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Profits From Hurricane Matthew (Investing)

Profits From Hurricane Matthew (Investing)

Profits From Hurricane Matthew (Investing)

Trust Wall Street to come up with a way to make money off hurricanes.

Weather derivatives have been around for decades, but futures contracts related to hurricanes are fairly new. The Chicago-based CME Group, which manages the world’s largest commodities markets, came up with a hurricane index after the epic hurricane season of 2005 – the year of Hurricane Katrina – caused an estimated $79-billion (U.S.) in damages.

The index, known as CHI, uses data from the U.S. National Hurricane Center to gauge a storm’s potential damage. It differs from the commonly-used Saffir-Simpson scale, which ranks hurricanes from 1 to 5 based on wind speed. (Hurricane Sandy is a Category 1 hurricane.)

Today there are three basic types of hurricane contracts; “events,” “seasonal” and “maximum.” Contracts based on “events” are tied to the total number of hurricanes during a season. “Seasonal” contracts are based on the total CHI points from all hurricanes in a season and “maximum” contracts are tied to the highest CHI achieved.

Here’s how a typical trade might work. A company seeking protection against a severe hurricane might buy a “maximum” contract corresponding to a CHI point range that would cause damage to the company’s finances. If a hurricane at that level occurs, the company receives $10,000 for each CHI contract purchased. If the hurricane doesn’t hit that level, the company gets nothing and the investor who sold the contract keeps the premium.

Profits From Hurricane Matthew (Investing)

The market for these contracts is relatively small, but it has been growing in recent years as hedge funds and other investors look for alternatives to the stock market.

“There’s tons and tons of ways to [trade] it,” said Jeff Hodgson of Chicago Weather Brokerage LLC. Mr. Hodgson, who doesn’t actively trade hurricane futures, said one example of a possible trade would be an investor who takes a long position on gasoline futures and goes short on hurricanes by selling a contract – meaning the investor is betting a hurricane won’t happen. If a hurricane does happen at the CHI scale specified, the trader loses on that trade but makes money on the gasoline trade, since gas prices typically go up after storms as refineries are damaged and supplies cut.

“Right now [Hurricane Sandy] is a big event,” said Mr. Hodgson. “It’s not good for people in general, but for the hurricane market this is actually good because this is what drives people in [to the market].”


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Nate Parker Talks Making (And Selling) 'The Birth Of A Nation' At The L.A. Film Festival

Nate Parker Talks Making (And Selling) ‘The Birth Of A Nation’ At The L.A. Film Festival

Nate Parker Talks Making (And Selling) ‘The Birth Of A Nation’ At The L.A. Film Festival

The Birth of a Nation – not the 1915 pro-Klan silent film, but a 2016 movie about the 1831 Nat Turner slave revolt that aims to flip the script on its predecessor – was sold to Fox Searchlight at Sundance in the biggest deal ever made there: in a $17.5 million deal, the movie has already more than made its $10 million budget back before even seeing release. And yet, director-star Nate Parker, accompanied by actresses Aja Naomi King and Gabrielle Union, told a packed auditorium last night at the Los Angeles Film Festival, that was not the biggest offer. “For the first time in my life, studios were pitching to me,” he recalls, and he had a “list of wants.” An awards push was not his priority; rather, he wanted a distributor that would be on board with making an edited version available to schools as part of a curriculum to teach younger kids about Nat Turner’s slave revolt – something he himself never heard of till he took African-American studies. “I didn’t have a hero outside of those who bounced balls and caught balls,” he said, but Turner assumed that role in short order, and for six years, Parker has worked to bring his story to the big screen. In order to ensure that today’s kids actually see the movie, his deal also includes an “Inspired by…” music CD featuring many major contemporary artists, whom he won’t name yet. Parker’s pro-tip for meeting with investors? “Never let anyone you’re taking money from pay for anything.” If you fly out to meet them and do lunch on your own dime, he points out, they are more likely to feel that they owe you something.

As an actor, Parker says he was tired of getting offered roles as “Gangbanger #1,” and so he set out to make a film “about freedom.” After doing his initial research, he realized he had to direct, saying of the process, “I knew no matter what I do, I wouldn’t have to go through the toils he did.” Finally shot in 27 10-hour days, the film is designed to look unlike any other movie about slavery you’ve ever seen. In fact, he never wanted audiences to feel like they were watching a “slave movie,” noting, “It’s a war movie, not an endurance movie.” Added King, who plays Nat’s wife Cherry, “We were enslaved, not born into slavery. There were people who fought that. [Audiences] need to know that. They need to feel it.”

