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Well, yeah ARM is a totally different architecture, but you're right that other companies are combining CPU/GPU.
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Jan 22, 2014 18:50
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Gamesguy posted:Lol this is like the 3rd time for you isn't it? Having never made an options trade, I've seen lots of people post cropped screenshots like this but I never know what all the columns are. At a guess, I'd say that the 5 is how many options contracts you bought, that you paid $15.75 each (and I think each contract is for 100 options? So that's $7875, which is your cost basis) and that these are long calls with an exercise price of $335. Since NFLX is like $50 above that, when you exercise your calls you'll net ($50 x 500) - $7875 = $17,125? But I'm confused about the rest of the numbers. Leperflesh fucked around with this message at 19:12 on Jan 23, 2014 |
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Jan 23, 2014 19:10
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The key thing to understand with Apple, and which Jobs understood when he revitalized the company, is that it is the (only) luxury brand in personal computing. Every other brand has high-end products within their lineup, but Apple markets its products the same way brands like Mercedes and Versace do, and prices them accordingly. People don't buy ipods because they're "innovative," even though that's the word everyone uses: Apple's products have slick UIs, but they're not better-made or longer-lasting or higher-performance than the competition, and often they're well behind in all three categories. But they're lifestyle choices that people use to accessorize themselves in order to suit a particular personal image, and Apple's biggest innovation has been establishing and maintaining that perception through truly incredible (and incredibly expensive) marketing campaigns that are totally unmatched by any other tech company. My own take on Apple's stock is that Apple will remain a high-earning, viable company for as long as they can maintain their position as the only luxury computing brand. Another part of their marketing is the revelation of surprise products, and that's what a lot of Apple fanatics get really excited about... and of course when they do that, you see big moves in their stock price. But if I were an investor I'd really rather see stable growth rather than the company betting the farm on a completely new gadget that may or may not succeed. I think nebby is demonstrating one of the pitfalls in investing: it's often a mistake to invest in a company that you "love." Sure, if you're knowledgable about a particular industry and the players in it, and you think one company in particular is a standout, go ahead and buy... but you need to keep your emotional attachments out of your investing, and statements like this... nebby posted:Hah, I remember when the original Macintosh came out, and my first PC was an Apple //c, so yeah. ...strike me as big warning signs. I once bought shares in Meade, because I have a Meade telescope and I think the company makes great products and I was excited about astronomy. It was a terrible decision and I lost over half my investment. I wasn't making rational evaluations of the consumer telescope industry, or of Meade's competitive position within it. I did look at their P/Es and their quarterly reports and their volumes and so forth, but my whole analysis was colored and biased in advance by my personal feelings about them. nebby posted:Wow, you're right. I'll admit I was just assuming this since I literally haven't met a software engineer or academic with windows in years. My bad. This is not how you do fundamentals analysis. Leperflesh fucked around with this message at 20:41 on Jan 30, 2014 |
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Jan 30, 2014 20:38
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nebby posted:You can scan my other posts in the thread if you are honestly curious how and why me (and other folks) rightly saw Apple as a steal in the low $400's. Hint: we're not idiots for the most part in this thread. Plenty of people, probably including you, have posted excellent reasons for buying Apple, including their comparatively low P/E, strong cashflow, and quality leadership. I'd agree with all of those assessments. I just think it's a warning sign when I see someone apparently promoting a stock pick, in part, on the basis of nostalgia. quote:Also your assessment that Apple's success is largely due to marketing is laughable. I feel most consumer product companies live or die based on successful marketing. Poor marketing has ruined many a company that had excellent products, and many sub-par products have been successfully sold in vast quantities due to excellent marketing. Entire industry trends have been driven by marketing; for example, the 1990s rise of the SUV among automakers - less safe, less efficient, hugely overpriced, most customers never used their offroad capabilities - they were wildly profitable for a decade or two, entirely on the strength of a lot of really successful marketing campaigns that played on the American myth of the independent, rugged outdoorsman. In particular, luxury brands depend on marketing to do well. Luxury is all about perception; a $5000 Luis Vitton handbag is not even a little bit more useful than a $50 handbag found at Sears, and probably not even particularly better-made. This is not the place (YOSPOS is) to engage in detailed arguments about whether Apple's computing and consumer electronics products are, spec-for-spec, price/performance superior to competitive products... but I'm convinced they generally aren't, with just a very few exceptions. That leads me to the conclusion that their larger profit margins and higher prices are supported by the perception of luxury (and actual luxury, of course) that they market them on.
