patrick.net

I'm aware that most investors don't get the results of the mutual funds themselves.
This is because often people buy a fund after it has a good return and it's touted in magazines like Money.
It doesn't usually get the same return and the impatient investor may sell it.
Either way, the investor didn't get the same return as the fund. He bought it too late.
There are some excellent fund managers however; Primecap in Pasadena, Wellington in Boston, William Danoff at Fidelity come to mind.
Get out of stocks when you have 5 years to live and you want to spend it all.

mell says

Long term this should always work. But let's be fair, obviously dead investors do best because alive investors often sell for other reasons, they want to buy a car or house, kids education,
there's a costly divorce or healthcare expenses, so it's not always that they try and time the market, but simple necessity to liquidate.

I've heard the same about long term multi decade buy and hold investors, not necessarily dead investors, that they outperform active investors. I've read that a few times, and it was always stated like it was some long established fact.

I've thought a lot about why this may be. One thought is that the majority of price movement is just too difficult to predict, making market timing and/or stock selection a losing proposition for most.

Another thing that sticks out to me is w/ buy and hold, noob or pro, they will perform the same, because the strategy is mostly fixed. But, for active investing, while maybe pros outperform by some margin, the underperformance of noobs yolo'ing may drag the group average down enough to be worse than buy and hold. If you have more noob dollars than pro dollars, that can easily drag the group down.

I can also say that I've yet to meet an active trader who actually correctly tracks their CAGR (its difficult). I'm sure pros do, but every retail investor I've spoken with who claims to smoke the s&p ignores the time they spend in cash, and instead only calcs gains when invested, which isn't right.

Hircus says

only calcs gains when invested

How else losers can claim their bragging rights!

clambo says

Get out of stocks when you have 5 years to live and you want to spend it all.

That's a big problem though. How to tell how much time you have left to live?

mell says

I would have taken the money and ran when shop hit almost 1500

That's a similar problem. How to know that that was the best recent point to sell?

Maybe timing is the biggest problem for all investment questions.

Patrick says

clambo says

Get out of stocks when you have 5 years to live and you want to spend it all.

That's a big problem though. How to tell how much time you have left to live?

I'm gonna blow it all on fixodent!

i bought a shit ton of stocks....hoping for a rebound

Patrick says

clambo says

Get out of stocks when you have 5 years to live and you want to spend it all.

That's a big problem though. How to tell how much time you have left to live?

mell says

I would have taken the money and ran when shop hit almost 1500

That's a similar problem. How to know that that was the best recent point to sell?

Maybe timing is the biggest problem for all investment questions.

That may be true, but once you made a multibagger, say 10x or more on a stock it becomes harder and harder to double. People who buy aapl, shop or tsla today will never experience the appreciation you had when you bought shop or tsla early on. So it makes sense to sell and move to another newcomer or simply low valued "undiscovered" stock. Of course if there are dividends it's not that straightforward and the risk of losing is more significant with a newcomer. But why would you buy 1 share of shop at 1500 when you "only" make 1500 once it reaches 3000 and its already high valuation has to double for that.

Investment firms do not sell people on what is good for them. They sell what is easy to sell. The financial press has been touting Index funds for the last couple of decades. There are now more index funds than there are stocks trading on the NYSE.

In the US, the household sector of the economy saves/invests about $1 trillion per year, With a GDP of about $20 trillion (that declined about 4% last year), the sheer amount of malinvestment is staggering. The record breaking additions to the stock market based on rising margin balances puts this even more outta wack.

Misc says

Investment firms do not sell people on what is good for them

Why should investment firms be any different than sugary drink companies, junk food companies, tobacco, etc.?

the dip in stocks wont last long....glad I grabbed stocks at a discounted price....with the stimulus package approved, I would expect stocks to go up

G36 says

.with the stimulus package approved, I would expect stocks to go up

Because your typical stock investor is eligible for the stimulus???

zzyzzx says

G36 says

.with the stimulus package approved, I would expect stocks to go up

Because your typical stock investor is eligible for the stimulus???

You think people earning less than $75K don't invest? I bet the majority of RH "investors" fall into that bracket.

money printing inflates asset prices. If you havent understood this one yet, I cant help.

You gotta be crazy to put your money at the top into stocks like tsla with a pe of 100000000000000000000000, just be careful pls. I'd only go for value and inflation proof stocks here. Rising rates will bring down tech even more. This may "only" be a correction, but I don't expect much besides sideways trading for a while from this market.

tesla was one of the stocks i bought on the dip :) we'll see if i lose out on this one.

G36 says

tesla was one of the stocks i bought on the dip :) we'll see if i lose out on this one.

