The Stock Market, Investments, and Investing Thread
(09-07-2020, 02:47 PM)WombRaider Wrote: I don't understand why anyone tries to time the market. If any one of us could predict a pullback, a crash, etc., then 100,000 Wall Street traders and analysts could also predict it. And they could do it much more accurately than we could, with their state-of-the-art models and software. And yet, they can't predict the market. Overall, index funds consistently outperform actively managed funds.

I say put your money in index funds and don't mess with it. You take a beating every now and then, but in the long run that doesn't matter.

I agree with this, but I would also point out that most investing godfathers stress that you have to be able to sleep well at night. We're all only guessing at what "the long run" means for each of us, and unfortunately, stock market risk can be closely correlated with losing your work-related income (meaning your stocks tank shortly before you discover you need money). Everybody has to take the measure of their own situation.

For me, I'm ahead of my goals and can't figure out how much of this is looming inflation or mass hysteria. I made a ton of money off the downturn earlier this year (in part because I had the shits for three days in Buenos Aires and there was nothing else to do but look for deals) and feel better knowing I might miss another couple of percentage points than I would entering a prolonged downturn with those gains wiped out and no free cash to invest. I continue making my regular allocations of new money at 80/20 but pulled the rest of it back to 50/50 incrementally over the last few weeks.

With that said, I'm talking about reviewing a strategy a couple times a year. That's a different thing from trying to market time daily/weekly or paying an active manager. (Most of the research showing that there's no edge to active management is driven heavily by the costs of active management, rather than the results of the underlying investment.) Three or four hours a season to review my goals and the landscape is worth it to me even if it doesn't outperform, where doing that daily - or worse, paying somebody else to pretend they're thinking about me every day - is just a waste.
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(09-07-2020, 02:47 PM)WombRaider Wrote: I don't understand why anyone tries to time the market. If any one of us could predict a pullback, a crash, etc., then 100,000 Wall Street traders and analysts could also predict it. And they could do it much more accurately than we could, with their state-of-the-art models and software. And yet, they can't predict the market. Overall, index funds consistently outperform actively managed funds.

I say put your money in index funds and don't mess with it. You take a beating every now and then, but in the long run that doesn't matter.

Yeah for sure. I've been putting in a steady amount into index funds for a few years now. In February I did cave in to the stress and sold everything at a good profit. This was when the market was right at the top, Covid was already a thing, and anyone who was paying attention could realise that it wasn't going to stay confined to China, but normieworld hadn't picked up yet. So I was flush with all this cash as everything was collapsing and others were selling at a loss, so I was feeling pretty good.

But of course as we saw the market recovered very quickly. Personally I've just been averaging my way back in, not in a particular hurry to buy everything back right away. But if I had just stayed put, my current standing would have been only marginally worse. The only way I would have profited from this hugely (in the short term...) is if I had re-invested everything by mid-March. Who would have thought of that beforehand? If anyone did I congratulate them. But tomorrow everything could go to shit again and then you'd have to consider whether to take action again, and you'd never have a sound night's sleep.

This form of investing does not conduct itself to buying and selling very often. Of course everyone knows this in theory, and it's easy to say this when most of your time in the market has been one big boom. But your nerves only get tested in practice by shit like this. So it's been a good experience for me. The trade itself wasn't that bad thanks to the timing of the sell. Better than anyone who sold at a loss because the world was ending and has had to scramble to get back in since then. But nothing worth the worrying. It was just the logical fallacy at work that anyone could warn you about: the idea that "Something is going on in the world, therefore I need to do something, I need to take some kind of action".

There's nothing wrong with re-evaluating occasionally, and selling at a nice profit if you roll that over into some other investment forms. But it seems pretty pointless to just stand there with a pile of cash that can't go anywhere except get ground down by inflation and zero-interest. Unless that pile is already big enough to retire on and live comfortably, but personally I'm nowhere near that, and in any case our tax and social system actively punishes that sort of thing. So I won't sell again just to cash some gains without a plan B.
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I do a little bit of day trading with my taxable account. I'll buy into SPY on green days and UVXY on red days, and keep a close eye on it so I don't lose my ass. I never hold overnight with these considering the current market climate.

For long term investing I have Roth IRA with Schwab and use their robo-investor (Intelligent Portfolios) which is a combination of index funds based on a predetermined level of risk. It actually works out quite nicely and is complimentary if you fund at least $5k.
"I'm not worried if they get pregnant. That is what they are made for. They will figure it out."

-Mister Happy
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It would be difficult for any active mutual funds to beat their benchmark on a consistent basis. Mutual funds are regulated and required to be diversified.

"The Investment Company Act of 1940 limits how much a diversified fund can invest in any single stock. Under the act, out of 75 percent of a mutual fund’s assets, 5 percent or more cannot be invested in a single stock. The fund is also prohibited from acquiring in excess of 10 percent of a single stock’s outstanding voting securities."