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Jan 30, 2014 21:10
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mindphlux posted:how do you guys trade differently in accounts that are tax deferred - IRAs/401ks? You don't have to pay capital gains on the front end, so what do y'all do to capitalize on this? my intuition is to do a lot more short term trading (I'm mostly long, aim for about a year period before selling anything I buy for tax purposes, unless there's a really compelling reason not to) - but I thought I'd see what others do. I suspect most people don't do active trading with the money they've earmarked for retirement.
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Feb 3, 2014 19:22
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mindphlux posted:what I'll elaborate, but just a little bit. You have a fixed amount of money you can add to your tax-advantaged accounts each year (assuming you're in the US). This is your IRA/Roth IRA and, if available, employer-sponsored accounts like 401(k)s. Access to withdrawal of these funds is generally restricted, too: you pay penalties for taking it out early, with a few specific exceptions. If you have any money left over in your monthly budget after covering your basic survival costs, you should be investing for retirement. You're going to need that money. It's important. So: first, you should probably be fairly conservative with your retirement funds. The younger you are, the more risk you can afford to take, but the general theme of your retirement investing should be socking away as much as you can, getting good annual returns over a period of decades, and not loving up your retirement by losing half of it somewhere. Importantly, if you do gently caress up and lose a big chunk of that money, you can't replace it because of the annual contribution limits. Even if you earn more money (in your job, or in your other investments) you can't exceed the contribution limits in a given year. OK, so if you're saving enough for your retirement - and that probably means maxing out all of the tax-advantaged options available to you - and you still have disposable income left over, then sure, play the stock market. You're taking on much higher risk than you would with the reserve you're keeping for retirement, but it's OK because you've done your duty to your future self by securing his comfort in old age, and now you can try your hand at beating the market and getting some extra income, build wealth, or whatever your goal might be. Now, there are scenarios where it might make sense to trade individual stocks in your retirement accounts. Baddog mentioned that he's using the fact that his retirement account is tax-advantaged by shifting that portion of his portfolio that involves lots of dividends into those accounts. But that's only possible for him to do because he has both a substantial (I assume) retirement portfolio, and tax-exposed investments, and he's probably also relying on the fact that his dividend-paying stocks are pretty reliable blue-chip type investments, and even then it's probably not the majority of his retirement funds. So, do this: Tony Montana posted:Basically, yes. But this is complicated and you'd do best reading something like the Four Pillars to really get a perspective on it. Maybe also read up in The Long-Term Investing and Retirement Savings Thread. Recognize that a lot of data shows that small-time individual stock market investors consistently fail to beat the long-term returns of a broad-based, low-fee index fund. Know what you're planning to do for retirement, how much risk tolerance you have with that money, and then decide if you really want to be trading on individual stocks using your tax-advantaged accounts. If so, nobody here is going to yell at you about it; it's your money, do what you want. I think it's fair to say though that nobody here wants to give potentially inappropriate advice to an investor who maybe isn't as clear as he should be on the overall topics of portfolio management, risk management, retirement savings, etc. e. Mindphlux, I just clicked the question mark and you've been posting/trading in this thread for at least a couple or three years, so I hope none of the above strikes you as condescending. Maybe it's just a post for people who wander into this thread and got the idea that day trading stocks with their IRA is a great plan, instead of just a post for you. Leperflesh fucked around with this message at 21:16 on Feb 4, 2014 |
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Feb 4, 2014 20:55
