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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

#571

Post by nytesky »

mordymoop wrote: post #297
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…

The problem is that I have been seeing some version of the “crash imminent, sell everything” thesis for my entire life. Almost nobody who “saw the crash coming” in the case of the dotcom bubble, or covid, or the subprime crisis made any money, because almost nobody gets the timing or magnitude of the crash right. You can find YouTube channels that have been warning people that a crash is imminent for the last two yea…

I assume PP means they are staying out of leveraged bets and risky individual stocks.

Generally the saw it coming crowd is just sticking it in diversified index and bond funds and doing other things.

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

#572

Post by Huppie »

IshKebab wrote: post #566
seattle_spring wrote: post #555

Earlier quoted context omitted.

No. You invest the same amount of money at a regular cadence throughout the year. The end result is that you obtain less shares when the price is high, and more shares when the price is low. It's explicitly not timing the market.

It's implicitly timing the market. If you have all the money available at the beginning of the year a better strategy is to just invest everything asap. If you get the money monthly (e.g. from salary) then that's just normal investing and you don't have a choice anyway. If you think that is some clever strategy then honestly you probably should get professional advice because you have some fundamental misunderstandin…

Heh, I totally agree with you.

I don't know hoe many times I've explained people the given strategy is not what researchers mean when they compare lump sum investing (LSI, a.k.a. converting all cash you have available for investing into equities) and dollar-cost averaging (DCA, a.k.a. splitting the available cash into equal parts and slowly converting the cash into equities at a regular pace.)

What that strategy is is just a regular (e.g. monthly) series of lump sum investments every time cash comes available (e.g. when salary comes in), that people tend to confuse with a DCA strategy.

Having said that: one LSI investment every month is a great strategy that historically does better than any DCA strategy.

ETA:

Relevant research:

- Vanguard Research's Dollar-cost Averaging is Just Taking Risk Later: https://www.passiveinvestingaustralia.com/wp-content/uploads... - PWL Capital / Ben Felix's Dollar Cost Averaging v.s. Lump Sum Investing: https://pwlcapital.com/wp-content/uploads/2024/08/Dollar-Cos...

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

#573

Post by carlosjobim »

stocknoob wrote: post #553
xanderlewis wrote: post #523

Earlier quoted context omitted.

Unlimited in ratio, I guess.

Even then, brokers just show a percent loss of -100%. Our buddy would never see the cool infinity symbol. It’s too bad they aren’t a fan of dollar cost averaging into broad index funds, I think their older self would thank them.

My investments have always had fantastic results, far above what any index fund could render. I have been forced to involuntary "dollar cost averaging" by having to wait for the next salary in order to invest more. But "dollar cost averaging" is not an investment strategy, it's confusion on the highest level.

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

#574

Post by mnky9800n »

kacesensitive wrote: post #556
mnky9800n wrote: post #530

Earlier quoted context omitted.

I just always buy and never sell until the leadership and the board of the company appear to be going full retard. And not in a good way like Netflix pivoting to streaming in 2006 but like HP in 2006. Haha.

What was the last sell you did?

the last big one was BABA.

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

#575

Post by herval »

jhghikvhu wrote: post #532
herval wrote: post #420

Earlier quoted context omitted.

hedge funds are not the same thing as picking individual stocks. Not even close. Index funds are an averaging mechanism to reduce risk, not to maximize return (you can easily beat the average by allocating on the p75 instead for instance)

I'd be interested in something a little (but not a lot) higher risk reward than index, so I'd appreciate if you expand on this. What is the p75?

Balancing your portfolio to include the top 25 or so best performing companies of the index

Therefore ETFs that track that - eg $XLG is the s&p top 50. Unsurprisingly, consistently beats the s&p500. Same for $QQQ - in this case the skew is for more tech stocks (which were the best asset class in a decade)

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

#576

Post by whiplash451 »

mancerayder wrote: post #465
jdefr89 wrote: post #454

Earlier quoted context omitted.