Many mutual funds will hold 40 or 50 stocks. They also end up buying a lot of stocks from whichever index they're benchmarked against and they just end up mimicking the return of that benchmark. Except you just end up paying extra fees to the Mutual Fund manager or whatever sales asshole sold you the fund.

To beat the market, you have to take more concentrated positions or take bets with low cost but a possible high return.
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It's not that tough to time the market. When price/earnings ratios get below 10 in strong businesses, when commodities drop to five or ten year lows, when an adverse but temporary event depresses share prices, you can safely bet. You just have to have a horizon of months rather than hours or days.

I'm happy to take a 10 or 20% return in a year.

Everything is now pointing to a plunge in the next months. Sit on that cash
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(09-14-2020, 10:52 AM)OldSojer Wrote: It's not that tough to time the market. When price/earnings ratios get below 10 in strong businesses, when commodities drop to five or ten year lows, when an adverse but temporary event depresses share prices, you can safely bet. You just have to have a horizon of months rather than hours or days.

I'm happy to take a 10 or 20% return in a year.

Everything is now pointing to a plunge in the next months. Sit on that cash

Care to explain why you think it'll plunge?
Looking to get into some tech stocks, but they've been on a crazy run lately.
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(09-16-2020, 02:05 PM)Kentemo Wrote:
(09-14-2020, 10:52 AM)OldSojer Wrote: It's not that tough to time the market.   When price/earnings ratios get below 10 in strong businesses, when commodities drop to five or ten year lows, when an adverse but temporary event depresses share prices, you can safely bet.  You just have to have a horizon of months rather  than hours or days.

I'm happy to take a 10 or 20% return in a year.

Everything is now pointing to a plunge in the next months.  Sit on that cash

Care to explain why you think it'll plunge?
Looking to get into some tech stocks, but they've been on a crazy run lately.

Three things

1.  So many stocks are wildly overvalued relative to revenue.  People buying things like NKLA, TSLA bidding them to insane valuations.  NKLA got savaged, called a fraud by Hindenburg Research and there are still buyers.  You're telling me Tesla is worth more than Toyota?  That Daimler-Benz won't produce quality electric vehicles?  Snowflake IPO yesterday - it's now worth more than GM or Dell, and people don't even know what it does- "data storage?"  Peloton, who are their customers and what's their prospect for growth beyond a small segment of upper-middle class Americans to justify their valuation?

2.  The Federal Reserve can keep pumping money but eventually the cost of coronavirus will catch up with the real economy as we see bankruptcies on Main Street and depressed demand.

3.  The election is looking to be a shitshow.  Whatever your point of view is, it's easy to see that there is a good chance of chaos, violence, and a crisis destabilizing the USA in scary ways.  That would cause a market plunge.  Americans are used to a stable constitutional order

All three factors are operating simultaneously.  The countervailing possibilities are a safe and effective vaccine soon, and a blowout election which leaves no possibility for doubt and dispute the day after on Nov. 4. 

Seems prudent to have a lot in cash or equivalents.
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I think it will be a needle in a hay stack to find a stock that keeps up with bitcoin in the coming the coming year.
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(09-19-2020, 05:52 PM)Prince charming Wrote: I think it will be a needle in a hay stack to find a stock that keeps up with bitcoin in the coming the coming year.

Who knows. Might as well do both.
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(09-19-2020, 05:52 PM)Prince charming Wrote: I think it will be a needle in a hay stack to find a stock that keeps up with bitcoin in the coming the coming year.

Pump and dump.  

Bitcoin is valuable because people buy it because they think it's valuable, because "blockchain," but it doesn't produce any value?

What, it destroys value, as the "mining" consumes as much power as Switzerland and that power consumption keeps growing? 

I'm sure that will go on forever!

[Image: _107727090_bitcoin1.jpg]

Remind me again who I can sue if Bitcoin turns out to be the epic fraud of the century.  Satoshi Nakamoto?
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(09-21-2020, 01:31 PM)OldSojer Wrote:
(09-19-2020, 05:52 PM)Prince charming Wrote: I think it will be a needle in a hay stack to find a stock that keeps up with bitcoin in the coming the coming year.

Pump and dump.  

Bitcoin is valuable because people buy it because they think it's valuable, because "blockchain," but it doesn't produce any value?

What, it destroys value, as the "mining" consumes as much power as Switzerland and that power consumption keeps growing? 

I'm sure that will go on forever!

[Image: _107727090_bitcoin1.jpg]

Remind me again who I can sue if Bitcoin turns out to be the epic fraud of the century.  Satoshi Nakamoto?

Lol stop boomer posting. 

I could put up a similar graph about the cotton wasted on printing USD. 

The utility of bitcoin has been well established. 

Having liquidity which neither the government nor banks can seize, depreciate or lose is value enough.
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(09-21-2020, 03:33 PM)floridaman Wrote:
(09-21-2020, 01:31 PM)OldSojer Wrote:
(09-19-2020, 05:52 PM)Prince charming Wrote: I think it will be a needle in a hay stack to find a stock that keeps up with bitcoin in the coming the coming year.