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mindphlux posted:so, you're talking about all this stuff about socking away money, and 'you can't replace it if you lose it in an IRA', and none of it is really ringing true to me. or at very least, none of it is sounding relevant to my point of 'hey make a ton of short term gains in your IRA account where you don't have to pay capital gains on short term trades' Well, fair enough: clearly much of it isn't relevant to you, but I think based on your description that you're not very typical of American investors. Specifically: quote:the IRA contribution limit thing is a relevant point - but not really for any smart investor. for instance, if you're self employed and have an IRA (I am, and literally anyone could be if they had extra money and wanted to do their best with 'socking it away') the contribution limit is something like $17,500, or 25% of net earnings up to $50k/yr. Most investors aren't self-employed professional investors, they're people working regular jobs who have a retirement account such as an IRA, and maybe some extra cash available that they're willing to buy and sell stocks with. Most americans have little or no retirement savings at all; a huge majority have less saved for retirement than they're going to need, and almost none have so much saved for retirement - but also make so much money per year - that they can afford to lose it all and then replace it in two years' time. The individual IRA contribution limit is $5500. If that's all someone is saving for retirement, even if they're young they should probably not be investing in individual stocks, and certainly not day-trading it. Buying a fund like VTSMX for domestic stock exposure, plus VGTSX for international stock exposure, plus VBMFX for bond exposure, and adjusting asset allocation according to their age and risk tolerance, is probably the best plan for most investors' retirement savings. A lot of middle-class investors also have access to a 401(k) or other employer-sponsored vehicle, but many of those plans have very limited choices - often all basically horrible - and most of them don't have access to individual stocks (beyond the employer's own stock) although that is starting to change (my own 401(k) lets me link to eTrade if I want to trade individual stocks within the tax shelter). So yeah, I think I'm probably not addressing people like you, who have $200k saved inside a self-employed IRA, can afford to save $100k a year if you want to, are only 30, and (I assume) have lots of money outside your IRA as well. quote:so like last year I contributed something like 13k to my IRA, and I felt like I wasn't even scratching the surface of what I could do. I've saved all my life pretty diligently, and feel like I could completely re-fund my IRA to its current balance in 1-2 years if I really wanted to for some reason. I assume you're talking about a SEP, not a traditional or Roth IRA. As I said, only the self-employed can access that, and you'd have to be making $200k+ a year in order to put $25k a year into it to restore $200k in four years (two years is only possible if you're getting incredible returns on your investments, clearly). That's far more than the great majority of people can possibly contribute to a tax sheltered retirement plan. At $200k per year, you're in the top 2% of earners in America. Yes, I've seen the thread title, rich jerks itt, but I didn't assume that you were one of them, and if you are, I'll reiterate that my original statement - that most people shouldn't be taking large risks with their retirement savings - is intended for people who aren't in the top 2% of wage earners in the country, at age 30. quote:I also don't understand why you think retirement money is so important, that you should 'sock' it away in a low interest ETF or mutual fund or something. It's money you won't (and pretty much can't) touch until you're loving 65 or something. why wouldn't you take the most risks with it, while the potential for the greatest payout (compounding interest, etc) is the greatest? and cumulative capital gains tax benefits will be the greatest? disclaimer, I'm 30. don't know what angle you're coming at this issue from. but again, I feel like my earning potential is going to be peaking within the next 5-10 years - why not take the most risk while I'm making tons of money and can easily afford to lose it? (or make massive gains?) There has to be some level of risk that is appropriate for someone's retirement savings. What is it? Would you suggest someone who is under 30 leverage their retirement savings? If so, by how much? Is 2x leverage too much? 5x? 10x? Do you think what these guys are saying is correct? Maybe you're familiar with this story about a guy who gave that a try, with disastrous results. I think the amount of risk tolerance someone should have with their retirement funds should be proportional to the degree to which they're A) adequate for their retirement needs and B) replaceable in the event of a significant loss. For the large majority of Americans, A + B = be very conservative, even when young. That means sure, 80% or even 90% stocks, in the form of well-diversified mutual funds, but certainly not leverage and certainly not