What to know about the stock market (2007)

>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. To everyone who is trying to get rich quick now: Do your thing I guess, but be aware that you're gambling.

That right there is the best advice. If you want to get rich quick, you're going to have to make some calculated bets with higher return and thus higher risk. However, if those bets work out and you do become rich, don't fool yourself into thinking you're some kind of super genius that can consistently beat the market.

This can be a hard lesson for people to learn (it took me a long time), because in most aspects of life success is more skill based. With investing, there is more decoupling between action and outcome due to randomness, and you have to always consider you may have made the right choice and lost, or you may have made the wrong choice and won. In the case of the latter, take your winnings and be happy, but don't delude yourself into thinking you made a good play. This is extremely hard, you have to be willing to put your ego aside and realize you actually made a mistake that made you a lot of money.

I think ordinary people with the right knowledge and foresight at the right time can beat the market in the short term. The trick is to be extremely patient until you have a reasonable level of confidence you have an edge in a bet with an asymmetrical return, and then take a position with conviction. I've done this a few times in my life, and the knowledge, timing, and luck all happened to work out for me. I've also had that feeling a few other times where things went south. Luckily for me the winners far exceeded the losers. However, I wouldn't con myself into believing I can consistently generate an edge. I simply made a small number of calculated bets when the stars all aligned for me. It's very possible the stars will never align for me again like that, which is why I've now moved most of my money into ETFs and other safe investments.

One way to spot someone who doesn't know what they're doing with investing and trading, is you never hear about their losses. You never hear about their net gains. You never hear them tell you the story of when they drunkenly made a really stupid leveraged stock pick that just happened to work out from pure luck. No, you hear all about the winners, all about how they knew for sure it would work out for all these reasons. You just see the overflowing ego that gambling has drummed up, rather than the intellectual honestly of someone who has sat back and grappled with the tough question, "did I make all this money because I'm smart, or am I just a dump and lucky ape?"

While I do have some experience, that's not really that relevant. I'm not saying this because of my own experience (which would be anecdotal evidence). It's based on actual market data, which is what is actually important for making a generalization like this. Many statistics show that overwhelmingly, active investors underperform indexes. And that is especially true year over year because a lot more people can get lucky a few times but they cannot consistently reproduce those results.

One example of some data that shows this is the SPIVA score cards. Here's a nice page that explains it and presents some of the recent results: https://www.bogleheads.org/wiki/SPIVA_scorecards

There is tons of other information if you just Google for it. When it comes to actual evidence of performance, the facts are pretty clear!

How about you? Do you have any objective data to show otherwise?

I work in the industry too and the things that people mislabel as "front running" is really aggravating. At worst, you could call it "order anticipating": using publicly available knowledge to figure out that if someone hit Exchange A and B, they're probably headed to Exchange C next. But they have no inside knowledge that the same party will in fact send an order to Exchange C next. They're taking a risk by anticipating that.

"Front running" as defined by the SEC has a more narrow definition. It basically means that you have a customer that has placed an order for XYZ and you aware of the order, but you placed your own order to be executed in front them, thus forcing them to buy it from you at a higher price than if their order was executed first. HFTs are not "front running" anybody.

>meh. even cheap hot hatches are close to being too fast to fully use on public roads these days. the race to ever quicker 0-60 times is incredibly boring and misguided imo.

currently drive a hot hatch. Can confirm this. The magic number for me is probably around 4.5s. Anything faster is really not needed.

>a model 3 probably is superior to a hellcat in every measurable way, I'll give you that. although I doubt most hellcat owners would willingly trade them in for anything lacking a loud V8.

Ironically... had hellcat before this. Can confirm this as well. I do miss the supercharged v8 whine.

>but people don't buy Porsches to drag race. there have always been much cheaper vehicles that would beat them handily on a drag strip; it's not what they're are designed for. they are pretty fast on the track, but unlike a Tesla, the appeal of a Porsche cannot be summarized in a single performance metric.

My next vehicle will most likely be an EV truck. I think this is what you are missing right there. I would bet the majority of people driving porsche have not taken them to a track. That's not the purpose.

A car with good accelerating power will automatically give me a high speed performance. ~ Ferdinand Porsche.

I cant find the exact quote, but Porsche said, To build a car that drives well at 200km/h, you must build it to go 300km/h.

Tesla plaid doing 2 second 0=60 is idiotically fast as you would agree. It's not about that. It's about driving it without doing that.

> 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 target markets who can afford them? why didn't you look at population demographics?