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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

#581

Post by stouset »

toomuchtodo wrote: post #578
stouset wrote: post #564

Earlier quoted context omitted.

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.

For those who “need” it, you are really playing with fire. It’s not like chasing after losses to turn things around is a particularly rare response.

We’re in a thread under an article revealing how more and more people are falling victim to gambling addiction through the stock market. I’m not convinced that “you should just gamble some of your life savings” is the best suggestion for most people.

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

#582

Post by listenallyall »

jonfromsf wrote: post #459
mancerayder wrote: post #380

Earlier quoted context omitted.

>Amazing companies can be highly overvalued, and crap companies doing garbage work can be undervalued. I'm sorry, but how does value matter? I'm not being flippant - the Mag 7 are not 'value' companies. Are Nvidia, Apple, etc., overvalued? And so we should avoid them or short them? Is Tesla 'priced-in'? There's all sorts of psychology in the market. What does 'priced-in' even mean? What wouldn't be priced in. "Water…

If you compare the forward PE ratio to the regular PE ratio on most of these stocks you will see their profits are growing extremely fast. NVDA has a trailing PE of 55 but a forward PE of 32. TSM has PE of 33 but a forward of 23! A business growing profitability that fast is going to be valued at a premium.

But, when buying those stocks, you're paying for perfect execution. If profit growth doesn't meet expectations, there's a lot of room for the valuation (and the stock price) to fall.

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

#583

Post by toomuchtodo »

stouset wrote: post #581
toomuchtodo wrote: post #578

Earlier quoted context omitted.

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.

For those who “need” it, you are really playing with fire. It’s not like chasing after losses to turn things around is a particularly rare response. We’re in a thread under an article revealing how more and more people are falling victim to gambling addiction through the stock market. I’m not convinced that “you should just gamble some of your life savings” is the best suggestion for most people.

In a just and sane world, we would have pensions, locking up retirement savings away from human impulses and bad decisions. But here we are, doing our best to get through the shit show, surprised when humans do humans things.

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

#584

Post by stouset »

toomuchtodo wrote: post #583
stouset wrote: post #581

Earlier quoted context omitted.

For those who “need” it, you are really playing with fire. It’s not like chasing after losses to turn things around is a particularly rare response. We’re in a thread under an article revealing how more and more people are falling victim to gambling addiction through the stock market. I’m not convinced that “you should just gamble some of your life savings” is the best suggestion for most people.

In a just and sane world, we would have pensions, locking up retirement savings away from human impulses and bad decisions. But here we are, doing our best to get through the shit show, surprised when humans do humans things.

I get that there are some people who do need that outlet. I’m just saying we don’t need to make “set aside 90% to gamble with!” the first recommendation, but maybe the last.

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

#585

Post by [deleted] »

stouset wrote: post #584
toomuchtodo wrote: post #583

Earlier quoted context omitted.

In a just and sane world, we would have pensions, locking up retirement savings away from human impulses and bad decisions. But here we are, doing our best to get through the shit show, surprised when humans do humans things.

I get that there are some people who do need that outlet. I’m just saying we don’t need to make “set aside 90% to gamble with!” the first recommendation, but maybe the last.

[deleted]

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

#586

Post by throwaway2037 »

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…

    > The problem is that I have been seeing some version of the “crash imminent, sell everything” thesis for my entire life.
What do you think is the root cause for this kind of thinking? It is hard-wired from childhood, or borne of (difficult) experiences?

    > Much better to just stay in the market, knowing that there will be crashes and you will have days where the numbers look awful, because they’ll look great again in a few years.
This assumes that you are talking about the US stock market. Most other stock markets are far slower to recover from economic downturns and crises. Why? Their economies are less dynamic and their political leaders are more fearful of difficult (economic policy) changes.

    > The stock market is a mechanism for transferring wealth from the impatient to the patient - Warren Buffett

    > For 240 years it's been a terrible mistake to bet against America - Warren Buffett
Lastly: The Nikkei 225 (Japan's most important equity index) peaked in 1990, then took 30+ years to recover.

Also: Look at Mainland China since it was opened to (direct) foreign investment in the last 15 years. Overall: The Mainland China economy has grown a lot, but their stock market is a terrible place to invest.

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

#587

Post by hazbot »

throwaway2037 wrote: post #586
mordymoop wrote: post #297

Earlier quoted context omitted.

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…

> The problem is that I have been seeing some version of the “crash imminent, sell everything” thesis for my entire life. What do you think is the root cause for this kind of thinking? It is hard-wired from childhood, or borne of (difficult) experiences? > Much better to just stay in the market, knowing that there will be crashes and you will have days where the numbers look awful, because they’ll look great again in…

`What do you think is the root cause for this kind of thinking?`

It's probably quite advantageous to have some individuals irrationally hedging against catastrophe--even though they are likely to be wrong, when one of them is very occasionally right the humans survive.

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

#588

Post by throwaway2037 »

SoftTalker wrote: post #313
mordymoop wrote: post #297

Earlier quoted context omitted.

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…

This is the reason dollar-cost-averaging works. You buy less (shares) when the market is high, and more when it is low, without thinking about it and without trying to "time" your transactions (which almost always fails unless you have inside info).

If dollar-cost-averaging is so great, why don't professional asset managers use this strategy? (Hint: They don't.) I think dollar-cost-averaging is an idea promoted to non-professional investors to help them manage the psychological burden of (initial) paper losses after making an investment. Assuming that very short term stock market performance is essentially random (long term: it is not), then the day after you make an investment is roughly 50/50: Am I up or down? Recall: The human brain wants to avoid losses much more than gains.

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

#589

Post by throwaway2037 »

carlosjobim wrote: post #573
stocknoob wrote: post #553

Earlier quoted context omitted.

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.

Dear Internet Stranger (who is also an amazing investor): Have you considered starting you own hedge fund? If not, are you willing to share some of your best investments in the last few years?

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

#590

Post by throwaway2037 »

usefulcat wrote: post #364
CocaKoala wrote: post #320

Earlier quoted context omitted.

I remember at one point a couple years ago, I saw a thread on the Bogleheads forum where people could basically call their shot on market crashes; they would post and timestamp when they exited the market and when they re-entered, so that people could go and calculate if the timing was correct or if they lost money by missing out on market growth. I might not have the dates correct, but I remember the general strokes…

> He buys back in at what ended up being the absolute nadir of the market in like april 2020 or something. The rare success story of timing the market, you love to see it. The stock market usually goes down faster than it goes up, which makes it slightly easier (well, less difficult anyway) to time the bottoms than to time the tops.

    > The stock market usually goes down faster than it goes up, which makes it slightly easier (well, less difficult anyway) to time the bottoms than to time the tops.
As the saying goes: "Elevator down; escalator up."
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