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How to Lose Money

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Re: How to Lose Money

#281

Post by stjohnswarts »

imtringued wrote: post #235
jonathanstrange wrote: post #31

This is good advice. I wrote a bunch of novels, got a degree - a Ph.D. in philosophy to make sure I'll never make any money and people who have money wouldn't want to give it to me -, and did some Internet advertising. Not very surprisingly, I'm fairly poor. However, I've still managed to save a little bit of money so maybe I should start trading now.

GME was just done for laughs. A hedgefund lost 53% of its investment in the process. That's the reward you got when you bought GME. If you want to earn money then you should never trade, and always invest. That means putting in your money with the expectation that a specific company or a specific portion of the market is growing. Think of stocks like Apple and Amazon or ETFs that mirror the S&P 500 index. Bitcoin has…

I would venture that a cadre of "senior" WSB redditors were at least partially behind the pump and dump to get the mob going, and then sold when it hit $300+

Re: How to Lose Money

#282

Post by Nursie »

superbcarrot wrote: post #35
ronyfadel wrote: post #19

Earlier quoted context omitted.

Yes and no. A Comp Sci./Eng. degree is pretty much guaranteed to get you a decently paying job. My ROI has been > 20x. Learning a 3-5 yr curriculum on your own is a surefire way to get you demotivated and/or depressed.

> A Comp Sci./Eng. degree is pretty much guaranteed to get you a decently paying job. This has been the case in the recent past and is probably still true right now but the trend won't last forever.

We're already not the rare, coveted unicorns we once were - immigration rules in various countries were stacked in our favour a decade back. Now, much less so.

Re: How to Lose Money

#283

Post by totalZero »

147 wrote: post #166
itsoktocry wrote: post #155

Earlier quoted context omitted.

> There are a million ways to lose, and just a few narrow ways to win. I'm not sure I understand. You can take either side of the trade you want, so if you think you've determined how lopsided it is, why aren't you doing the opposite trade?

An options trade means you have to be right about 3 things: the direction, the timing, and the amount. Even if you get the direction right you might not make money.

> An options trade means you have to be right about 3 things: the direction, the timing, and the amount.

You just have to be more correct about one thing than you are wrong about all the others.

For example, if you buy 10yr calls and term structure blows out as the market sells off, you make way more on vega than you lose on delta.

It's a neat trick when you get the timing, direction, and magnitude correct, but it's not necessary to pull off the hat trick in order to make money.

Re: How to Lose Money

#284

Post by yreg »

itsoktocry wrote: post #159
yreg wrote: post #80

Earlier quoted context omitted.

Year ago when we were reading the news about what is happening in Wuhan, some of my friends bought SPY puts as an insurance against the potential crisis. The best outcome for them would be if those puts expired worthless. When you insure your house, you don't usually wish for it to burn down. I haven't acted and my portfolio took a -30% hit right after. Your suggestion (to change the portfolio allocation) would mean…

> When you insure your house, you don't usually wish for it to burn down. You're leaving crucial information. You don't buy insurance (or puts) at any price. It has to make economic sense, and the person on the other side presumably has the same information.

Of course, being safer (more conservative) brings lower profits. I'm for sure not suggesting to be puts-insured all the time! It is just a useful instrument when one wants to hedge.

The person on the other side is likely a market maker selling both kinds of options. The price is dictated by market.

Re: How to Lose Money

#285

Post by [deleted] »

DC1350 wrote: post #262
IQunder130 wrote: post #252

Earlier quoted context omitted.

You are not even reading the comments you are replying to. When you are immersed in a field for a long time, and master it in and out, there's a good chance you'll be able to find something interesting about it. If you can't, you won't start a new company to solve some problem either.

I read the comment. He’s telling me that people are passionate about things that they’re obviously not passionate about. It feels like gaslighting. When I read job descriptions that tell me I’m supposed to care about some guy’s boring company that does nothing interesting I always thought we were just playing a game where we both pretend I care so everything runs smoother. Am I wrong? I genuinely can’t believe people…

[deleted]

Re: How to Lose Money

#287

Post by Jommi »

DC1350 wrote: post #169

> Do things because you have genuine interest in them... Don’t start out with a singular goal of making money. I really hate advice like this. Have you ever seen a business before? Have you ever met a person? Pretty much no interests are monetizable and almost all companies are doing really boring work. I don’t believe anyone in the world is truly passionate about things like payroll software. If I followed my intere…

This such a sad and American viewpoint.

Re: How to Lose Money

#288

Post by [deleted] »

babesh wrote: post #32
globular-toast wrote: post #28

Earlier quoted context omitted.

Is it common to think the Normans were Vikings? The Normans are the reason why half of the English dictionary consists of French words.

https://en.m.wikipedia.org/wiki/Normans They were a mixed people, partly descended from Vikings. Not only people descended from Vikings invaded England. You had non Viking French in there too.

[deleted]

Re: How to Lose Money

#289

Post by DC1350 »

ljf wrote: post #278
DC1350 wrote: post #169

> Do things because you have genuine interest in them... Don’t start out with a singular goal of making money. I really hate advice like this. Have you ever seen a business before? Have you ever met a person? Pretty much no interests are monetizable and almost all companies are doing really boring work. I don’t believe anyone in the world is truly passionate about things like payroll software. If I followed my intere…

I find this a little sad. When I was at university I would find all sorts of crazy passions/hobbies/interests - building a projection TV from parts, improving my mobile phone signal/look/battery life, figuring out how to get logos and ringtones into my phone for free. The first two turned into hobby businesses that made me drinking money for years and even rent some months, the logos/ringtines got me my first web job…

Go fuck yourself

Re: How to Lose Money

#290

Post by dannyw »

eloff wrote: post #280
dannyw wrote: post #59

Earlier quoted context omitted.

Earlier last year around May, when the stock market seemed to pick up after the COVID crash, I purchased a number of deep OTM LEAPs (long expiry options; until early this year). They were incredibly cheap. I often had trouble finding a market maker for those. I only chucked about $2000 in, but these options have grossed $15,000 in realised returns and $25,000 in unrealised returns. Options allowed me to make a “bet”…

How did you find those options and decide they were a "good deal"? I'm curious about the details around how you implemented your strategy.

My original thesis was that the coronavirus may continue to grow and impact meatspace businesses for years (like until 2023), and hence tech stocks like Google, Facebook, and Shopify has huge upside.

I also reinforced this viewpoint with “momentum”: academic studies over centuries show today’s winners are more likely to be tomorrow’s winners.

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