next earnings: July 27th 2016

Short IAC Interactive (IAC)

In many ways, IAC has been an incredible engine of growth over the past decade. Shareholders have done well on the condition that they kept shares of units that ended up being spun off such as Expedia (EXPE), Tripadvisor (TRIP), Match Group (MTCH) but if you look at the return of the parent company alone, it has not been as impressive and I’m willing to bet that will continue by taking a new short position on it.



Next earnings: July 25th 2016

Disclaimer: This trade on PYPL-IAC will be done on today’s opening,
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Closing 1 Trade ($MTCH, $IAC)

By: ispeculatornew
Date posted: 06.13.2016 (3:00 am) | Write a Comment

Good morning, I hope all of you had a good weekend! This morning, I will be closing a trade done on April 14th when I went long Match Group (MTCH) against IAC Interactive (IAC), two companies that were part of the same entity a few months ago. The trade has gone incredibly well and currently stands at +33%. You can see the details of our 2016 (and previous years) trading at:

You can expect 1-2 new trades this week. That’s it for now!

MTCH_IAC_chart (1)

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Investing Rules for Binary Option Investors

By: ispeculatornew
Date posted: 05.24.2016 (8:23 am) | Write a Comment



Investing in common stocks could sometimes requires lot of time and effort. I recently found a new investing vehicle enabling investors to start with little money and little knowledge; it is called binary options. Banc de Binary is a great resource to understand binary options.

Binary options explained

Binary options are relatively easy to understand. You need to create an account with a broker that will give you access to their investing platform. All options are listed with the expected return if you make a successful trade. You then select an asset and decide if it will go up or down within a defined time frame. The expiry time frame could be a small as 30 seconds and the amount invested could be as small as $1.

Rule #1 know what you trade

Since most binary option expires in a very short time frame, it is crucial to understand what you are trading. Selecting the right type of asset is crucial. You can select assets you understand and know how they will react to events on the stock market. This is the most effective way to invest in binary options. Conducting further research is advised as you don’t want to gamble your money, you would rather invest it.

Rule #2 concentrate on a small basket of assets

If you are trying to trade on everything you can, you will invest, and more likely lose lots of money. Each asset type has their own characteristics and you should rather concentrate on a few of them to thoroughly understand instead of barely know how each asset evolves over time.

Rule #3 plan carefully

Typically, you earn very strong return on your investment while you will lose it all if you are wrong. For example, if you invest $100 in a binary option, you will either complete your trade with $185 in your pocket or $0 if you are wrong. This is why it is important not to invest too much money on a single trade and to know when it is the right time to cash your investment and stop trading. Don’t try to “make up” for a loss trade by taking additional risk on your next one.

One last tip

If you never traded binary options before, a very good idea could be to open a demo account. Most brokers offer you the possibility to open a real account with no money. You can then start making fictitious trades to see how you could be making money with this system. It will allow you get familiar with the platform and how binary option works. You can make your rookie mistakes within the demo platform and get ready for real investments afterwards. By testing your trading aptitudes and strategy, you can see if you could make money in the real world. This is probably the best way to initiate yourself to binary options.

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New Trade: Long TripAdvisor ($TRIP) & Short Yelp ($YELP)

By: ispeculatornew
Date posted: 05.12.2016 (4:02 am) | Write a Comment

Today I am opening my 13th trade of the year between 2 stocks that trade at similar forward P/E ratios. It is the exact same trade that I closed earlier this case which might look strange but that is one reason why I do use stop losses. It gives me the opportunity to revisit my options and I ended up finding that my best trade opportunity was one that I had just closed. As is always the case you can see the existing live trades here:

Let’s start off by looking at the numbers:

TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg Growth
TRIPTripAdvisor Inc65.6764.2229.51-22.4619.743.0710.051.4710.3619.33-6.2
YELPYelp Inc25.31N/A30.64-8.6145.63.479.171.227.3657.8-133.32

This chart certainly looks terrible for TRIP


But this one from Google Trends probably looks worse for YELP:


$TRIPLong Tripadvisor (TRIP)

I have obviously been a big believer in TRIP and in many ways that has been a very painful position as the continues to struggle being down 22% so far this year. There are many different stories about what’s happening and I’ve obviously been paying very close attention as it is one of my 3 bigger tech stock positions (with FB and AAPL). As TRIP continues to roll out its Instant Booking platform, it has gained steam in terms of having major partners sign up but that has been translating into shorter term challenges as it sends business to its own less optimized, less profitable solution rather than getting compensated by the likes of EXPE and PCLN. In the end, TRIP continues to grow its community and is adapting better than competitors to mobile so I do remain very confident in its long term future.