day-trading. quote:in any case, none of the retirement-money-cautioning stuff really pertains to the 'take advantage of your tax-deferred accounts by doing short term trades in them' point, as far as I can tell. if you're going to be semi-actively trading, you'll be taking the gains and losses in one account or another, why not stick the short term gains in the tax deferred account? Goes back to the original point: most people can only put in up to $5500 (as an individual) for their IRA, and if they have a 401(k), that still only adds another $17,500 per year. At $23k a year, if you lose a chunk of it, you can't ever get that early money back in - especially if you were already going to be putting in the max every year while working. Not blowing your early contributions means getting the most out of them over a 35-to-40-year typical savings life. quote:ps - to your postcount comment, I'm 30, I've been trading individual stocks since I was about 15. I don't think I am particularly knowledgeable about trading, but have almost always done really well in my investments and am careful about my research in the sectors I invest in. I've taken my savings from 5k to 200k in those 15 years, with about a 10% return on average per year for my last 5 years. nothing you've said strikes me as condescending, because I'm always trying to learn. I decided to ask these sort of basic questions because I really don't know the answer to them, and why pretend that I do? I'm certainly impressed - most impressed that you were already saving at age 15. I was unable to save anything until several years after I'd graduated college (and finished paying off my student loans). I dabbled in stocks anyway, starting at age 19, but I'm talking about no more than a couple thousand dollars. I think it's very good that you're still earnestly asking questions, because I think overconfidence and hubris are the qualities that sink most investors that wind up getting sunk. Baddog posted:Jesus christ man. The standard advice for your retirement money (actually any money) is to throw it into an S&P ETF, so when someone says they are killing it with X% returns every year, its an easy (and accessible) thing to use to show them that maybe they aren't doing as well as they think they are. I did say "unless you are diversified into a lot of lower risk stuff", so its not like I'm ignoring the fact that maybe the S&P 500 isn't the best comparison for his particular case. Although I'm willing to bet the beta of his day-to-day portfolio is pretty drat high (given that he said "why wouldn't you take the most risks with it"), so I'm probably being very generous. Yeah I'm interested too, because I still don't "get" how saying "hey, if you'd put all your money into a well-balanced portfolio consisting of low-cost index mutual funds, such as the Vanguard funds listed above, you'd have been more diversified, taken less risk, AND have better returns, than the actual returns you've realized by trading individual securities" is somehow wrong or dumb. If I have $100k in my retirement account and I am getting (say) $18% annualized return over the last five years, while also enjoying the low risk implied by such funds, how is that not categorically better in every way, than someone who is pleased at earning 10% a year over those five years through active trading of individual securities? Shouldn't someone who did the latter at least be considering whether they should have done the former? I'm genuinely asking because I feel like there's some kind of real, coherent point to be made. I'm certainly not a sophisticated investor, I've done some reading and I've dipped a toe into the water from time to time, but I'm nowhere near where the pros in this thread are, but my life experience has been that quite often, the conventional wisdom is at best incomplete and at worst outright wrong. If the conventional wisdom is "stocks = gambling, just buy a low-expense fund and let it ride" then I'm definitely open to hearing exactly how that's wrong. Leperflesh fucked around with this message at 20:19 on Feb 5, 2014 |
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Feb 5, 2014 20:17
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mindphlux posted:I was a little too loosey goosey with my posting last night, so I feel like I should come clean and clarify at risk of sounding too much like a rich jerk itt - it's my wife and I's combined savings, and we have $200 total, like 80 in ira and 120 in stocks. So replenishing that wouldn't be nearly as mouthdroppingly difficult as 200k in an ira account by myself - which lol I wish. Good lord no, and just to be clear, I'm coming from a position of some knowledge on this issue. My wife is an artist, and we tried running her art practice as a business. However, you must make profits three years out of five, looking backwards, so when she failed to make a profit in the third year (in 