In the first clip shown as part of Parker’s presentation, we got to see how Nat and Cherry first meet. As master Sam Turner (Armie Hammer) and Nat head into town on their wagon, they pass by several street vendors, hawking fresh sweetcorn, brooms…and black people. One vedor is trying to sell a slave who has only one arm, and is forced to deeply discount him, but he follows that auction up with Cherry, “A comely wench, not a day over 18.” Nat notices that the top bidder for her has his hand down his pants, making his future intentions quite clear; to save her from this fate, Nat persuades Sam to buy her as a gift for his wife. At the last minute, Sam offers a bid of $275, and once they have Cherry home, he asks Nat to “Have yo mama get her cleaned and fed, and start breaking her in.”

Read More: Forbes


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Real Estate Investing for Beginners: 14 Tips for Success

Real Estate Investing for Beginners: 14 Tips for Success

Are you just starting out?

Sometimes real estate investing for beginners can seem a bit intimidating and it’s easy to get lost in the lights and sounds of all the blogs, books, and television gurus with their slick hair. To help cut through the crap that’s out there I wanted to create a short list of tips you can use as you embark on your journey to find financial freedom through real estate.

No, this isn’t going to teach you everything you need to know. However, I hope this list will help point you in the right direction. It’s not exhaustive by any means, just a brief list of lessons I’ve learned along the way and hope will help propel you toward success. If you are reading this and have a little bit of experience in real estate investing – I’d love for you to share some of your favorite tips in the comments below; but first – here are fourteen tips for beginner real estate investors.

1.) Be Resolved.

Real estate is not something to do on a whim. Investing in real estate is a life long pursuit to take control of your financial future – not a get-rich quick scheme. As an investor – you will struggle. You will make mistakes. You will fail. The successful investors are the ones who can take those experiences and turn them into lessons to improve their skills.

2.)You Don’t Need to Be an Expert in Real Estate Investing.

Too many individuals talk about investing in real estate but instead just get bogged down with the vast amount of information out there. I once wrote an article for BiggerPockets titled “The Top 100 Ways to Make Money in Real Estate” that chronicled multiple niches, careers, and methods that investors use today to build wealth. Want to know a secret? I only am good at a small handful. People often email me and ask me advice on areas of real estate I know very little about. I try to help as much as possible or at least point them in the right direction, but the simple fact is no one knows it all. You don’t need to be total expert in all things real estate.

3.) You DO Need to Do Your Homework.

On the opposite end of the spectrum are investors who heard about real estate being a great investment and jump in with both feet – unsure of where they are going to land. Sometimes these investors get lucky and make it big (and usually go on to be the next big guru) but the majority of the time these investors fall and fall hard. Don’t be like them. Do your homework. Study the niche you want to invest in and learn everything you can about that subject.

4.) Learn to Love Reading.

You are obviously reading this article, so you apparently know how to read. Do more of this. Check out my list of the Seven Must Read Books for Real Estate Investors and also my follow-up post, “Seven MORE Must Read Books for Real Estate Investors.” If you don’t like reading – at least learn to listen to audio versions. Books have so much information in them and it’s a shame so many individuals are losing their love of books.

5.) As a Beginner, Connect with Local Investors.

This doesn’t mean to spam them with requests – but simply reach out. Begin hanging out where they hang out. Ask them to show you some of their properties. Most investors love to show off their accomplishments, so allow them to and pick up on every tidbit of information they can give you. Local investors will have a much better grasp at what works in your community than I or any other online investor will know.

6.) Learn the Lingo.

If you don’t know the lingo – you are going to look like a fool. Plain and simple. Don’t start talking to an investor about how you think his cap rates are the wrong color. You’ll just look stupid and display your ignorance. Be honest if you don’t know something and don’t try to be something you are not.

7.) Get Creative.

One of my favorite lines in one of my favorite books, Rich Dad Poor Dad, says “The poor say ‘I can’t afford it.’ The rich say ‘How can I afford it?” I love this. Lasting wealth is built through creativity. (click here to Tweet this quote!) Practice changing your thought patterns from “I can’t” to “how can I” in every day life. This simple practice will change the way you view conflict in all areas, including your real estate business. My wife likes to throw this on me when I tell her we can’t afford something she wants. She’s a smart gal.

8.) Learn to Sacrifice.

How bad do you want financial freedom? If you want to use real estate to start living the life you’ve always dreamed you are going to have to sacrifice. You may need to forgo a vacation and use the money toward a down payment instead. You may need to move several times in order to build up enough capital to begin investing. You may need to learn how to use a paint brush and do your own work. Investing in real estate is the most rewarding thing I’ve ever done – but it’s not always been easy. There were years of sacrificing (time, money, and opportunities) to get financially free. If you are looking for a get-rich quick scheme – look elsewhere.