Pump and dump.  

Bitcoin is valuable because people buy it because they think it's valuable, because "blockchain," but it doesn't produce any value?

What, it destroys value, as the "mining" consumes as much power as Switzerland and that power consumption keeps growing? 

I'm sure that will go on forever!

[Image: _107727090_bitcoin1.jpg]

Remind me again who I can sue if Bitcoin turns out to be the epic fraud of the century.  Satoshi Nakamoto?

Lol stop boomer posting. 

I could put up a similar graph about the cotton wasted on printing USD. 

The utility of bitcoin has been well established. 

Having liquidity which neither the government nor banks can seize, depreciate or lose is value enough.

You believe that?  Try to use Bitcoin for everyday transactions.  It's not liquid.  Governments could shut down Bitcoin in a day.

Maybe they're letting it roll because Bitcoin is the perfect op to crush libertarian autists, for whom it's exquisitely designed to trap.

You can buy it if you wish.   There's a thread on Crypto: I don't intrude to bash Bitcoin and the various shitcoins.

I'm just pointing out there's no underlying value to Bitcoin to others, since we discuss other investments here.

Invest in things which do things, make things, create value, equities in things like AAPL, MSFT, even XOM or PM if you wish.

The boards and management of all those companies are a matter of public record, subject to law.

"Satoshi Nakamoto??"   Big Grin
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Seems like boomers can't wrap their heads around BTC as anything but an investment. It's pretty entertaining.

You can use a bitcoin debit card for daily transactions quite easily. Granted it converts to fiat. But still early days... The trend is more and more companies are accepting btc.

There's no central authority to shut down with bitcoin. Only thing governments could do is outlaw exchanges. Would have zero control over btc people already have on hand. And frankly, chances of every single government worldwide colluding to shutdown crypto exchanges is almost nil. But if it did happen, that would cause the price of bitcoin to skyrocket as with any black market good.
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You can call it an investment or a store of value. Whatever, it's not backed by anything except belief. Would be worthless without exchange interface with the real economy.

According to Coinbase, total market cap of Bitcoin is $192 billion. That's around the total market cap of companies like Coca-Cola, Pepsi, Exxon, Cisco Systems, or Merck Pharmaceutical.

If I buy shares in any of those companies, I am buying a piece of their real estate, intellectual property, distribution networks. They will pay me dividends.

They own things, make things and sell things. Bitcoin does what?

If I buy Bitcoin, it may go up, it may go down. There are no economic fundamentals, assets, sales, or profits its value is anchored on. Only emotion.

Caveat emptor
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I don't know why you keep going on about BTC as an investment.

It's a hedge against the dollar and fiat, much in the same way gold is. The idea is you maintain purchasing power in an age where the dollar is being QE'd into oblivion.

Any speculative waves you can ride on the back of that are just icing on the cake.

JJG is another boomer stuck in this BTC as an investment small box, albeit from a different angle. It's a fucking currency not a stock lol.

You're setting massive expectations for something that's only been around 10 years or so. It's already approaching mass adoption. Give it another 10.
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(09-21-2020, 04:59 PM)floridaman Wrote: It's a hedge against the dollar and fiat, much in the same way gold is. The idea is you maintain purchasing power in an age where the dollar is being QE'd into oblivion.

Exactly, this. You can't compare it to stocks. That argument doesn't make sense.
Makes more sense to compare it to currencies or gold.

And the things that are happening with USD are just scary. Stock markets went up because they keep pumping money in it. Where's the value in that??

Interesting times, that's for sure. And it wouldn't be bad to have at least a little bit of BTC to essentially hedge against the current state of this economy.
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(09-05-2020, 11:19 AM)OldSojer Wrote: Think it's wise to sell stocks now, and buy when fear around the US election is maxing

I want to get away from crypto.  As I expected, stocks are on a downward trend.  Several factors - COVID second wave, political instability in the USA, including the lack of a second CARES Act stimulus.

I am not buying yet.
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When the stock market tanked in March so did BTC and alt coins, everything got destroyed.
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Beginner "buy and forget" investor here. I have a 9-to-5 job now, but at some point I'd like to pivot to something more remote, and Day Trading is an option (risky, I know).

Dunno if this chick has been mentioned here, but I find her agreeable and honest, among a sea of oil snake salesmen (forex trading pseudo-coaches alike).





Her video of "A day in the life of a millenial trader" is good, too. Also, she has one where she trades live with her siblings, lol
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(09-22-2020, 01:59 PM)SC87 Wrote: When the stock market tanked in March so did BTC and alt coins, everything got destroyed.

This year crypto has a lower correlation to the stock market on its way up and highly correlation on market downturns. 

Saw a chart on this phenomenon and will post if I can find again.
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