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Stocks Up $1T Since October

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Re: Stocks Up $1T Since October

#91

Post by WalterBright »

koonsolo wrote: post #85
WalterBright wrote: post #25

Earlier quoted context omitted.

I've been investing for 40 years. It's the same old story - there's no point in investing now, the market is as high as it will ever go. Fast forward a few years, there's regret one didn't invest, but now the market is as high as it will ever go, so not investing again. Rinse, repeat. A lifetime of missed opportunity.

It's all pretty straight forward math, but the problem is that people are not rational. I think it's really a personality trait that you can emotionally distantiate yourself from the numbers. On the buying side, you could spread out the buying over several chucks to "spread the risk", but again numbers show that the optimal strategy is to buy in 1 go, right now.

> I think it's really a personality trait that you can emotionally distantiate yourself from the numbers.

It's a conscious decision. What I do is think "what would my strategy be if I was investing Monopoly money". When there's a large divergence with what I do with real money, I then try to reconcile the two.

The more you can deal with your cognitive biases (such as the sunk cost fallacy) the better your investment decisions will be.

Again, this is a conscious choice. You're not a slave to your emotions - that's what makes people different from animals.

Re: Stocks Up $1T Since October

#92

Post by WalterBright »

robjan wrote: post #82
lliamander wrote: post #79

Earlier quoted context omitted.

Why so? I admit to being a novice in that area, but unless you are worried things are going to get drastically worse (civil war, etc) won't most stocks get better as the economy leaves the recession?

When you invest $100 and you see it go to $90, $75, $50, $40 at some point the majority of people will "cut their losses" and sell. It's human nature.

I call that "locking in your losses".

Re: Stocks Up $1T Since October

#93

Post by tarsinge »

nif2ee wrote: post #24

Thanks to the Fed and quantitative easing, many entrepreneurs and investors who became super rich thanks to this scheme are now spamming my youtube and twitter homepage about their wisdom in everything in life from artificial intelligence to history just because they think they are geniuses and entitled to teaching the poor souls with mental deficiencies (everyone who isn't worth at least tens of millions of dollars)…

Indeed, I think listening to rich people for wisdom in non-business topics, with the assumption that rich = smart, is quite specific to the US.

Re: Stocks Up $1T Since October

#94

Post by ekianjo »

loeg wrote: post #54
ekianjo wrote: post #20

Earlier quoted context omitted.

84% in value? or in denominations?

It's a quote of a quote of a quote of a 2016 figure from this paper: https://www.nber.org/papers/w24085 (It's value.)

If value, it's not surprising at all. Typical concentration vs long tail.

Re: Stocks Up $1T Since October

#95

Post by manigandham »

WalterBright wrote: post #89
manigandham wrote: post #81

Earlier quoted context omitted.

Sure but capital is the single biggest factor in market returns. More money means more ways to make more money by taking larger bets, using more leverage, waiting longer to turn losers into winners, and generally absorbing more risk to generate more return.

The leverage you can do is the same whether a small or large investor. Check out "margin percentage" on various brokerage sites.

It's not the same. For example, I have Portfolio Margin [1] which gives me much greater leverage than normal Regulation T accounts, and that's just as a personal trader. You unlock even more access and advanced strategies as you gain capital all the way up to 10s of millions.

1. https://www.tdameritrade.com/investment-products/margin-trad...

Re: Stocks Up $1T Since October

#96

Post by manigandham »

robjan wrote: post #90
manigandham wrote: post #87

Earlier quoted context omitted.

Robinhood lets you buy for $1 so yes you can start by investing that little. And $2/week from age 18 to 65 will give you $100k by just following the S&P. If you can buy lotto tickets then you can invest, and if you're buying lotto tickets then you're probably wasting other money too.

Please tell me what extrapolation you are basing this on? Even if you dump all the money into SP500 today and backtest that I can't get close to your figures unless I backtest against the recent bull market only.

Average annualized return rate for S&P is about 10%.

$8/month x 47 years @ 10% = 100k roughly.

Try this: https://www.daveramsey.com/smartvestor/investment-calculator

Re: Stocks Up $1T Since October

#97

Post by manigandham »

JumpCrisscross wrote: post #80
manigandham wrote: post #69

Earlier quoted context omitted.

Time in the market beats timing the market. You're describing all the rationalizations people use to stay out. 2008 was the bottom and it went up for 3 years. You would see that by 2012 so buy in. That's it. That's the entire rule/suggestion. There's no "timing the market" needed.

> That's the entire rule/suggestion. There's no "timing the market" needed. “Invest 3 years after an inflection point” is an attempt at timing the market. For every 2008, there are ‘54 and ‘57; ‘70 and ‘73; ‘80 and ‘81; et cetera .

Inflection points aren't timing, you recognize them after the fact. Literally when was the last time the market changed direction and what did it do for 3 years after.

It doesn't matter if it goes down again, once you invest you stay invested. The rule was a simple guide on when to get in. Or you can just stay out forever.

Re: Stocks Up $1T Since October

#98

Post by mbar84 »

blackrock wrote: post #84

Sometimes, I think there should be a law on how much money, wealth, assets, equities, and properties that people can have. Say, lock it down at $10 million USD, or to some ratio of the national minimum wage. Once you get that much, then you must tap out. Live the rest of your life in the sunset, but you can no longer accrue any more money or wealth. And if you want to accrue more, then you must be in some non-profit…

What do you think of Warren Buffet, Bill Gates or Elon Musk? It seems to me, that relative to their wealth they spend a negligible amount on themselves. I don't see them filling garages with luxury cars, building empty palaces, buying frivolous expensive watches etc. In other words, they're not binding up economic resources such that everybody else is materially impoverished. In no way do I see that they are slaughtering us and to the contrary, it seems that they are effectively stewards of the wealth that they have accrued. I don't think it's a horrible system for those that have proven themselves in the past to be good stewards, to continue to be allowed to do so.

Even if I'm wrong about my judgement of any individual or even if these people are not representative, could you think about modifying your position to at least focus on the principle I'm trying to get at: A billionaire who lives like a pauper, should not be treated the same as one who lives like a spoiled prince. You could for example advocate for luxury consumption taxes on mansions, yachts, cars, jewelry etc. rather than taxes on capital.

Re: Stocks Up $1T Since October

#99

Post by wcoenen »

I only got interested in investing at the start of 2018, and I was very nervous at the time about getting into a bull market that had been going so long. But at the same time, I was also nervous about inflation and not putting money to work.

So I went for an all-weather portfolio. This has allowed me to sleep well at night while staying invested (and even adding to my investments).

Re: Stocks Up $1T Since October

#100

Post by [deleted] »

manigandham wrote: post #96
robjan wrote: post #90

Earlier quoted context omitted.

Please tell me what extrapolation you are basing this on? Even if you dump all the money into SP500 today and backtest that I can't get close to your figures unless I backtest against the recent bull market only.

Average annualized return rate for S&P is about 10%. $8/month x 47 years @ 10% = 100k roughly. Try this: https://www.daveramsey.com/smartvestor/investment-calculator

[deleted]
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