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This documentary is fairly good for explaining why a lot of athletes end up broke https://www.youtube.com/watch?v=TSOAwNSv8EM .
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Jul 8, 2014 11:21
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The biggest mistake that I know someone personally made was a guy I worked with who owned a lot of bitcoins. He wasn't a bitcoin freak, he had thought they were neat, mined about 2k of them when he was paying split electricity during college and forgot about them. Back when they hit $180-200 for the first time I mentioned it to him casually (not knowing he owned any) and he almost started hyperventilating. At that time, 24 hours earlier they had been worth ~350,000 or so, and had gone down, but were still worth a lot. He started making arrangements to sell them, and sold (I think) all 2000 of them at $65/ea. They were worth $1k/ea less than a few months later and still are at $600/ea. That's financial independence, lost to finding out they were worth anything and selling at the bottom of a crash.
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Jul 8, 2014 14:03
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Anyone who walks away a richer person after dabbling in Bitcoin is a winner. The market will eventually crash and they will be worthless.
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Jul 8, 2014 14:06
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Nocheez posted:Anyone who walks away a richer person after dabbling in Bitcoin is a winner. The market will eventually crash and they will be worthless. And even now, though the so-called market price may be high, it's very difficult to cash out - your options are shady trading sites and localbitcoin, both of which are more likely to get you robbed blind than actually give you anything close to the "market" price. Especially if you're trying to sell a million dollars' worth. You'd attract all sorts of scammers and even if you find a legitimate buyer you're liable to crash the market halfway through the sale. Anyone who got out before Mt. Gox started freezing withdrawals should consider themselves fortunate. I'll take a real $120,000 over a phantom million any day.
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Jul 8, 2014 14:16
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Yeah I'd say walking away with 130k when he didn't actually buy any is a good scenario. He'd be "bad with money" if it was the stock market and he did that, but bitcoin will not last.
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Jul 8, 2014 14:18
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Please, I dumped $8k of Apple in 2003 that had been bought on discount in the first place. Don't talk to me about stupidity with that stock. I could blame the divorce, but not like I turned around and invested the half I got.
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Jul 8, 2014 15:13
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Alien Arcana posted:And even now, though the so-called market price may be high, it's very difficult to cash out - your options are shady trading sites and localbitcoin, both of which are more likely to get you robbed blind than actually give you anything close to the "market" price. Especially if you're trying to sell a million dollars' worth. You'd attract all sorts of scammers and even if you find a legitimate buyer you're liable to crash the market halfway through the sale. Plus selling that many Bitcoins at once would crater the market, the demand for bitcoin at $600 is extremely shallow.
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Jul 8, 2014 15:48
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Along those lines, I remember back in 1994 I met a guy who was bragging about how his wife bought Microsoft stock back in 1987, and how it had split and grown so much in that time. I remember wishing I was smart enough to buy some back then before they were huge, and how it was pointless to buy now because they really weren't going to grow much anymore. If I had just bought a thousand bucks worth in '94 it'd be worth over a million today (if I'm doing my math right).
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Jul 8, 2014 15:51
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And if you'd been able to tell the future you could have prevented 9/11.
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Jul 8, 2014 15:58
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Guys what should I invest in now to be rich in 20 years.
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Jul 8, 2014 16:47
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This was posted by a friend on facebook a few weeks ago...I started typing up a reply about confirmation bias and timing the market but decided it wasn't worth it.quote:I wish I were the kind of person who played the stock market. I heard about Tesla and thought they sounded like a solid company. I looked up their stock price on my phone out of curiosity and now Google Now keeps me updated on the price. I read the news about Tesla releasing their patents into the public domain and thought "Normally that's a stupid thing to do, but in this particular case it's a pretty clever move. I bet their stock will go up soon." At that time, it was $200 dollars/share. In the past few days, it's shot up to $233.
