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What to know about the stock market (2007)

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Re: What to know about the stock market (2007)

#261

Post by [deleted] »

greatpostman wrote: post #247
gruez wrote: post #244

Earlier quoted context omitted.

>>So my advice to anyone who already got rich from their investments in the last couple of years: Congratulations! Now take that money, invest it in the most boring thing possible, and enjoy life. >Taking on risk over the last few decades has paid off in spades. There's two types of risk here: risk that is compensated by higher returns (eg. buying stocks rather than bonds) and risk that isn't compensated by higher re…

Keep saying this and watch your peers assets balloon in value. There’s really nothing to argue about, spreading this “I can’t beat the market mantra” is bad for everyone. Also asserting that tech, which is essentially the largest growth area won’t keep growing is a radical opinion

[deleted]

Re: What to know about the stock market (2007)

#262

Post by cecilpl2 »

dom96 wrote: post #256
3pt14159 wrote: post #99

Earlier quoted context omitted.

People keep telling me this, but I keep beating the market. It's been 20 years or so of applying very basic reasoning and getting ahead. 1. Commodities are bad long term bets because technology gets better. I remember people talking my ear off about peak oil and then the US turned into a net-exporter. Short term inelasticity, yes can sky rocket prices; but long term prices go down. 2. Physics based thinking. I knew e…

> I think there will be a -%50 S&P500 crash, maybe more And this is why I am going against the advice of the majority(?) and trying to time buying into the S&P 500. I am looking for another crash like the one around when COVID started. Am I wrong and should I also not try to time the market?

One bit you are missing is that it's entirely possible that today is the cheapest the S&P 500 will ever be. What if your 50% crash only comes after the market has tripled?

Another is this: What if the market crashes 40% but then goes back up? Do you buy at 40% down? What about 30% then?

It's easy to say "well I'll just buy at the bottom" but you can't know when the bottom is until well after it's happened.

The other major piece of the puzzle is that during a 30-50% crash, everyone you know and all the media will be screaming in your ears about how everyone is losing all their money in stocks, and that the only reasonable thing to do is sell now so you don't lose it all. Do you have the stomach to put all your money into the market in those conditions?

Re: What to know about the stock market (2007)

#263

Post by cecilpl2 »

bestcoder69 wrote: post #197
lvl100 wrote: post #191

Earlier quoted context omitted.

This is such a bad advice. Buying an index is what they want you to do. They want you to buy and hold until you retire. Do you not see the problem with that logic?

And the sickest part of their whole plan is the part when you get to withdraw more money than you put in. Luckily, crypto solves this problem.

Of course you get to withdraw more money than you put in, because you owned productive assets.

Stocks are the middle class's ticket into the ownership class.

Re: What to know about the stock market (2007)

#264

Post by gruez »

greatpostman wrote: post #247
gruez wrote: post #244

Earlier quoted context omitted.

>>So my advice to anyone who already got rich from their investments in the last couple of years: Congratulations! Now take that money, invest it in the most boring thing possible, and enjoy life. >Taking on risk over the last few decades has paid off in spades. There's two types of risk here: risk that is compensated by higher returns (eg. buying stocks rather than bonds) and risk that isn't compensated by higher re…

Keep saying this and watch your peers assets balloon in value. There’s really nothing to argue about, spreading this “I can’t beat the market mantra” is bad for everyone. Also asserting that tech, which is essentially the largest growth area won’t keep growing is a radical opinion

>Keep saying this and watch your peers assets balloon in value. There’s really nothing to argue about, spreading this “I can’t beat the market mantra” is bad for everyone.

While I don't doubt that you could beat the market given enough effort, I'm skeptical that you can trivially beat the market with a strategy as simple as "buy tech stocks". I'll invoke the efficient market hypothesis here: if tech stocks are expected to grow 20% but non-tech stocks are only expected to grow 10%, why would anyone buy non-tech stocks? Wouldn't everyone bid up the price of tech stocks so that their returns would only be 10%?

Re: What to know about the stock market (2007)

#265

Post by codeulike »

My theory is that finance is all about making things too hard to understand, so that fraud, monopolizing/size advantages and market manipulation are easier to get away with. Fifty years ago that was possible on the stock market because it wasn't open to the general public. During the 80s/90s it was opened up to consumers and since then (adjusted for inflation) it hasn't really gone anywhere. Profits have now moved elsewhere, to where the complexity and the hiding places are (hft, crypto, derivatives)

Re: What to know about the stock market (2007)

#266

Post by adamsmith143 »

logicalmonster wrote: post #226
shoto_io wrote: post #157

Earlier quoted context omitted.