2012), we had to stop declaring her practice as a business. Now her art income is "hobby" income, which means we can offset expenses only up to a max of her gross proceeds from the "hobby". Running her as a business allowed us to offset income (including income from our regular jobs) with business expenses. She could also have opened a SEP IRA or solo-401(k), but you can only put into such vehicles money that is from your net profits, e.g., after deducting your expenses. So if you knit sweaters as a hobby and sell them on etsy, and you make $1000 free and clear above your expenses, than you can put at most $1000 into a retirement savings vehicle. Since the two of us both have jobs with 401(k)s on offer, and we have access to ordinary Trad IRA/Roth IRA as well, and we don't have enough to max those options, it would never have made sense to make use of the self-employed options... but it wouldn't have worked for us regardless since she wasn't making a profit. It really is the case that for the majority of people, $5500 per person is the most they have access to for tax-sheltered investing. The (substantial) minority with employer-sponsored plans available, can add another $17.5k to that, but usually with limited investment options (a looooot of people have lovely 401(k)s with nothing but high-expense-ratio lovely funds, often with extra fees tacked on as well). quote:anyways, this is the interesting part. You're asking about risk, but I wasn't really advocating any particular amount of exposure to risk - just wondering if it'd be advantageous to do your active trades in your retirement accounts. I'll concede the point that investing in individual stocks is inherently 'more risky' than investing in a fund, just because of diversification - but that point aside, I don't think there has to be a great deal more risk involved. And I certainly wouldn't know how to objectively or subjectively quantify that risk. and I don't think just the argument of 'hey, risk' is compelling enough to make it worth just completely ignoring the potential benefit of not paying capital gains on what would normally be short term games. again, if I'm understanding everything correctly. Well, I tend to agree then: certainly if you're in a position where you have large non-sheltered savings, and you're treating all of your savings as "for retirement", it could make sense to move some of your active trading into your tax shelter by swapping them for some more conservative investing outside your tax shelter. For example, if you're going to invest in one of those bond funds that specializes in low tax consequences anyway, might as well do that outside your shelter and move some active trading inside your shelter. Having the ability to push $25k+ into your shelter every year certainly makes that more viable as well. As for taking out loans: I can understand where you're coming from. I have a mortgage, but at least it's above water secured debt in a non-recourse state. My wife's outstanding student loans are much more problematic (they're non-dischargeable in bankruptcy) but what was I going to do, tell her she can't go to grad school? So for a while now we'll have to focus on house and debt, and that makes me more conservative with my retirement funds (I'm 39, too, so probably just ~25 more years to save for that, so I'm about 30% bonds/70% stocks right now). I'd probably be inclined to take on more risk if I had less debt. I will just say one more thing on the topic. If you have a certain amount of money saved for retirement, and if you're worried (as most Americans should be) that it won't be enough, that worry probably affects your psychology when you make trades using it. One reason to advise people to park their retirement money into very long-term fund positions and then just rebalance it annually, is to help to remove the temptation to react to short-term events out of fear. If you're putting money into your 401(k) every month, you want to be buying when the market is down, not getting scared and fleeing to cash. Lots of people make terrible decisions with their retirement money out of fear. I'm sure there's statistics out there for how many people who are 5 to 10 years from retirement who went to cash in 2009 and then completely missed the market recovery in the last three years. Those people may have cut themselves out of a 30%+ gain in assets, right before retiring, and they'll have little chance to regain that. They bought high and then sold low, out of fear, because they knew their livelihood was at stake. People who actively trade need to be very disciplined, I'm convinced of that, and I think it's easier to maintain that discipline if you're trading with money that you can genuinely afford to lose. For most people, their retirement money does not fall into that category. Anyway this was an interesting discussion and I hope I didn't poo poo up the thread too much with my  .