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Jul 8, 2014 16:52
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Hmming and hawing about stock just isn't worth it. You can't tell the future and most of the time there's better things to do with the money. Nothing wrong with cashing out to buy a house. The stock market, in my opinion, is literally just an online casino. The company my husband is employed at pays partly in stock. It's infuriating at times because despite beating earnings expectations regularly, their stock will always go down after a report. He's only got a few 2 week windows to sell every year and they're always after those earning reports. We cash out every single round because you shouldn't be investing in the same place where you make your regular income because if they go tits up, you go fully tits up. However we can sometimes feel a bit of regret over the stock being $24 in 2005 and $400 as recently as last year.
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Jul 8, 2014 16:57
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The only stock decision I've ever cursed myself for is not buying Citi when it was like a dollar or less, and mostly in a "man, what if" way because I only had like $300 at the time. The only financial decision I kick myself over is the 3br condo across the street from my old apartment in Boston that sold for $83,000. The bitcoin thing wasn't really "bad with money" because getting something for nothing is great, he just missed out on plenty more if he had sold literally any other day over the past year, I'm pretty sure they were only ~60-80 for a day or two.
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Jul 8, 2014 17:22
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xie posted:The bitcoin thing wasn't really "bad with money" because getting something for nothing is great, he just missed out on plenty more if he had sold literally any other day over the past year, I'm pretty sure they were only ~60-80 for a day or two. Nah don't worry about it. Bitcoin's highly irrational, and the price you can actually cash out at and the price everyone reports as being the bitcoin price can be two completely different things. There's a series of posts floating around of a goon's friend trying to cash out, and it's a bunch of retarded adventure. A guy tried to pay in unactivated Amazon gift card, for example. I think it's on buttcoin.org.
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Jul 8, 2014 17:26
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FrozenVent posted:Nah don't worry about it. Bitcoin's highly irrational, and the price you can actually cash out at and the price everyone reports as being the bitcoin price can be two completely different things. That guy was in canada, apparently it's a lot easier in the us.
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Jul 8, 2014 17:28
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xie posted:The biggest mistake that I know someone personally made was a guy I worked with who owned a lot of bitcoins. He wasn't a bitcoin freak, he had thought they were neat, mined about 2k of them when he was paying split electricity during college and forgot about them.
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Jul 8, 2014 18:29
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I'm going to interrupt the always entertaining bitcoin talk with more tales of financial woe: A real close family friend who is 68 years old and was a USPS mail carrier for around 30 years. In around 2000-2002 or so he and his wife decided to take take out a loan on their fully paid off house (worth around 160k or so) to do remodeling. This included an expensive fence around their property, a large sunroom addition with patio deck, and interior decorating. They also purchased a new pickup truck that same year. Their financially responsible adult daughter with her own family begged and pleaded with them to not do this but to no avail. Prior to this loan they were getting ready for retirement with a paid off house and just a year before had at least 100k combined income in a very low cost of living state. 2007 the wife dies from a combination of lung cancer and other chronic lung problems from decades of smoking. Her health was already on the decline way back in 2000 and she was already on oxygen. Widowed husband sinks into a deep depression and spent his retirement days watching t.v. and generally living a very unhealthy lifestyle for an overweight diabetic. He finally got a part time job a few years later as a security guard. Things were looking up and he was paying down his loan obligations only to get fired after crashing the work truck. 40 year old part time contractor/mostly unemployed son with a history of drug problems and 2 teenage kids gets divorced and decides to move in with pops again. Son sponges off dad's meager benefits and stuff goes "missing" around the house including 2 antique firearms which somehow got pawned off. House is in awful shape with dogs running around pooping everywhere and generally looks like a disaster. Interest is piling up fast because he can only make minimum payments. Worst case scenario he can't even really sell the house and recoup equity because it's in such a sorry state. Just getting the house into listing condition would cost tens of thousands. He has a hoarding problem and buys new fishing rods and expensive bait that will never get used and stores it up for his "next trip" which he can't afford to go on. He also owns a small fishing boat. I'm afraid this story will have no good ending to it. I wish I could help but I know any monetary assistance will just get pissed away on any number of ridiculous things. So when I visited them last year all I could do to help was repaint a wall, buy groceries, and clean up a little around the house.