TRIP_YELP_chart (1)

Next earnings: August 4th 2016

yelpShort Yelp (YELP)

In many ways, YELP has been unimpressive in my opinion. When you look at recent trends in revenues and other metrics, you could say that TRIP and YELP are both suffering but I think the explanations and overall strategy of TRIP makes a lot more sense. YELP is an extremely competitive space facing the likes of Priceline’s (PCLN) Open Table, AngieList, Google with other major players like Facebook and Amazon looking to also compete in the local listings space. YELP has struggled to adapt to mobile and in a world that is increasingly going mobile only, that is obviously a very problem. I did get burned being short YELP recently and that is a risk with any short position going into earnings season but I do feel confident that it will not happen again with YELP.


Next earnings: July 27th 2016

Disclaimer: This trade on TRIP-YELP will be done on today’s opening. I am currently long TRIP.
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Closing 2 Trades (TRIP, YELP, PYPL, TWTR)

By: ispeculatornew
Date posted: 05.10.2016 (3:41 am) | Write a Comment

$yelpThis morning I will be closing 2 different trades, one that has done extremely well and the other not as well!

#1-From March 7th, I had gone long Tripadvisor (TRIP) vs. Short Yelp (YELP) which currently stands at -33.94% mostly because of YELP shooting up following its most recent earnings.


$PYPL#2-April 1st: Long Paypal (PYPL) vs. Short Twitter (TWTR): I’m probably due for an update on my thoughts on Twitter but it’s safe to say that in the past few months, being short has generally led to good trades


As is always the case, you can see the live trades of this year where the long & short portfolio stands at +10,35% (and past ones) here:

How to Get Better at Trading Binary Options

By: ispeculatornew
Date posted: 04.26.2016 (7:27 am) | Write a Comment

Binary options are a bit deceptive. On the surface, it looks like trading options should be relatively easy. After all, you’ve probably heard all about how binary options can do well in any market. You can also pick from a long list of underlying assets too, which is especially helpful for those who already have a background in investing. Therefore, if you haven’t seen any outstanding results yet from your time trading options, it can be easy to get frustrated. Before you give up, though, consider the following ways of getting better at binary options.

Consider Your Broker and Software

binary options, trading binary options, trading options, getting better at binary options

If your broker isn’t pulling their weight, you’re always going to be suffering from poor results when trading binary options. Due to the unique features of this type of trading, brokers are probably more important to those who invest in binaries than any other type of investor.

Likewise, the software brokers provide their clients will play a huge role in their success (or lack therefore).

As such, if you’re currently trading binary options, but not seeing the returns you had expected, it makes sense that you should take a good, hard look at your broker.

Learn More about Your Market

Still, it might not be fair to blame your broker. It could be that your lackluster track record with trading options is because you don’t actually understand the market you’re focusing on. This means not just having a grasp on the underlying asset you favor, but the market you’re doing your trades in. If you haven’t picked both of these yet, that’s definitely the problem.

However, even if you have picked an underlying asset and market to focus on, it might be time to hold off on trading while you study both of them a bit more.

Trade More

Provided that those first two issues are definitely not the problem, you may be surprised that the solution we recommend is to actually make more trades. After all, practice makes perfect. At the moment, if you’re not regularly trading binary options, it’s definitely going to take you a significant amount of time before you begin posting big profits.

How much trading is enough? That will really depend on your budget and schedule. Again, though, the more you practice, the faster you’ll improve.

Fortunately, you can sign up for practice accounts that allow you to trade like the real thing, but without actually putting up any money.

Manage Your Money Better

Be honest with yourself: are you currently seeing small profits because so much of your returns get mitigated by big losses? If that’s the case, you need to start managing your money better. Lower your monthly budget so you’re forced to make better decisions and can’t keep funding your investing when it’s clear you need to take a breather.

You can get help with this from a spouse or pick a friend to be your accountability partner. Tell them what your monthly budget is and then make sure you follow up with them regularly about your current status.

Until you’re able to manage your finances and stick to a budget, none of these other tips will do much for you. In fact, they may simply contribute to a situation that ends up costing you dearly.

Getting better at binary options is something that could take years. However, the financial rewards are worth it. If you’re currently trading binary options but know you could do better, apply the above advice to your situation and expect results.

For more information:



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Four Power Tips for Making Smart Investments

By: ispeculatornew
Date posted: 04.20.2016 (3:44 pm) | Write a Comment


Investors are in the business of using money to make more money. Investors are not concerned with capital preservation (of course, they don’t want to lose money); rather, investors are more interested in capital multiplication. However, to double, triple, quadruple, or grow your trading capital, you’ll need to step out of the comfort zone of making conservative investments to the not-so-comfortable zone of making speculative investments.


Many people are scared of making speculative investments because they are afraid of taking on risks. However, you can still take on speculative investments without fears if you have diversified the investments in your portfolio. Diversification simply means that you should not put all of your investments eggs in the same basket. This article seeks to explore four simple things every investor could do in order to have a diversified but balanced portfolio.

Variety is the spice of life

To start with, a diversified investment portfolio is a portfolio that has different kinds of investments. If you put all of your money in stocks and the stock market crashes; you’ll lose all of your investment – many people had that experience during the 2008 global financial crisis. Now, gold is the best performing commodity in the market. It has 17% gains in the YTD and many investors are putting all of their money into gold – it is highly risky because they could lose everything if gold crashes.