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Feb 6, 2014 20:49
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blah_blah posted:Well, that doesn't sound like such a bad idea compared to the alternative... Well, she got accepted and a modest scholarship (covered about 20% of the cost) at a prestigious private art school with a program she really liked. She didn't get accepted at several significantly less expensive schools that she applied to. Art school graduate degree programs are really weird about selections... it's not like there's test scores to go on, so a huge amount depends on whether a particular gatekeeper happens to like your portfolio. And the plan at the time was to teach at university, and you pretty much have to have an MFA to get those jobs. Around the time she graduated, California started slashing university budgets, and art programs are always among the first to be cut. So not only were there fewer jobs, there were also lots of experienced art teachers competing for those jobs: a recent grad with an MFA and no university-level experience didn't stand a chance. We also decided around that time that we wanted to buy a house in the bay area, which limited job options for her to within maybe 100 miles of here. Many people trying to break into a teaching career have to start out by taking jobs at random schools in the middle of nowhere... she could have done that, but decided it wasn't what she (or I really) wanted to do. Instead she's now managing a nonprofit art studio part-time (~20 hours a week), and working on her art practice the rest of the time. We're both pretty happy with the arrangement, even though it means she makes a quarter what I do. She'll get it all paid off eventually, it's not like we're destitute. We just have to be careful with money and can't afford to plow as much into retirement funds as I'd prefer. You make these choices about your life based on what you know at the time, and then you deal with the consequences when the situation changes unexpectedly. berzerker posted:Also most decent grad programs will pay you to go if they actually want you, at least for a PhD. Of course, I still took out loans, because back then there were still subsidized loans, meaning 0% interest through graduation - made for a nice chunk to invest. Then the recession hit, but still, it was a solid plan. This varies a lot depending on the field, and this was an MFA, not a doctorate. You also might be thinking it's more money than it is: she wound up borrowing about $40k, on top of $10k outstanding from undergrad. We've been able to live a comfortable middle-class lifestyle, save modestly for retirement, afford a home, and still pay down a quarter of that debt, so we're not in trouble. It's just a burden to me knowing we have this non-dischargable monkey on our backs. I could raid the retirement funds and pay it all off today, but given the average APR is around 5% or something, it just doesn't seem like that's the best option.
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Feb 6, 2014 23:56
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Gamesguy posted:Well, a lot of these patterns do well in back testing. Yeah, about that. My assumption is that whenever someone makes a new model for how a particular pattern plays out, and then back tests it, they're testing their model against a market that was unaware of this new model. However, in the future, the market will be aware of this new model (especially if it back-tested well), and the collective action of the market attempting to take advantage of the prediction of the model will tend to invalidate its predictions. The more substantially actionable a particular model's predictions are, the more the future market will fail to reproduce your back-tested results. Or to put it another way, you cant back-test a new model against a market that will resemble the future market, unless you keep your new model secret. Because the above isn't that difficult to figure out, I reach the conclusion that all useful (that is, consistently predictive) TA models are either secret (and therefore I can't know about them), or already obsolete (and therefore I shouldn't try to trade using them), or not useful for making trading decisions (and therefore are merely academic).
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Feb 11, 2014 01:02
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nebby posted:There is contradicting evidence of this. (For ref see the stock traders almanac, which has been publishing recurring market patterns for a long time that still persist such as the january effect.) Yeah, I think that's a reasonable approach to it, and even though I'm a fundamentals guy, I wouldn't just totally discount basic things like the concept of there being a support level or a resistance level, or there being seasonal patterns. Actually, it's probably important to distinguish TA patterns that, if acted upon ("efficiently") would become invalid, vs. those that would actually be self-reinforcing. As a basic example, if an algorithm says price is going to go up, and that suggests you should buy, and then lots of people use it, it could even become self-fulfilling as lots of people buy because their use of the algo tells them to. So, positive-feedback loops vs. negative-feedback loops might be a thing. I guess when I say that I'm down on TA, part of the reason is because there's a lot of snake-oil salesmen and ripoff artists peddling "how to use TA to get rich quick" schemes, and a lot of people get taken advantage of by that. I'm not aware of nearly as much of that kind of thing around fundamentals analysis.