My stock advice for any rookie has always been the same: - Buy S&P ETFs, most preferably by Vanguard, because they are a non-profit and thus have very low fees - If you have a large sum of cash, go all-in immediately, don't wait for the perfect time - Now, just wait, ideally 10+ years, before looking into your account again

Historically speaking, I think this has been one of the best things an average person could do within the context of a stable, safe, free, and productive society, but I don't think this kind of generic advice is really persuasive in the different and more turbulent world that exists right now. Additionally, because of many societal conditions, right now many people think they need to hit on a moonshot to have a good…

Seems like the solution to the turbulent world we are in certainly isn't pick your own stocks or YOLO on crypto.

Re: What to know about the stock market (2007)

#267

Post by greatpostman »

gruez wrote: post #264
greatpostman wrote: post #247

Earlier quoted context omitted.

Keep saying this and watch your peers assets balloon in value. There’s really nothing to argue about, spreading this “I can’t beat the market mantra” is bad for everyone. Also asserting that tech, which is essentially the largest growth area won’t keep growing is a radical opinion

>Keep saying this and watch your peers assets balloon in value. There’s really nothing to argue about, spreading this “I can’t beat the market mantra” is bad for everyone. While I don't doubt that you could beat the market given enough effort , I'm skeptical that you can trivially beat the market with a strategy as simple as "buy tech stocks". I'll invoke the efficient market hypothesis here: if tech stocks are expec…

Dude I used to work at a hedge fund, the whole efficient market hypothesis isn’t what you think, and it’s insane to think it means you need to buy every single stock. You’re just going to lose a bunch of money investing this way

Re: What to know about the stock market (2007)

#268

Post by Thrymr »

gitfan86 wrote: post #237
bradfa wrote: post #117

Earlier quoted context omitted.

I've invested in GM and avoided investing in Tesla. Mostly just because I understand GM, their business and financials and stock price history makes sense to me. I do not understand the valuations on Tesla, and hadn't even long before COVID and the most recent run-up in value. Clearly I've missed out on massive earnings if I had invested in Tesla instead of GM (although GM's done decently lately). To me looking at th…

Forget the stock price. Look at operating margins, operating leverage, delivery volume, trailing delivery volume growth, battery supply, dealership contracts.

> Forget the stock price. Look at operating margins, operating leverage, delivery volume, trailing delivery volume growth, battery supply, dealership contracts.

All of these things can be good and the company could be set up for profitability and success, and yet the stock price is _still_ overpriced.

Re: What to know about the stock market (2007)

#269

Post by blurker »

llampx wrote: post #111
3pt14159 wrote: post #99

Earlier quoted context omitted.

People keep telling me this, but I keep beating the market. It's been 20 years or so of applying very basic reasoning and getting ahead. 1. Commodities are bad long term bets because technology gets better. I remember people talking my ear off about peak oil and then the US turned into a net-exporter. Short term inelasticity, yes can sky rocket prices; but long term prices go down. 2. Physics based thinking. I knew e…

When I was completely new to investing I put my money into AAPL, TSLA, AMD and TSM based on my experiences with them. That portfolio would have done extremely well had I stuck with it. I think the dogmatic "nobody can beat the markets" is hurting people who then think they may as well give up, and patently not true when you look at traders who beat the market year in and year out, and minimize their losses when they…

Actually I think you have it backwards. The notion that traders consistently beat the market is hurting a lot of people. There are extremely few traders who beat the market year over year. It becomes vanishingly fewer every year you add. Which is what you would expect for a system where luck plays a big role and nobody can actually predict the market.

Tldr; way too many people believe that a lot of people can beat the market and that is what actually hurts the most investors.

edit: spelling

Re: What to know about the stock market (2007)

#270

Post by tim333 »

This is a nice article but a bit beginnerish and gets facts wrong partly because the author seems a bit vague on the difference between a maker and taker in a transaction. The maker is the party that sits there waiting for bids and offers to come in and that taker is the party that doesn't wait and says buy this now or sell this now. The bid is the lower price that a maker offers to buy stock for and the ask is the higher price that they offer to sell it for. In the first example

> What you can buy it for? (Your best bid)

> What you can sell it for? (What you’d ask for it)

They have it the wrong was around I think in that the amount you can buy an iphone for as a taker / customer is generally higher than what you can sell it for so what you can buy it for is the (dealers) ask price and what you can sell it for is their bid. If you are a dealer / maker with a stack of iphones sitting there then the higher price you offer to sell them for is what you ask and the bid is what you'll offer for people selling you their phones.

There are some other simplifications too like "All prices are completely transparent." In an ideal world but in reality there are off market transactions, wash trading, faking and so on.

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