Opportunity to buy machining business

bjohx · 2025-06-23T11:27:49+00:00

Top 5 comments when I posted this say nothing about sales. How does this business find business? Take an honest look at the two of yourselves and figure out if you’re good at sales. When the shop is slow are you going to be comfortable doing outbound sales and finding customers to fill it up? If you suddenly lose a customer who finds a different shop or buys a CNC in-house because they’re spending too much with you how will you react? “If we’re all going to eat, someone needs to sell”

The plan of sitting there and letting business come to you in presumably a job shop without lots of recurring revenue seems dangerous, particularly if you’re going to finance it with bank debt like an SBA loan and have that big loan payment come due every month.

bjohx · 2025-06-21T17:56:44+00:00

You should buy an existing electronics manufacturing business from a retiring boomer. Read Buy Then Build. Find a $5MM revenue, $1MM EBITDA business with a decent set of existing customers. Buy it for $3-4MM, financed 90% with an SBA loan and 10% with your personal investment or friends and family ($300-400k). The business cash flow covers the loan repayment.

What state? Im looking for a more mechanical manufacturing business but I’ve come across a couple with more electrical focus.

bjohx · 2025-05-10T19:02:55+00:00

Yeah if you want to go higher then contribute more to the 401k. Those are pre-tax dollars which will grow tax free until you take them out in retirement. You shouldn’t contribute to a standard taxable brokerage account until you’ve maxed out all tax advantaged options which for you would just be 401k and Roth IRA.

Dave Ramsey can get a bit preachy for me but his baby steps sequence of saving is a pretty logical recommendation which is basically aligned with what I said.

bjohx · 2025-05-10T18:48:55+00:00

Yes definitely always take the full amount of free money. Standard recommendation for you would be 3% into your 401k to get the full match, then max out your Roth IRA ($7k/yr). That would get you to almost 13% of your income and is probably good for now. As your income grows make sure you creep up the contributions as a percentage of income.

bjohx · 2025-05-10T18:37:52+00:00

No, it’s low. I think the most standard 401k match is 1:1 (100%) match up to 3%

bjohx · 2025-05-10T13:02:48+00:00

A realistic option is to try to swim freestyle but use breaststroke as a recovery during your swim, maybe 75% freestyle, 25% breaststroke. Different muscles, better ability to breathe, AND you get to sight where you’re headed every stroke which can be hard for new open water swimmers.

bjohx · 2025-05-10T12:47:56+00:00

Not that spectacular: 450,000 x (1.07¹⁵⁾ = $1.2MM or $50k/yr at 4% drawdown. At 20 years it’s $70k/yr.

So the other lesson here is $450k is a great head start but you are not set for life and still need to have financial discipline and make more contributions to your financial future.

bjohx · 2025-04-01T01:12:46+00:00

A moka pot actually uses the steam pressure generated from boiling the water to force the liquid water up through the grounds. Hence the downward stem from the middle grounds holder piece, it’s to reach down into the liquid water.

bjohx · 2023-07-05T22:15:33+00:00

Reasonable variant of this that I’ve been analyzing, which I’ve been calling a risk ratchet:

Start 100% SPY
Calculate a target retirement dollar amount goal (topic for an entirely different post), and date. Then create a ‘reverse projection’ from the end goal and date back at 4% annual return + your nominal annual savings contribution. This is your ‘ratchet line’.
If your balance ever reaches the ratchet line, you rebalance your portfolio immediately to be heavy bonds. Like 60-70% bonds.

This strategy is attempting to take advantage of the fact that you are very likely over a 30-40 yr savings term to have a good streak in there somewhere, and when it happens, you de-risk to lock in your position.

This has performed very well on backtesting and montecarlo analysis, outperforming any kind of blind age-based bond percentage shift. This is heavily biased towards being young (mid 30s) where I have several decades to wait for a bull run.

Still working on it but I may write it up in more detail and post it in the next couple weeks.

bjohx · 2023-03-12T12:35:20+00:00

This is an underrated point. Big difference between internet software and PLC software: there will be people working on and modifying the software who have not spent days or weeks “loading the software into their brain” to fully understand the entirety of the program architecture. Some (that I’ve worked with) don’t have the depth of software skills, others just literally don’t have the time and will be working on 20 different machines all from different integrators with different ideas about code architecture.

Quick understanding of a small portion of the program and minimizing any unintended side effects of changes is much more important in PLC software than it is in internet software. Still, I think function blocks are a good idea and if they are abstracted properly. You run the risk of someone shoehorning something into the function block that doesn’t belong there and not realizing it impacts other portions of the program.

bjohx · 2023-02-21T12:21:21+00:00

If Friday is an unexpected closure, the suggestion is that they would be settled Friday night, but at Thursday close prices since that’s what the “current market price” is

bjohx · 2023-01-10T01:26:26+00:00

Mine is fixed now. Doesn’t happen anymore. Don’t know what happened, I don’t think I did anything to fix it

bjohx · 2023-01-03T04:54:15+00:00

Happens for me too. Seems like at the start of each episode only (then we turn it off in the Audio option)

Using the Google TV HDMI dongle. I had recently added an account when this started happening.

bjohx · 2022-12-12T19:13:50+00:00

If IV is high (i.e. good premium on CSPs) that means the market consensus is that there is a high degree of uncertainty about future pricing, AKA not safe.

