Am I the only one in HN who is not into the stock market? I live in Western Europe and I would say 75% of my acquaintances don't do stock market. People I have known in the past (old people) didn't do stock market either. They all seem to have lived a normal life (decent jobs, decent house, decent family). Nothing extravagant but they got enough money to be "happy" in life.
What to know about the stock market (2007)
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Re: What to know about the stock market (2007)
#12You should probably get to know some critical aspects of markets too, this article just praises them. That is pretty much the norm, but I think it's a valuable educational endeavour to look at critiques of markets.
Do you have any in mind?
Re: What to know about the stock market (2007)
#13One interesting thing about "highest bid" and "lowest ask" prices is that they can sometimes move up and down for days without a transaction ever happening. This can be observed in certain illiquid markets, e.g. for a specific bond of a company. In those cases, the "last trade price" is meaningless and it's very important to instead look at the bids and asks in the order book.
Why? Clearly, no one is actually willing to trade at those prices. Sometimes, one illogical price in illiquid markets drive the orderbook to illogical extremes. Without a transaction, all are meaningless.
Re: What to know about the stock market (2007)
#14Since this is mostly about one mechanical aspect of markets - what is a "bid/ask" spread - it applies beyond the stockmarket to crypto markets. Except those tend to have fewer rules about the order book.
If you're trading indirectly, which is not unusual with a brokerage, you should be aware of what is meant by "best execution", and I offer this article with an explanation in FX: https://medium.com/bull-market/oranges-and-lemons-the-fx-sca...
Re: What to know about the stock market (2007)
#15the only thing you should know about the Stock Market: it favors those with more capital, if you don’t have much to begin with, don’t expect making life-changing amounts
I think like lots of things... If you expect to do better than other people, be prepared to know more or do more then them. Many people dedicate their lives to learning the stock market and what to do. It's unlikely someone can beat them with doing the bare minimum research. Not saying there isn't shady stuff going on too. There definitely is, but even if there wasn't it is a skill based game.
> Many people dedicate their lives to learning the stock market and what to do. It's unlikely someone can beat them with doing the bare minimum research.
This hints at some sort of deserved meritocracy that just doesn't exist. Funding is king nowadays when a large fraction of trades happen via HFT. Implying that all you need is knowledge in order to reach wealth is misleading at best.
Re: What to know about the stock market (2007)
#16Am I the only one in HN who is not into the stock market? I live in Western Europe and I would say 75% of my acquaintances don't do stock market. People I have known in the past (old people) didn't do stock market either. They all seem to have lived a normal life (decent jobs, decent house, decent family). Nothing extravagant but they got enough money to be "happy" in life.
Do any of them have private pensions?
In the UK almost everyone will have been moved over to a "defined contribution" pension whose value is determined by the stock market, usually in the form of a "stakeholder pension".
I don't "do" the stock market but I do have such a pension. And every few months sweep spare cash out of my current account into an index fund. Effectively I pay people to worry about this stuff on my behalf.
People who retired more than about 10 years ago are far more likely to have "defined benefit" pensions whose value is independent of the stock market.
Re: What to know about the stock market (2007)
#17I have a book written by André Kostolany, which taught me one thing and I believe I've forgotten the rest, because only this one fundamentally matters:
Don't hunt for rising stocks, but chase the falling stocks. Everything that goes down either eventually goes up again, or dies.
While this sounds like it's not helpful, all that's required is figuring out if a company is likely going to die. Even without any manual research, time is ultimately telling. The longer a company at the bottom doesn't die, the more likely it's going to rebound eventually.
https://en.wikipedia.org/wiki/Andr%C3%A9_Kostolany
PS: Don't gamble your life away.
Re: What to know about the stock market (2007)
#18Am I the only one in HN who is not into the stock market? I live in Western Europe and I would say 75% of my acquaintances don't do stock market. People I have known in the past (old people) didn't do stock market either. They all seem to have lived a normal life (decent jobs, decent house, decent family). Nothing extravagant but they got enough money to be "happy" in life.
It's all about the outside influence. When the media doesn't push it, people aren't going to do it. Don't believe it?
When the media started pushing GME, people went and bought GME. When the media started pushing btc, people went and bought btc.
Stocks aren't being encouraged, therefore most people don't do it and instead cluelessly dismiss it mostly as gambling. Same goes for cryptos.
Right until the media pushes it, people buy into it, rich people sell causing prices to crash, and the cycle of cluelessness repeats.
Re: What to know about the stock market (2007)
#19the only thing you should know about the Stock Market: it favors those with more capital, if you don’t have much to begin with, don’t expect making life-changing amounts
I think like lots of things... If you expect to do better than other people, be prepared to know more or do more then them. Many people dedicate their lives to learning the stock market and what to do. It's unlikely someone can beat them with doing the bare minimum research. Not saying there isn't shady stuff going on too. There definitely is, but even if there wasn't it is a skill based game.
Monkeys throwing darts have produced better results than most hedge funds.
Re: What to know about the stock market (2007)
#20I have a book written by André Kostolany, which taught me one thing and I believe I've forgotten the rest, because only this one fundamentally matters: Don't hunt for rising stocks, but chase the falling stocks. Everything that goes down either eventually goes up again, or dies. While this sounds like it's not helpful, all that's required is figuring out if a company is likely going to die. Even without any manual re…
> He was able to make a profit during the decline in market prices which began at the end of 1929, having been bearish at the time.
Well, yes, that might have informed his lessons from trading. There's another saying in the opposite direction, "never try to catch a falling knife". https://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp1545.pdf
But it's not an unreasonable approach. Declines are often driven by panic. If you can determine that it's an irrational panic and the fundamentals of the business remain strong, then you can invest while it's undervalued. It's certainly better than buying just after something has gone _up_.