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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)

#301

Post by Tiktaalik »

cehrlich wrote: post #85

This is a great article that explains markets (not just the stock market really) in an easy to understand way. The one thing I believe people should know about the stock market is: There are people with more capital, time, and knowledge than you who will consistently beat you. Picking individual investments is mostly a sucker's game. Buying tech stocks and/or crypto in the last couple of years has been a consistent e…

> I worry that many of the people who made good money from those investments will now believe that they have some superior understanding that lets them consistently beat the market.

lmao god this feels so much like the mindset of so many tech people in general. They were right about one thing so naturally they're of course right about this next thing...

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

#302

Post by Tiktaalik »

3pt14159 wrote: post #99
cehrlich wrote: post #85

This is a great article that explains markets (not just the stock market really) in an easy to understand way. The one thing I believe people should know about the stock market is: There are people with more capital, time, and knowledge than you who will consistently beat you. Picking individual investments is mostly a sucker's game. Buying tech stocks and/or crypto in the last couple of years has been a consistent e…

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 keep beating the market

I keep "beating the market" too though I calculated my risk adjusted return and with that metric I wasn't.

So really I was doing better because I'd cranked up the risk, and fortunately we've been experiencing a bull market.

Hard to say whether I've really been making savvy choices or if it's just been a bull market trend that has been saving my ass.

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

#303

Post by cudgy »

greedo wrote: post #217
cudgy wrote: post #122

Earlier quoted context omitted.

Buffet and Munger manage the companies they buy. You, 99.99% of stock purchasers, and I are dependent on the existing management with no control over decisions companies make. Big difference.

Actually they don't. They put managers in place and are largely hands off on the running of their acquisitions.

They pick the manager and understand their personalities and backgrounds fully. That is far from hands-off.

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

#304

Post by Dma54rhs »

flavius29663 wrote: post #240
pembrook wrote: post #50

Earlier quoted context omitted.

Europeans can have the luxury of not worrying about investing since many European countries offer livable pensions (for now…the demographic future for this isn’t looking so good). However, this isn’t as great as it sounds. While the European model for healthcare and education is better, their pension schemes are arguably a much worse deal than what Americans can have. In Europe, you’re basically paying the government…

> livable pensions This is a myth. People struggle on state pensions throughout Europe, but for some reason young Americans idealize everything that comes out of Europe. In Germany(a country of 80 mil), the average pension is $1000 once you get to 65. In France it's not much more. The social security in the US beats that, plus you can usually afford a private pension, because the government doesn't take 50% of your p…

It's absolutely true and Americans like to do the evangelization of these strange beliefs about Europe. There are good and bad parts about every system and thinking everything is perfect in Europe is about as dumb as Euros are socialists and its bad dogma.

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

#305

Post by vel0city »

lotsofpulp wrote: post #290
vel0city wrote: post #259

Earlier quoted context omitted.

I was a teenager in 2006 and still understood mobile devices with fast internet connectivity with photos, videos, mapping services, and video calls were going to be a big thing soon, as to a tech nerd like me it was already partially a reality. By that time I already had Google Maps on my phone, was uploading photos to web services through MMS gateways, was browsing the web with Opera Mini, had my email on my device,…

> In 2006 I don't know that I would have thought Apple would have dominated the market as much as it has, But that is the most important point. The rest is trivial, but knowing which organization will be able to capitalize on it is the only relevant fact if you are trying to optimize for a return. In 2006, the mobile network owners seemed in prime position to use their monopoly to squeeze everyone else, as well as Bl…

I agree, the challenge is seeing that it would be Apple that saw the gains moreso than 3Com, Nokia, LG, and others. There were tons of companies which were obvious plays at the time, several of which no longer exist.

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

#306

Post by xnx »

cecilpl2 wrote: post #263
bestcoder69 wrote: post #197

Earlier quoted context omitted.

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.

I think the previous post was sarcasm.