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Feb 11, 2014 07:32
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Well, I don't exactly "believe in" anything to do with the market. I have some opinions, but none of them are strongly held: part of the reason I'm reading this thread is because I want to learn. I think that the efficient market hypothesis is an important theory to know about, and that it has something to say about how markets operate, but I also think that humans are fundamentally irrational, and that groups behavior can tend to be either rational or irrational depending on circumstances. That is, some circumstances provide groups of people with the necessary psychological supports for behaving in a more rational way, while other circumstances actively destroy the human ability to be rational. Gamesguy posted:There are many frankly ancient patterns that still hold up in back testing on very recent data. The reason they are not invalidated is because it's difficult to recognize those patterns except in hindsight, and machines are even poorer than us humans at recognizing patterns in seemingly chaotic data. Hmm. Actually the human tendency is to see patterns everywhere; often where they don't exist. The classic test is to show people two patterns of dots:  Most people will claim the righthand pattern is "more random" than the left, but it's actually the opposite. A random distribution naturally contains clusters; in the righthand pattern, none of the dots are next to each other and there's no big gaps, which is a nonrandom distribution. A computer program can detect and prove that the lefthand pattern is more random than the right, assuming the programmer understands probability. Of course, there are types of patterns that computer programs have a hard time detecting, and when we're talking about markets, we're usually talking about looking at some series of data and detecting that it's the first segment of a longer progression that will tend to conform to some identified pattern. A human brain might be better at detecting that than a computer... but human brains are so good at finding patterns where they don't exist, that I'm very skeptical about the ability of individual investors to accurately and consistently find them without a lot of "false positives." I also have a notion that the future of a market tends to mostly be the same, but in certain ways be different, than the past of a market, and that it may be difficult or impossible to predict the ways in which the future market will be different. I think this means that one can usually find patterns that have been around for a long time, and which persist, but that one can also find patterns which have been around for a long time but no longer persist, and that it may be impossible to predict exactly which currently-valid patterns will become invalid in the future. Just to use random out-of-my-rear end numbers: say there's 20 identifiable, repeating types of short, medium, and long-term patterns which are actionable (that is, you can make a trade which capitalizes on the pattern if it plays out in the typical way, in a +EV way). Perhaps 18 or 19 will still be operating the same way in two years, or five, or ten... but there may be no way to identify which one or two will stop working, and there may be a period where one or two become increasingly unreliable in a noticeable way, or it may be that one or two simply stop working at all, all of a sudden. The reason I think this might be the case, is because the world is changing and markets are based on the real world. Economies shift, industries are born and die, trading technologies change, new financial instruments are invented while others fail, regulations change (sometimes gradually or sometimes overnight), opinions change, emotional states change, there are fads and scams and also enduring developments. Surely many of these things affect market behavior, to varying degrees, and surely in some cases, in unpredictable ways. To paraphrase Rumsfeld, there are known unknowns and also unknown unknowns, and I think TA cannot account for the latter. I'm sure plenty of professionals manage risk in part by not risking their whole portfolios on the reliability of any given TA method, pattern, or prediction... but I'll reiterate that I think a lot of amateurs and neophytes do, often on the basis of superficial snake-oil type get-rich-quick books, seminars, videos, etc. quote:EDIT: I'm sorry if I come off as being aggressive but efficient market theorists irk me. Not at all, and I'd far rather get someone's opinion than be handled with kid gloves, especially since (I assume) most of you know more about this poo poo than I do.