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Jul 8, 2014 19:11
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Tigntink posted:Hmming and hawing about stock just isn't worth it. The price is tanking at that time because everyone is selling the stock at that time (because of the window). The people who made that policy are probably buying the stock back at the cheaper price and making bank.
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Jul 8, 2014 19:45
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Tigntink posted:Hmming and hawing about stock just isn't worth it. 
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Jul 8, 2014 19:53
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Selling/buying stocks isn't really bad with money. Oh you sold too early you're so dumb! Oh you sold too late god what a moron.
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Jul 8, 2014 21:10
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gently caress it, I'm counting this as people bad with money. Goon finds money and immediately wants a gaming PC:The Iron Rose posted:Hi Goons! So I just found a $5000 Romanian Lei note abandoned on the ground, which google kindly informs me is worth around $1,650 Canadian. The Iron Rose posted:It wasn't actually on the side of the road. I used the words abandoned on the ground as a way to communicate the sudden windfall, blah blah blah, bad choice of words. It's old and dirty and I found it stuck in one of the AC vents in my house. I like to think I'm not nearly dumb enough to steal money and brag about it. Though I didn't actually know that picking money off the street was illegal though, so... learn something new every day? RandomAction Man posted:Sadly I have to inform you that there is no 5000 new Lei note, the one you found is from the 90s early 2000s. 5000 old lei equates to 0.5 new lei. And around 3,5 lei would be the value of one canadian dollar or something like that. Star War Sex Parrot fucked around with this message at 02:17 on Jul 10, 2014 |
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Jul 8, 2014 21:14
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Duck and Cover posted:Selling/buying stocks isn't really bad with money. Oh you sold too early you're so dumb! Oh you sold too late god what a moron.
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Jul 8, 2014 21:26
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If you're buying individual stocks with money you can't afford to lose, you are insane with money and have a risk profile akin to running through the zoo's tiger enclosure wearing only a meat bikini. Every one of your workplace "stock gurus" is lying to you. If he was making so much money on his stocks, why is he working here like the rest of us schlubs? They're proud to tell you about how they made $5k trading Dr. Pepper stock, but never share the stories about how they lost $25k on HP.
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Jul 8, 2014 21:57
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Cicero posted:It is if you're the sort who goes "oh man this stock market crash, guess you can't trust the market, time to pull everything out!" like a lot of people apparently did at the bottom of the last recession. That's pretty much what my dad did this past February when the market dipped. He then bought into AAPL before the split. We're talking for large amounts in both transactions. Only reason why his IRA has money is because he did a massive bet on Ford when it went down to $1.
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Jul 8, 2014 21:58
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Star War Sex Parrot posted:gently caress it, I'm counting this as people bad with money. Goon finds money and immediately wants a gaming PC: This is just awesome.
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Jul 8, 2014 21:59
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LloydDobler posted:Along those lines, I remember back in 1994 I met a guy who was bragging about how his wife bought Microsoft stock back in 1987, and how it had split and grown so much in that time. I remember wishing I was smart enough to buy some back then before they were huge, and how it was pointless to buy now because they really weren't going to grow much anymore. I don't think you're doing your math right.
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Jul 9, 2014 00:27
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Harry posted:That's pretty much what my dad did this past February when the market dipped. Yeah, but what if it kept crashing? Here's a fun question: what if I had a crystal ball that tells me when a stock is about to rise 50% in value within a month, but is only right 50% of the time, and the rest of the time the company goes bankrupt. Can I reliably make money using this crystal ball?
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Jul 9, 2014 01:24
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baquerd posted:Yeah, but what if it kept crashing? That sounds like a GMAT question. No. The expected value is only neutral if your crystal ball is predicting stocks that will double.
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Jul 9, 2014 01:41
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baquerd posted:Here's a fun question: what if I had a crystal ball that tells me when a stock is about to rise 50% in value within a month, but is only right 50% of the time, and the rest of the time the company goes bankrupt. Can I reliably make money using this crystal ball?