It was a great stock to get in early and destroyed many shorts. I don't think even now that many shorts are left so this may be genuine selling. But it dipped quite hard and may be able to sustain from here on, a lot of it will also depend on whether rates will stay relatively low. Everyone now piling into Dow stocks.

GME🚀
I wish I had gambled big money.
I would buy more AAPL but I have too many shares already.

clambo says

I would buy more AAPL but I have too many shares already.

thats the right mindset though....buy the dips

G36, I had a little old lady neighbor who was richer than god from stock investing.
She was 97 the last time I saw her, she fell and passed away in the hospital.
Anyway, she would not sell on dips. She said that dips were temporary at least for the stocks she owned.

If I had balls, I would buy more AAPL using my margin and sell after it goes up 20 bucks/share.

There are probably other strategies that I can use, but I’m lazy to study the subject.
I was thinking about Apple LEAPS, and other calls etc.

I told my brother (has cash) about GME when it was like 50 bucks “buy GME. Do it today.”
He chickened out and now he has pussy remorse, he says he will not wait the next time.
He’s watching GME all day long 🤑

I told him to buy ROKU after the IPO and then GME a week ago.
He thinks I have a crystal ball, but both are one time opportunities.

FuckCCP89 says

zzyzzx says

G36 says

.with the stimulus package approved, I would expect stocks to go up

Because your typical stock investor is eligible for the stimulus???

You think people earning less than $75K don't invest? I bet the majority of RH "investors" fall into that bracket.

The one share of Apple or GME, or anything else is insignificant. I own shares, including Apple by the thousands.

you own a few thousand of shares of Apple and other tech companies? Nice! In your 401k or investment account?

I have been buying into this dip. If this corrects further, I have to keep buying.

clambo says

Anyway, she would not sell on dips. She said that dips were temporary at least for the stocks she owned.

exactly what I tell myself.

I only buy tech stocks on red days and I love corrections like this.

But, life changing money is made with higher risk plays. (not mention the B word here.......*Bitcoin*)

All my stocks holdings are long term plays. I cannot see a scenario where Tesla, Apple, Nvidia are trending down for 5-10 years.

Nvidia is part of pretty much every aspect of EV's. The EV market is going to explode within the next 2-3 years. Considering marketcap etc., I wouldnt be surprised if Nvidia hits 750 dollars in the next 1-2years.

I’m more excited about Apple than Tesla.
People actually buy a lot of Apple products and Apple makes a lot of money, while it crushes the competition.
$500/month/33 years is a million bucks, but it’s getting rich slowly using mutual funds.

I get it. Apple is a sure bet IMO.

I love buying my wife (and myself) Apple products. The last apple phone (pro max) has a mind blowing cam.

It's hard to argue with people who made a lot of money on Apple. I know several of them.

But personally I would not buy Apple because it's already the most valuable company on earth. Well, maybe second to Saudi Aramco now.

Like, is Apple going to go from $2.2 trillion to $4.4 trillion?

Apple went from about $800 billion to $2.2 trillion with declining sales and profits.

With the way income taxes have been going for major corporations, there is just no ruling out a negative income tax for corporations

Add in negative interest rates, and anything can go.

holy crap.....Tesla up 19% today :)

glad i bought tech stocks on the dip....thanks for the gift!

G36 says

All my stocks holdings are long term plays. I cannot see a scenario where Tesla, Apple, Nvidia are trending down for 5-10 years.
Nvidia is part of pretty much every aspect of EV's. The EV market is going to explode within the next 2-3 years. Considering marketcap etc., I wouldnt be surprised if Nvidia hits 750 dollars in the next 1-2years.

I never thought about the chip demand from self driving / high tech cars. That's a good point.

While I think the risk is pretty low near term, if some influential countries like the usa were to take a stance against crypto, I'd imagine this would crush nvidia and amd because they wouldn't be selling gpu's at anywhere near their current rates and forecasts.

Hircus says

if some influential countries like the usa were to take a stance against crypto

doubt it to be honest.
The US doesnt stifle innovation. elected officials approved the first crypto bank (federally chartered). Top 500 fortune companies hold BTC on their balance sheet. They got too much power. Even banks are now in on crypto. This will be big. BTC is no treat for the US Dollar. It will never be a day to day currency.

https://www.cnbc.com/amp/2021/03/08/how-the-young-plan-to-spend-stimulus-checks-deutsche-bank.html?__twitter_impression=true

A survey from Deutsche Bank has given an insight into how much cash from U.S. stimulus checks might find its way into the stock market.

Responses to the survey of 430 retail investors showed that half of 25- to 34-year-olds plan to spend 50% of their stimulus payments on stocks, leading the German investment bank to state that "a large amount of the upcoming U.S. stimulus checks will probably find their way into equities."