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

#307

Post by kqr »

3pt14159 wrote: post #99
cehrlich wrote: post #85

This is a great article that explains markets (not just the stock market really) in an easy to understand way. The one thing I believe people should know about the stock market is: There are people with more capital, time, and knowledge than you who will consistently beat you. Picking individual investments is mostly a sucker's game. Buying tech stocks and/or crypto in the last couple of years has been a consistent e…

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…

> 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.

You can make money on things that go down as long as they are not too strongly correlated with other things, and you maintain a constant fraction portfolio. One of the search terms here is "volatility pumping", I believe.

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

#308

Post by rurp »

3pt14159 wrote: post #99
cehrlich wrote: post #85

This is a great article that explains markets (not just the stock market really) in an easy to understand way. The one thing I believe people should know about the stock market is: There are people with more capital, time, and knowledge than you who will consistently beat you. Picking individual investments is mostly a sucker's game. Buying tech stocks and/or crypto in the last couple of years has been a consistent e…

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…

What's your thesis for why rules such as these haven't been discovered and automated out of existence by the legions of smart well capitalized investors?

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

#309

Post by kqr »

gitfan86 wrote: post #300
fsckboy wrote: post #299

Earlier quoted context omitted.

> Look at operating margins, operating leverage, delivery volume, trailing delivery volume growth, battery supply, dealership contracts. and you think by looking at those you are going to notice some things that analysts in that market have not noticed and is actionable by you because you can tell the current stock price is not correct? Isn't the future performance of Tesla affected by the number of people in its tar…

Do you think Wall St. analysts have a history of being correct? Most are wrong more than they are right. This guy is pretty good, but he was late to the game. https://markets.businessinsider.com/news/stocks/here-s-why-m... This link shows the change in demand for EVs https://www.iea.org/data-and-statistics/charts/global-sales-...

The fact that our best performing models for the risk-neutral price of equities are unbiased random walks tell me that yes, in aggregate, Wall Street is really good at being correct.

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

#310

Post by 3pt14159 »

onlyrealcuzzo wrote: post #160
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…

> Software scales. People like to make money. Combine the two and its a real winner. There were plenty of tech losers. You still had to pick the winners. > Physics based thinking. I knew electric cars were going to work because the math checked out. Electric cars were obvious, but Tesla was not an obvious play. In hindsight, it might seem so, but in the beginning it was far from clear that Tesla would dominate the sp…

> Let's naively assume that you actually can pick stocks. At $10Bn - you need to pick more stocks - otherwise you would drive up the price too much in buying that much of the stock

This refrain is common enough, but I don't think it really bears out in the math. Elon just sold $16B worth of stock and the price barely budged. If you've got enough alpha to work with every beta seller out there will hop off and it's well, well before the peak.

> There were plenty of tech losers. You still had to pick the winners.

Yes because I applied basic reasoning. People were still investing in AOL and Yahoo when I picked Google. Seriously. AOL and Yahoo. It was bananas. Every person I knew that had any amount of tech savviness was on Google. The search results were clearly superior. "Invest in products that are better" should be a meme on WSB or something.

What I didn't mention above was that in the mid 2000s I also made money off of oil because I was following China's modernization and politics in the middle east. People back then pushed me on just how much oil would go up and when I said I thought it could triple they looked at me sideways. But it nearly tripled then I sold. I tried to get into lithium through SQM, because I thought electric cars and widespread computing were going to strain supplies, but they didn't. That's when I learned the lesson that over time commodities go down.

> If you actually followed this advice, you'd probably be worse off than investing in the s&p - even if you did pick good stocks.

Not really? Buying in at the very lowest part of 2009 gives a lot of range to play with. This bullrun is much, much longer than most, but over time I think it's easier to dodge the correction than to call the top. The reason for this is that to call the top is to predict when human irrationality reverses. Something I'm not great at doing. What I'm good at is first principles. And at some point I don't care how much blood there is in the streets. That fucking share of Apple is undervalued enough to where I would sell priceless art to buy it.

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