Cobra Financing

[madmaxx]

I used to be of the mindset, if you cannot pay cash then do not buy it. After the miserable performance in the DJIA and NAsdaq, inflation about to sky rocket, there are worse ways to spend you money then a Cobra. They do retain their value better than other toys. If you can get a good interest rate, go for it, if it dont work out sell it and move on. Life is to short!!

[patrickt]

Originally Posted by madmaxx

I used to be of the mindset, if you cannot pay cash then do not buy it. After the miserable performance in the DJIA and NAsdaq, inflation about to sky rocket, there are worse ways to spend you money then a Cobra. They do retain their value better than other toys. If you can get a good interest rate, go for it, if it dont work out sell it and move on. Life is to short!!

If the goal is to make money, buying a Cobra on credit ain't the way to do it. If the goal is to just have fun with a Cobra while you can, then by all means buy it on credit. Yes, you are pi$$ing money away on interest -- that's absolutely undeniable. But more people than not would probably say that just buying a Cobra with cash is pi$$ing money away. So there is an argument to be made that it really doesn't matter in which direction you pi$$ your money -- it's still pretty much gone regardless.

[madmaxx]

So there is an argument to be made that it really doesn't matter in which direction you pi$$ your money -- it's still pretty much gone regardless

Not necessarily. I am confident if I listed my SPF for sale for $30K I would sell it in hours. If I listed for $40K may take a couple days. If I listed for $50K, maybe a month, for $55K maybe all summer. As you can see a Cobra does retain value. The last one I bought for $28K and sold for $37K in 7 hours. In reality the opportunity cost for my SPF is only $33K. This is based on the fact that the funds that I sold to buy the SPF are worth substantially less today.

Originally Posted by patrickt

If the goal is to make money, buying a Cobra on credit ain't the way to do it. If the goal is to just have fun with a Cobra while you can, then by all means buy it on credit. Yes, you are pi$$ing money away on interest -- that's absolutely undeniable. But more people than not would probably say that just buying a Cobra with cash is pi$$ing money away. So there is an argument to be made that it really doesn't matter in which direction you pi$$ your money -- it's still pretty much gone regardless.

[patrickt]

Originally Posted by madmaxx

In reality the opportunity cost for my SPF is only $33K. This is based on the fact that the funds that I sold to buy the SPF are worth substantially less today.

OK, so I could say that "but for the fact that I bought my ERA, I would have purchased GM Bonds, thus the true cost of my Cobra is next to nothing." You get an A+ for creative thinking....

[madmaxx]

If it was creative thinking I wish I would have known at the time, I would have been better off buying 10 spf cobras a year ago as compared to what the account is now worth.

Originally Posted by patrickt

OK, so I could say that "but for the fact that I bought my ERA, I would have purchased GM Bonds, thus the true cost of my Cobra is next to nothing." You get an A+ for creative thinking....

[patrickt]

Originally Posted by madmaxx

If it was creative thinking I wish I would have known at the time, I would have been better off buying 10 spf cobras a year ago as compared to what the account is now worth.

No, if you had known at the time then you would have called up your broker and said "Bennie, I'm feeling lucky -- everything I got goes in to Put Options." Had you done that, you would now be in a position to invest in a real Cobra.

[madmaxx]

LOL!!!!!!!!! and how true.

Originally Posted by patrickt

No, if you had known at the time then you would have called up your broker and said "Bennie, I'm feeling lucky -- everything I got goes in to Put Options." Had you done that, you would now be in a position to invest in a real Cobra.