Meanwhile, 18- to 24-year-olds involved in the survey planned to use 40% of any stimulus checks on stocks, and 35- to 54-year-olds surveyed planned to use 37% of their checks on equity market investment. The over-55s surveyed said they'd put only 16% into stocks.

Patrick says

Responses to the survey of 430 retail investors showed that half of 25- to 34-year-olds plan to spend 50% of their stimulus payments on stocks, leading the German investment bank to state that "a large amount of the upcoming U.S. stimulus checks will probably find their way into equities."

exactly! The very next day when the stimulus package was approved/announced, stocks rallied.

My Nio, Tesla and Apple went up nicely. That dip was a gift.

Patrick says

A survey from Deutsche Bank has given an insight into how much cash from U.S. stimulus checks might find its way into the stock market.

Must be nice for those that get them. Not you Patrick, but you're welcome for those that receive them. And even if you do, it's not your fault. This shit is completely bogus though and the system is corrupt. Sick of it. I won't get the free money as usual, I just pay for it.

@WookieMan,

there is a wise saying: If you cant beat them, join them.

I'll translate: money printing and low interest rates inflate assets.

If you understand that, you are already ahead of many. I'll translate again: Buy assets (Stocks, RE, Bitcoin).

G36 says

If you understand that, you are already ahead of many. I'll translate again: Buy assets (Stocks, RE

Yes, I'm ahead of most. Your point? I have no interest in receiving a stimulus check. We need to open back up 100% and stop the welfare. Any inflation will work itself out and the debt is the debt, we won't be repaying it.

We're creating an unequal society that is going down the shitter between race issues, money issues, censorship, covid, government debt, etc. This is just more bad and I'm one of the 2 in 10 that pay 5 figures in federal taxes. Pisses me off.

Sorry, but I won't be joining the stimulus check crowd anytime soon.

good! As an asset holder you should not be too sad about stimulus. you benefit in higher asset values!
Again, if you cant beat them join them. Buy and hold assets.
Wild guess here.....usually, the people that complain the loudest have the smallest portfolios....;)

G36 says

good! As an asset holder you should not be too sad about stimulus. you benefit in higher asset values!

My taxes will go up. I have no choice and that money is gone. 50% of the people getting stimulus checks don't pay any federal taxes. Probably 60% pay less than $2,500. It's a negative feedback loop. Which poor people don't understand. Why should I have to make more to pay for the poor? It disenfranchises producers and makes the lazy poor more poor.

You can time it and make money for sure. The day of reckoning will come though. Who knows when. When the doers will shut out the takers. Occasionally worked in inner city neighborhoods in housing. The vast majority of those poor are likely to get $4-5k from this stimulus. They WILL piss it away. Our society is going to shit. Media and Hollywood are at fault. Part of my animosity towards CA. That place should be destroyed.

I’m against the waste of $1,900 billion of taxpayer money because it will not stimulate the economy and will cause an inevitable increase of taxes to just pay the interest on it.

About 1/2 the population have investments and savings, the other 1/2 lives month to month.

The $1,900 billion divided by American adults would be about $6,000 each.

$6,000 bucks per person would likely stimulate the economy for a while but could postpone people working again so in the long run it’s likely bad.

I’m yelling at everyone to invest because you will need more money in the future than before the gigantic government money spending recently.

Roth IRA and Health Savings Account invested in stock mutual funds are a must.

“Get mad you faggots!” Glengarry Glen Ross

clambo says

I’m yelling at everyone to invest because you will need more money in the future than before the gigantic government money spending recently.

Roth IRA and Health Savings Account invested in stock mutual funds are a must.

100% agree. Not investing in assets like stocks and RE is not an option. You'll continue to lose.

I would caution here, that rebound was strong but it came from a 5 days non-stop selling streak and it likely not going to last. While people should always have some money invested and diversified now is not the time to indiscriminately buy stocks, esp. not tech - IMO.

clambo says

’m yelling at everyone to invest because you will need more money in the future than before the gigantic government money spending recently.

There is no guarantee that the inflation will show up in high growth momo tech stocks which benefit from low rates, maybe better to invest in Dow / agriculture / energy stocks now.

That being said, the recent volatility is a perfect environment for day trading which has been muted during the long and boring decade long run-up since the 2008 recession.

@mell,
i get your comments but I am wondering what your timeline is? For me, investing in stocks is always long term. I am not a trader at all.
what are your thoughts on the growth of the EV market within the next decade? How should I think about the expectation that a boom in the EV market translates into higher stock valuation for companies that play in this market? (Nvidia, Nio, Tesla, GE, F, MSFT and many others)