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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)

#251

Post by Bewelge »

d82nsjk9 wrote: post #200
3pt14159 wrote: post #147

Earlier quoted context omitted.

As of now? I don't think so. But I did that math back in 2001 or 2002, way before Tesla was publicly traded.

What's the math?

Not OP but I remember watching a movie "Who killed the electric car?" in highschool. It's about the EV1, an electric car by GM in the 90s. It had a range of 70-100 miles. If I remember correctly the movie kind of insinuates that the oil lobby ultimately prevented the model from releasing/selling well. So just based on that, the knowledge that electric cars are a viable substitute for a lot (in Europe I'd say most) of use cases has been quite readily available.

But that's the problem in OP's reasoning. Simply knowing that electric cars will dominate in the future is pretty worthless as investment advice. Especially when we are talking about tesla, which's stock price is entirely decoupled from any fundamental values. Today, I actually think that becoming one of many car makers is the best-case scenario tesla can hope for. It was always the question whether they can get enough of a head start in self-driving and battery tech BEFORE traditional car makers start making EVs. Those have decades of a head-start in every other aspect of car making. And to me it seems that most of them fully committed to EVs in the last 1-2 years. So will Tesla's advantage in battery tech buy them enough time to make cars that are as safe and reliable as traditional cars?

Also: I really don't know much about cars, so I might be wrong about pretty much everything I just said :) But it shows nicely that you can find logically sound arguments about future developments which are worth absolutely nothing on the stock market. Just look at the stock market since the beginning of Covid.

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

#253

Post by modo_mario »

kwere wrote: post #185
runarberg wrote: post #55

Earlier quoted context omitted.

Personally I have a philosophical (read marxist) reason to avoid it. Fundamentally I see the stock market as an exploitation tool which the rich use to siphon money away from workers and into their own pockets without contributing. Every dollar you get but didn’t work for was a dollar that somebody else worked for but didn’t get. The stock market is full of transactions which yields profits for the rich while leaving…

profits, outside of law encroachment or sheer luck are due to risk taken, the majority of adults dont want to risk more than their time and as we age our risk aversion increase. Creators of wealth are few and between, because they risk more and usually are more skilled than the average joe. This is also the reason why wealth dont survive over generations . these are few of the "marketing driven" meritocracy we have a…

>This is also the reason why wealth dont survive over generations .

There is loads of counterexamples for this though. Especially in older countries in Europe it can become very apparent.

Also having wealth (trough inheritance) enables one both more opportunities and reduces risk. A poor person taking a "gamble" on a business (if they can start one that doesn't require long rampup or capital) will struggle to feed themselves if it fails. A rich person (if not just focused on inherited assets) can try multiple times and is often encouraged to because of this but also trough exposure to fundamentals from family.

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

#254

Post by nichohel »

melenaboija wrote: post #225
choward wrote: post #187

Earlier quoted context omitted.

> Now, just wait, ideally 10+ years, before looking into your account again That might not be the best idea because of escheat. Here's a story about someone who didn't check on their stocks for years and the state claimed them. https://www.npr.org/transcripts/799345159

The poster says buy S&P ETF and walk away not stocks.

ETFs do pay out dividends from the underlying stocks. This does not require you to look at the account (in the US you will get a form at the end of the year summarizing what you have to pay taxes on).

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

#255

Post by khold_stare »

Really great article! Very well explained.

One small inaccuracy is the claim that there is only one place for each stock. That has not been true for many years. In the US that was changed by https://en.wikipedia.org/wiki/Regulation_NMS . NASDAQ is the primary listing exchange for MSFT, which means they will hold the opening and closing auctions, but it can be traded on any equities exchange, NYSE, IEX, BATS, EDGE-A, EDGE-X, you name it. RegNMS also has rules that if there is a better price at another exchange, the order must be routed there. This establishes the "NBBO" - National Best Bid and Offer, so in a way there is always one best bid and one best ask, but it's an aggregate over all the exchanges.

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

#256

Post by dom96 »

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 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?

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

#257

Post by smat »

pembrook wrote: post #50
sdevonoes wrote: post #11

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.

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…

Germany is even worse than you describe. The pension system managed by the government is not backed by any assets at all, but works by taking from the working population to the retired population. Given the age distribution in Germany this means young people are increasingly paying more to this system, while retired people receive less and less per person.

This was of course obvious already a while back, so the government decided to introduce additional ways to encourage saving for retirement (by giving tax discounts). However, they also managed to screw this up, because only contracts from certain insurance companies apply for these tax discounts. And these contracts have such a high management fee, that the real return of those constructs is negative.

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

#258

Post by adamsmith143 »

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

This x1000 I've seen plenty of friends of friends who probably had issues passing HS Algebra thinking they're "Daytraders" because they made some money off BTC or GME in the past few years and I just cringe so hard. My index funds consistently return ~20% a year lately. If you aren't even matching that you aren't a trader you're a sucker.

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

#259

Post by vel0city »

lotsofpulp wrote: post #173
thrav wrote: post #135

Earlier quoted context omitted.

Their investment in Tesla alone would be more than enough evidence, if they got in near their IPO. Throw in an investment in Apple when everyone started switching to Mac circa 2006 (I told everyone who would listen to buy it, but I was a college freshman, so no one listened, but it was so obvious), and you got a stew going. It didn’t take anything fancy to crush the market if you started 20 years ago and were dialed…

Pretty impressive to have foreseen, as a college freshman in 2006, the proliferation of broadband mobile internet and the development of mobile devices capable of taking high quality photos and video, mapping services, video calls, health tracking, and other functions that would obviate and consolidate multiple industries.

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, and streaming internet radio to Bluetooth wireless headphones. It seemed obvious to me that these devices would get faster over time and that the cameras would get better, as I had already seen the progress from the earlier 320x240 cameras to >1MP cameras on phones, mobile data speeds increasing from GPRS speeds to 3G, and WiFi both becoming more common and jumping from 11Mbps to 54Mbps within just a few years. I had seen the greyscale and slow Palm IIx device my dad used to carry turn into the color Blackberry with constant network connectivity happen within a few years, it seemed obvious these devices' functionality would continue to rapidly grow and move into all kinds of markets.

In 2006 I don't know that I would have thought Apple would have dominated the market as much as it has, but the iPhone hadn't been announced yet nor would it have 3G for another year after that. In 2007 I got my first phone with a front-facing VGA camera which could do video calls over 3G networks, before the iPhone had native apps or 3G.

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

#260

Post by jandrewrogers »

cehrlich wrote: post #189
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

Agree in almost all ways: - ETFs, Vanguard is a good choice for most. If you're older and might need a large percentage of the money fairly soon, consider getting some bonds as well. - Don't try to time the market - Don't think you're smart The only personal difference is I prefer FTSE All World as it is diversified into over 4000 global stocks, while the S&P 500 is (obviously) 500 American stocks. That being said th…

Many companies in the S&P500 source much of their revenue globally. They are registered as US companies but their business exposure covers the world, so you achieve much of the same diversification but in a US legal framework for business and securities.
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