9.) Learn (and Trust) Basic Math.

The math involved in a real estate investment is not college calculus. We’re talking fifth grade math and it isn’t difficult to learn. Income minus expenses equals cashflow. A gallon of paint costs $20 but a painter is going to cost $200. That’s the kind of math you need to get good at. Don’t assume anything – but use your math to make sure a deal is solid. Use a basic spreadsheet to analyze a deal or (shameless plug) spend $19 and download the very investment property calculator I use to analyze every single deal I do. Once you understand the math – don’t deviate from it. Trust it. Don’t let your emotions get involved. Real estate is a number’s game and the quickest way to fail is to forget that.

10.) Make a Written Plan.

You wouldn’t take a road trip across the country without a map, so why take your trip through financial freedom without a map? When I first began investing, I actually sat down and created a plan to get from where I was to where I wanted to be. While I didn’t follow the plan exactly (life never follows the ideal) I stuck by the principles which later were expressed in my first eBook “7 Years to 7 Figure Wealth” which you can get by signing up for my weekly newsletter at the top of this page (or below, or on the right. It’s all over. Seriously – if you haven’t read it … why not? It’s free!)

11.) It’s Okay to Start Small.

You don’t need to buy a 24 unit apartment complex right out the gate. Perhaps your first investment will be your first home. Perhaps you’ll start with just a 50/50 partnership on a small flip. This is okay. It’s easy to get over impressed by the big deals that the internet gurus talk about but even they had to start somewhere.

12.) Treat Your Business as a Business.

Real estate is a business, so treat it that way. Keep it organized, build systems to manage your life, and seek to improve your efficiency. The reason so many landlords get burned out and hate the role is because they treat it as either a hobby or a job. It’s neither. You are a business owner and as such it is your job to manage the business to the standard which suits you best.

13.) Start with Good Bookkeeping Now.

This was a huge mistake for me. When I first began, the paperwork was just a small blip on my radar and as a result my bookwork – to this day – is a giant mess. I’m slowly untangling the mess and creating a system that works but had I started with a system I would ave significantly less stress (especially around tax time.) Meet with an accountant as well as a lawyer after your first purchase and begin plotting your bookkeeping, taxes, and legal holding status. Your future self will thank me.

14.) Don’t Quit Your Day Job.

Investing has two faces: the career side and the investment side. It doesn’t need to be both. I use real estate as both currently, but I honestly believe that if there were a career I liked better I would do that in just focus on the investing side. Let me explain – flipping houses is part of the “career side,” as is “wholesaling” and managing. However, by buying cashflowing properties, reinvesting that cashflow into bigger and better real estate, and setting up systems to manage that business, you are creating investments for your future. There is a principle I believe strongly in called “The Minimum Wage Millionaire” which states that anyone, regardless of their salary, can become financially free if they invest smart and plan. If your ideal job is the “career side” of real estate- then make that your job and your investment. However, if you ideal job is teaching gym at a local high school – do that and invest on the side. Find whatever job makes you the happiest and do that but use real estate as your investment vehicle to gain financial freedom.

Today’s Episode was Brought To You By the Letter “C”

The letter “c” was broke on my keyboard and I still managed to type up these 1600+ words. Every time I pressed “c” I had to press it like five times. I probably have quite a few words like “I like ookies better than andy” throughout this post.

I bet you, with a wonderfully working keyboard, can do a lot better 🙂 If you’d be so kind, please leave me a comment below: what is one tip that you got the most out of OR what is one tip you want to share with others?

Photo Credit: Alessandro S. Alba

P.S. Looking for more real estate investing knowledge? If you are interested in a top-notch course to help you understand the nuts and bolts of creative real estate investing, I would like to recommend Ben Leybovich’s Cash Flow Freedom University. Ben is a close friend and has been my trusted adviser for years. He’s a smart guy and CFFU is pretty awesome. The course is waitlisted, but while you wait for an opening Ben will send you tons of FREE content. Seriously. Click here to check it out.

(yes, that’s an affiliate link!)

Source: realestateinyourtwenties.com


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Kobe Bryant’s Investment Advice To Retired NBA Players | CNBC

Five-time NBA champion Kobe Bryant and his co-founder Jeff Stibel, former CEO of Web.com, discuss their new venture capital fund, Bryant Stibel.


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Find the Value Add – Real Estate Investing with Grant Cardone

Find the Value Add – Real Estate Investing with Grant Cardone


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The 3 Most Important Rules of Investing

Today’s book of the day is “A Few Lessons for Investors and Managers From Warren Buffett” by Peter Bevelin.


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