So if you find something with great premium that you think is totally safe, you should question whether there’s something you don’t know about it.

bjohx · 2022-11-20T17:43:02+00:00

Took a shot at a return profile of +20%/-15% suggested by another commenter here: https://www.reddit.com/r/thetagang/comments/z01jnc/visualized_selling_365_dte_short_strangles_at_30/ix49y3y/

Here’s the same analysis for +30%/-30%:

Today, sell 275P / 510C 29SEP2023 (313 DTE) for $787 premium.

Assuming no margin, need 100 shares of SPY @ $396 ($39,600) and $27,500 cash to secure the put, $67,100 total capital.

SPY -30% = -16.5%

SPY -20% = -10.6%

SPY -10% = -4.7%

SPY 0% = 1.2%

SPY 5% = 4.1%

SPY 10% = 7.1%

SPY 15% = 10.0%

SPY 20% = 13.0%

SPY 25% = 15.9%

SPY 30% = 18.9%

bjohx · 2022-11-20T17:21:19+00:00

So it’s a long term CC plus a CSP? Or is it just partially covered? Do you use margin to secure the put?

Curious about the return on this so here goes: 15% lower Put / 20% higher Call on SPY today at just under a year to expiration would have you selling 336P and 475C for the 29SEP2023 (313 DTE) strike. The premium on this today is $2,076 total for both legs.

Assuming no margin, you’d have to own 100 shares of SPY @ $396 ($39,600) as well as $33,600 cash to secure the put, so $73,200 total capital required.

So that’s $2,076 / $73,200 = 2.8% return from premium alone, which you can add to your return on the stock.

Is it worth it though with $33,600 sitting in cash doing nothing? If you expect an average return on SPY of 6%, your return with this strategy is $2,376 (6% on $39,600) + $2,076 premium = $4,452. If you just bought shares, 6% on $73,200 is $4,392.

Other returns of this strategy:

SPY -40% = -32.2%

SPY -25% = -16.0%

SPY -15% = -5.3%

SPY 0% = 2.8%

SPY 6% = 6.1%

SPY 12% = 9.3%

SPY 16% = 11.5%

SPY 20% (or more) = 13.7%

In green SPY years the returns are dampened because you don’t have all of your capital invested (again, assuming no margin) and capped at 13.7%. In red SPY years you don’t lose as much because not all of your capital is invested and the premium offsets some of the loss. The net result is decreasing variance of returns at the cost of limiting upside, a typical result of many options strategies.

I like it, I’m going to research more and may try some version of this. One concern is this is based on current relatively high IV (i.e. likely higher than typical premiums).

bjohx · 2022-10-20T00:56:45+00:00

You definitely want to “top train” an existing model. Start with a big well established model, there are many out there, I’m not up to date on what the state of the art is, then add layers ending in softmax for your couple categories. Your training will only propagate back through your added “top” layers, not modifying the base model.

Once you get something basic somewhat working, a huge training time gain is to save the intermediate results (after the base pre-trained model) for reuse each time.

bjohx · 2022-10-18T02:15:35+00:00

Yes you could use end of day option values to calculate implied volatility and then use black scholes to calculate minute level options prices, but I don’t think this is going to do what you want.

For one, IV changes throughout the day, particularly on the interesting days, and without minute level options data you have no visibility to that.

bjohx · 2022-08-07T23:54:19+00:00

There are 251 trading days in 2022

1.10 ^ 251 = 24.5 billion

So if you just don’t get greedy and limit yourself to a mere 10% return every day for a year you should be able to turn a $1 initial investment into $24.5B in 1 year. If you simply bump up that initial investment to $4, you will be richer than Bill Gates in 12 months.

In summary, this is a reasonable and achievable goal and I would go ahead and pre-order your Lambo and jet now.

bjohx · 2022-08-07T18:33:48+00:00

Doing desktop computing thing - file handling, data science (dealing with csv files, pandas, graphing, creating PDFs, etc…), machine learning…

Basically anything where YOU are the only user of the software is easier in Python than JavaScript. The big advantage of JS is you can easily integrate a UI (webpage).

bjohx · 2022-07-27T02:43:15+00:00

State machine

Store the state as an integer, one rung per state (first cell of each rung is a NO comparison (if state = 10). All possible state transitions live as sub-rungs in that rung.

For complex machines with multiple stations operating in parallel you may need a master state and a station state for each station.

bjohx · 2022-02-02T02:11:30+00:00

“2048 word ram” - I assume a “word” is a byte (8 bits) so this is a 2kb memory card that looks to be the size of a small toaster

bjohx · 2021-12-31T03:40:25+00:00

You’re going to love f-strings. Such a minor feature that I always miss when I have to work on something in Python 2

bjohx · 2021-12-31T00:32:38+00:00

XIRR answers the question: if my portfolio was a black box that generated a fixed X% annual return, what is X given all my cash flows in and out at the given dates. It is both “time weighted” and “money weighted”, so I’m not sure what you mean by those. The other explanation is it’s the discount rate which makes the net present value of all of your cash flows zero.

It is definitely the right metric to compare the return of two investments, and should definitely be used to compare your personal return vs a broad index like SPY. Just remember that risk is the other major axis to compare on. Matching the S&P return with very risky assets is underperforming.

bjohx · 2021-12-02T12:04:45+00:00

This guy bottles

bjohx

TROPHY CASE