Dunno about everyone but my 9-5 salary is awesome. I do Vulnerability Research at an MIT lab. Working there is amazing. Much rather my situation than one where I am forced to “trade” and make it big in order to eat and or anything else in life. Great 9-5 jobs are out there and it’s funny because I used to think of them as “awful slave” jobs. Used to think having to do a 9-5 was something to avoid at all costs. Came t…

That particular job sounds amazing, I'd love a 9-5 doing research! I've been working in the dreaded evil industry (non tech but I am in tech) for decades and gave up trying to find a job I loved. Corporate politics sucks that away.

You can still look for a 9-5 in a solid startup or scale-up.

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

#577

Post by whiplash451 »

jncfhnb wrote: post #194
dgacmu wrote: post #70

Earlier quoted context omitted.

I have net managed to beat the market. My estimate is that I've earned approximately $3/hour for the time I've spent doing so. And I was trading in such thinly traded options that it wasn't a matter of "scaling up" - I was literally only able to make money because I was picking up the pennies nobody else cared about. (And/or trading on events that were were rare, obvious, and in an area I understood, which also doesn…

Folks have an unhealthy mentality about beating the market, imo. You don’t need to beat the market if you’re not a fund manager trying to advertise your record. You just need to do well. The market is up 27% YTD. Most global trends suggest, to me, a greater centralization of wealth into the US. Just dumping everything into the SP500 is likely more than great for 99% of people for the near future.

Just because the SP500 did +27% this year does not mean it will continue to do so.

Historical data shows a more nuanced picture.

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

#578

Post by toomuchtodo »

stouset wrote: post #564
fragmede wrote: post #456

Earlier quoted context omitted.

This is the way. Boring is, well, boring. Slice off some small percentage to do high risk investments with to sate your FOMO. Buy GME, sell it for Doge, and short TSLA with that pool after inhaling too much r/WSB because you want to think you're a genius.

Why do I need to get my ya-yas off gambling any part of my retirement? There is zero coherent nor compelling reason to tie your enjoyment of gambling to the size of your portfolio. To be clear I’m not opposed to gambling. I enjoy occasionally going to the local poker room and have an established bankroll. I have plenty of fun at $1/$2 tables even though the buyin is a fraction of a fraction of my net worth. I am mild…

For those who need it, it is a way to manage impulse control. Not everyone needs it, but some people do.

GLP-1s may regulate it (via anti addiction mechanisms observed), more data to come in that regard.

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

#579

Post by RandomThoughts3 »

photonthug wrote: post #538
RandomThoughts3 wrote: post #522

Earlier quoted context omitted.

Technically, value investing still work. The key tenant of value investing is that there exist companies which based on their financial metrics are fundamentally under valued by the market (in opposition to what market price efficiency predicts). From there, an insane market should provide you with even more opportunities to value invest.

> an insane market should provide you with even more opportunities to value invest This seems like a uniquely bad time to make this sort of argument. There are many old tools for insane markets to perpetuate themselves that are recently stronger (revolving doors between industry/government and other garden variety corruption; all the monopolies we have to tolerate out of fear, convenience or greed; "too big to fail"…

> Value investing seems to need reliable information from somewhere to make informed decisions, but where is that going to come from?

Value investment is entirely based on financial fundamentals. You don’t need magic information. That’s the whole point. For something that old, people like to use the world but seem blissfully unaware of what it actually is. Graham’s books are available pretty much everywhere.

The whole point of the thing is that fundamentals actually matter and markets misprice because they rely on other less sound things. That’s why it seems even more relevant in a post truth market.

None of the companies you listed would have qualified as sound for value investing by the way.

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

#580

Post by hipadev23 »

rsanek wrote: post #511
hipadev23 wrote: post #433

Earlier quoted context omitted.

There’s nothing to say it was predatory games. Roblox is a platform with a vast number of games from unaffiliated developers.

i mean they're pretty affiliated, they develop games that only work on their platform and get paid by Roblox directly.

The developers themselves are anyone who wants to make and publish games is my point, and unaffiliated with own another. And those developers are free to build and monetize games however they want. Just like other closed-ecosystem (e.g. iOS) game devs.
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