A diversified portfolio should have a mix of stocks, bonds, real estate, speculative plays, international investments, and cash. In broad terms, you should have a mix of conservative and speculative investments.

Conservative investments include mutual funds, stocks of blue-chip companies, and precious metals among others. Binary options is a good way to start investing in speculative plays that could deliver exponential returns on investments – you should look for a recommended binary options broker. You might also want to learn more about futures and options as other type of speculative plays that promises massive returns.

Asset allocation should take proper planning

In diversifying your investments, you should also figure out a way to determine how much money you should put in your different investments. Asset allocation is the concept that ensures that your portfolio is weighed and balanced with different kind of investments. You’ll find many rules about asset allocation – some experts will suggest that you subtract your age from 100 and put the remaining percentage in stocks and bonds.

One of the commonest asset allocation rules you’ll find in the market will suggest that you invest between 25% and 50% of your money in stocks, 5% in bonds, 10% in REITSs, 10% in real estate, and the rest in other speculative plays.

However, I think asset allocation should basically be between allocating money between speculative investments and conservative investments.  I suggest that that you should subtract your age from 100 – put your age in conservative assets and put the rest in speculative assets. You can also check Finpari Broker Review to get started on speculative trades and investments

Diversify within the same category

Smart investors diversify their investments between different assets class and they go further to diversify the investment within the same asset class. It is good to diversify between stocks, bonds, binary options, precious metals, mutual funds, and real estate among others. However, you should also endeavor to diversify within the same asset.

For instance, while buying stocks, you should buy a mix of tech stocks, bluechips, financials, industrials, and healthcares stocks among others – of course, you should understand the business of the underlying company before you buy the stock. However, if you don’t have deep pockets, diversifying within the same category could cost you a lot of money in the form of transaction costs & fees.

However, you might want to consider “index” funds, EFTS, and mutual funds as a means to diversify within an asset class. Nonetheless, it is important that you conduct extensive due diligence, examine the past performances of a fund, and gather insight into its future performances before you put your money into any fund or before you commit your money to any money manager.

Balance risks with expected returns

The main reason you are being advised to diversify your investments is that diversification spreads out your exposure and it reduces your risk in any single market sector. However, diversification should be a tool for reducing risk but not a tool for locking yourself in an investment prison. There’s no point in putting all of your money in conservative investments without making speculative plays.

One of the mistakes that investors make is that they forget that the risks and rewards are blood brothers – low risk investments yield low rewards, medium-risk investments bring medium rewards, and high-risk investments often deliver high rewards. When diversifying your portfolio, pay attention to how much risk you are willing to take and buy up investment vehicles accordingly.


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Should You Lock Your Mortgage?

By: ispeculatornew
Date posted: 04.20.2016 (5:06 am) | Write a Comment

Everyday, there is something to say about the economy. Since the 2008 market crunch everybody has their take on what is going to happen next. It has created a huge point of interest.

At the end of 2015, the FED raised their daily interest rate for the first time since the beginning of the crisis back in 2008. Even though, it was a small increase, it was enough to put several financial journalists and financial analysts in their seats to write some forecasts on their laptops (it’s funny to think that they don’t need to find a financial topic to write about… they are given by the 6pm news 😉 ). Now we are told that we should consider locking in our mortgage rates.

Interest rates don’t rise overnight

I don’t know if it’s because we are overloaded by information, or because the media business model is not very lucrative so they try to become more sensational, but I don’t see how interest rates could suddenly increase by 5%!

In fact, with global economy going sideways, resources prices going up and down each day, the FED eyes all macro-economic data and will proceed with caution. During the latest meeting in March, they decided to keep rates where they are until they see strong sign of economic growth. Therefore, we will more likely see another raise of the short term interest rate by the end of 2016, but don’t expect an important raise by any means.

So should you lock-in your mortgage rate?

We will all have someone around coming back with the stories of the high interest rate period of the 80’s and claim that we could see the prime rate at 7% in no time.

The thing is that you probably won’t pay your mortgage off over the next 5 years (if you will, then perhaps it’s a different game). And over the life of your mortgage (25 to 30 years), it has always been advantageous financially to keep a variable mortgage rate, (provided you can still sleep at night!)

You can probably lock in your fixed rate home loan rate for 5 years at 4.00% right now. However, if you stay with a variable rate, you are paying between 2.25 and 2.75%. So, worst case scenario: you are still paying 1.25% less than a 5 year fixed mortgage rate.

Therefore, if you are about to lock your mortgage rate at 4.00%, I have a prudent suggestion for you:

Calculate your payment at 4% and make this payment on your variable rate mortgage (that is currently much lower). You will then create a buffer and pay off your mortgage faster. You will protect yourself from a rate increase while benefiting from the lowest rate on the market.

Finally, the best move you can do is always the one that will make you sleep well at night. If you keep your variable rate and can’t stop worry about it, maybe you should consider to lock in your rate.


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