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More men are addicted to the 'crack cocaine' of the stock market

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Re: More men are addicted to the 'crack cocaine' of the stock market

#501

Post by n144q »

itake wrote: post #439
djsnoopy wrote: post #414

Earlier quoted context omitted.

Well, it’s harder then you’re letting on if your leverage costs 20%+.

Apple is up 40% this year, VOO is up 27%. 20% cost and you’re still ahead

And what if Apple is not up 40% this year?

Apple was down 24% during Dec 2021-Dec 2022. It could have happened this year, could happen next year. Nobody knows.

By comparison, VOO was down 18% during that period. If you put money in Treasury bonds, you come out positive.

My point is that there is a reason behind many practical, reasonable financial advice instead of "cash advance at 20%, and if you are lucky, you could still be ahead".

Re: More men are addicted to the 'crack cocaine' of the stock market

#503

Post by n144q »

itake wrote: post #442
liendolucas wrote: post #358

Coincidentially today I've just finished reading: "The Little Book on Common Sense Investing" by John Bogle. What's described in the article is exactly the opposite of what people should be doing if interested in serious investing. The book mostly focus on index funds and I highly recommend its reading to anyone who wants to understand and embark on investing seriously. The book is short, extremely easy to read, full…

I’ll add it to my reading list, but I think a lot has changed in the world since this book was written.

What hasn't changed:

* US economy has been growing steadily, and will do so for the foreseeable future

* Index funds are still a great way to invest your money

And more importantly,

* Most people suck at picking stocks (including the average Joe, mutual fund managers, YouTube/TikTok influencers and "stock analysts"). It's better to just leave it to the market, aka SPY(VOO)/VTI etc., and have good sleep.

Re: More men are addicted to the 'crack cocaine' of the stock market

#504

Post by kerkeslager »

habosa wrote: post #247

Many criticize the retail investor for treating the stock market like gambling, but I think it really does resemble gambling more than investing these days. How many times have we seen a companies value jump or fall by billions based on a tweet? How many meme stocks have we seen? How many pump and dump SPACs have there been? How many companies have never (and likely will never) made a dime in profit but see their mar…

The thing is, picking a company that actually will generate solid long-term revenue isn't really a thing. You can try, but your success rate, if you're good at it, is going to be about equal to the success rate of companies. There are dozens of studies of professional traders showing this. If you're bad at it, you'll buy into the companies that are pure hype and do worse. And... you probably aren't good at it. Most people aren't.

The people who beat the market consistently have information you don't. Instances of people who call major trends before they happen and get rich are likely survivor bias and not genius.

Re: More men are addicted to the 'crack cocaine' of the stock market

#505

Post by kerkeslager »

itake wrote: post #382
onemoresoop wrote: post #285

Earlier quoted context omitted.

Aren't index funds more modest in gains but more safe?

Depends on the index fund. There are triple leveraged funds that can go to zero in a crash

Sure, but the person asking this question is asking from a more beginner level that doesn't need to know that unusual edge case.

The answer I'd give is:

Yes, index funds made up of stocks are safer than individual stocks, because it's very unlikely all the investments in a large index will go to zero, or even all go down.

On average, index funds of stocks aren't more modest in gains than stocks--they do just as well as stocks on average.

People think they can pick individual stocks that beat an index, and sometimes they do, but there is good reason to believe that their successes are the product of random chance rather than actual ability. If it is possible at all to pick stocks that beat the market, it is a lot of work. If you're thinking of investing, I'd start with an index.

Re: More men are addicted to the 'crack cocaine' of the stock market

#506

Post by n144q »

exe34 wrote: post #222
gcanyon wrote: post #139

Earlier quoted context omitted.

Ugh. I vividly remember when my stepfather tried to get me involved. He was retired, and had a nice nest egg built up from a small business. He was a smart man. But he was paying thousands of dollars per year for a monthly newsletter that contained . And he patiently showed me how he started with a row in the table that met then followed to the column that met and that was the choice he made in the market. And I'm th…

sounds like he had a hobby.

An expensive one.

I'd spend that money on piano/drawing lessons or something. Or take a few trips around the world.

Better return on investment.

Re: More men are addicted to the 'crack cocaine' of the stock market

#507

Post by JumpCrisscross »

mancerayder wrote: post #463
bluepizza wrote: post #449

Earlier quoted context omitted.

A gambling addict thinks they can learn to play poker because there is a small elite of professional poker players. Which is exactly what an amateur trader thinks - I will learn to beat the market, because Ray Dalio did. I used the poker example precisely because of this parallel between a very small elite and an overwhelming majority of loss makers.

You're right in that sense that people think they can learn to be the best, and fail at it, as only few succeed. The game wouldn't have tournaments if that were true no one could consistently win financially. You're also right that it triggers the addiction itch in some vulnerable individuals! I play poker and would never be stupid enough to put real money on it. It's great as a social game for me where 25 dollars is…

> I play poker and would never be stupid enough to put real money on it

This whole thread is casinos arguing against regulation because casual poker players don’t get addicted. We have billions of dollars targeting young people (mostly single young men) with gambling, from zero-day options trading to crypto and sports betting.

Re: More men are addicted to the 'crack cocaine' of the stock market

#508

Post by n144q »

iamthemonster wrote: post #88
matt3210 wrote: post #38

At one point I knew I could beat the market with l33t software skills. I was wrong and only realized it after donating about 3k to Wall Street.

Every so often I receive commercially sensitive information about my company which I'm not allowed to disclose before it's formally communicated to the stock market. For fun, I try to predict what impact it'll have on the share price (though of course I can't actually trade!) I can successfully predict the direction of the share price movement 50% of the time and successfully predict the magnitude of the share price…

Maybe consider using a stock market simulator, make trades based on inside information, and see where you end up in one year? That would be interesting.

Re: More men are addicted to the 'crack cocaine' of the stock market

#509

Post by rsanek »

habosa wrote: post #247

Many criticize the retail investor for treating the stock market like gambling, but I think it really does resemble gambling more than investing these days. How many times have we seen a companies value jump or fall by billions based on a tweet? How many meme stocks have we seen? How many pump and dump SPACs have there been? How many companies have never (and likely will never) made a dime in profit but see their mar…

things haven't changed since vanguard started index funds 5 decades ago. buying and holding diversified assets prevents you from thinking "You need to figure out what is going to 10x tomorrow."

Re: More men are addicted to the 'crack cocaine' of the stock market

#510

Post by solumunus »

JKCalhoun wrote: post #210

> They expect the problem to worsen. The stock market has climbed 23% this year... The problem will resolve itself if (when?) the market crashes. I remember the run up to the dot-com bust. I was too much of a bumpkin at the time to even know how I would trade stocks — but I listened to an acquaintance go on and on about how much he was making on the market. At the time I guessed that he was much smarter than me — tha…

Personally I got into this when the stock market crashed in 2020 and I made shit loads. There are big winners during crashes too, some of the biggest wins.
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