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Jul 9, 2014 01:44
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baquerd posted:Yeah, but what if it kept crashing? Does the stock go bankrupt within a month as well? If yes then E[X] = 1.5(.5) +0(.5) = .75, so no it wouldn't seem like you can make money (Though I would assume Puts and Calls wouldn't reflect the 50% increase or ruin theory, so you could make a bet on the greater than expected volatility). If the Stock does not go bankrupt within a month, let's assume on day 32 it's worth it's original value. So now if you always pull out on day 32 you have: E[X] = 1.5(.5)+1(.5) =1.25 A money-making machine! So the break-even point would be half the stocks maintaining their original value on day 32.
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Jul 9, 2014 01:47
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baquerd posted:Yeah, but what if it kept crashing? Probably would have just bought in 5% lower and then sold when it went down again, thus really accomplished nothing.
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Jul 9, 2014 01:52
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Star War Sex Parrot posted:gently caress it, I'm counting this as people bad with money. Goon finds money and immediately wants a gaming PC: This is amazing and should be in the Shadenfreude thread, if it's not already (I'm a few days behind).
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Jul 9, 2014 02:12
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baquerd posted:Yeah, but what if it kept crashing? How did everyone get this wrong? Yes, you can make money by shorting as much of the stock as you can. E(Price after 30 days) = .5*1.5p + .5*0 = .75p, so on average the stock will go down in value, and thus you can make money by shorting it.
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Jul 9, 2014 02:21
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Jeffrey posted:How did everyone get this wrong? Yes, you can make money by shorting as much of the stock as you can. E(Price after 30 days) = .5*1.5p + .5*0 = .75p, so on average the stock will go down in value, and thus you can make money by shorting it. Are you sure you want to short the stock, or would you rather buy put options, or perhaps write call options?
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Jul 9, 2014 02:34
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baquerd posted:Are you sure you want to short the stock, or would you rather buy put options, or perhaps write call options? May as well take all the liquidity there is in any derivative that bets against the stock as long as you have the capital to back it if you're wrong. (Tell me if I'm misunderstanding something, the question seems pretty straightforward.) EDIT: You'd buy puts with a strike price above .75p as long as the cost of the option isn't more than the difference. You can also write call options with a strike price above .75p and sell as many as you can cover. Jeffrey of YOSPOS fucked around with this message at 02:41 on Jul 9, 2014 |
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Jul 9, 2014 02:35
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You actually want to buy credit default swaps hedged with naked call options.
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Jul 9, 2014 02:59
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baquerd posted:You actually want to buy credit default swaps hedged with naked call options. Yeah that makes sense, I would not have thought to bet on the bankruptcy itself.
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Jul 9, 2014 03:17
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I am dumb. Of course you can make money if you can accurately predict a movement, even if you aren't buying/selling directly 
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Jul 9, 2014 17:54
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canyoneer posted:I am dumb. Of course you can make money if you can accurately predict a movement, even if you aren't buying/selling directly Oh, well, if you aren't buying or selling directly, it gets a lot easier to make money. Just claim to be an expert and sell newsletter subscriptions. Now you don't even have to be accurate.
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Jul 9, 2014 18:04
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xie posted:The only stock decision I've ever cursed myself for is not buying Citi when it was like a dollar or less, and mostly in a "man, what if" way because I only had like $300 at the time. As for bankruptcies, they do things very different now than when Chrysler went bankrupt in the 80s. Back then, if the company recovers, the stock recovered. Nowadays, the good assets and good liabilities go into a new company, the old company is still represented by the old stock which declines into the pennies. Eventually the new company, which still uses the old name, goes public and the old investors are left with belly button lint. Probably the best example of this is GM. Several of the "bets" I made on stuff that dropped to a dollar went away in exactly this fashion. I no longer buy individual stocks. I've also sold off all but 2 stocks (BRK.B for sentimental reasons and FTR which has a good dividend). If my old model of buying stocks of companies filing bankruptcy was still accurate, things like FNMA and FHLMC would have recovered by now.
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Jul 9, 2014 20:26
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