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Feb 11, 2014 20:33
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I'm sorry for my dumb derailing about TA. I'm happy to leave the discussion where it's at if it's not a topic the thread is interested in continuing to discuss.
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Feb 12, 2014 18:40
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I honestly read that post as sarcasm and thought he was joking.
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Feb 14, 2014 18:56
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Wow, this thread is a hell of a lot better when goons aren't airing out their political opinions in it.
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Feb 15, 2014 19:56
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Harry posted:Are you trying to pretend these gigantic solar farms that everyone knew wouldn't work aren't just because the right politician was paid off? Are you trying to pretend that deriding how publicly-funded projects get funded is relevant to the stock picking, analysis and trading megathread? nebby posted:Analysis of the feasibility of methods of energy production are political opinions now, truly we live in enlightened times nebby posted:What a surprise, California moron politicians quote:these environmentalist assholes Tony Montana posted:stupid Westerners and their hippy bullshit Sage advice to the well-informed investor, right here. That's some top-notch analysis. quote:Anyway, it's relevant to the thread if you are analyzing solar companies. I would never buy solar companies who are positioned to participate in these solar-farm debacles, since my view is they are a boondoggle, but companies like SolarCity that do localized installations to offset energy costs on a multi-decade timescale seem sane to me. I have a few engineer friends that work in solar (including at SolarCity) and they know what they are doing, and I'd be shocked if they would agree that we should be doing things like building giant solar farms. Whether or not "we should" be doing a thing has little relevance to whether or not solar companies are a good or a bad stock pick. Unless you think that we are due to revert from what you perceive as irrational investing in energy to what you perceive as rational, perhaps?
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Feb 15, 2014 20:23
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Gamesguy posted:NVDA because of very strong Xbox and PS4 sales over the holiday season(I figured gamers were buying video cards too) Both the PS4 and the Xbox One run an AMD APU (combined GPU and CPU). The margins on those are razor-thin, though, so I doubt either deal makes AMD a whole lot of money.
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Feb 17, 2014 21:08
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The number of units of one currency that equal the number of units of another currency has more to do with historical mental valuations of one unit of currency within that culture, and nothing at all to do with the relative strength of a currency. What you actually seem to want to compare is money supply, since you mentioned population, and you also seem to be using forex exchange rates rather than purchasing power parity rates. So, since I'm not going to do your homework for you: first, find the PPP exchange rate between $AUS and $US. Then, find the total money supply for both countries: e.g., how many units of currency exist per person, and feel free to adjust for foreign holdings of the currency (e.g., $US in the hands of the Chinese are not available to US citizens). Then do the comparison and see which country is, essentially, "richer" on a per-capita basis, and report back something that is actually meaningful. Just to really underline how dumb your comparison is: imagine I founded a new country, Lepertopia, on an abandoned oil rig in the middle of the south china sea. I create a new currency for my country; it has 100 units, and I peg my currency to the US dollar. Tadah! Now my currency has parity with the almighty dollar! Nevermind that my entire economy is only worth $100, and also only $100 per person, and also that there's literally nothing to buy or sell with my dollar so the PPP is a divide-by-zero error. By your calculus, my money is as strong as America's.
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Feb 24, 2014 19:37
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Tony Montana posted:edit: \/\/ it's not really what I said, I was just saying that the Aus economy is strong enough that suggesting the dollar isn't 'real' because it's declining isn't true. It's been at around 90 cents for ages now. I still thought there was a connection between a currency and the strength of the underlying economy, apparently I'm completely wrong on that. I'll have to read up a bit and make sure. Tony, if two stocks are both trading for $1 a share, does that mean that both companies are worth the same? What if one company has 20k employees and the other has 300k employees, does that mean the one with 20k employees is in much better shape because their stock is at parity with the huge company? No, because total outstanding shares could be different, and if it is, market cap is different too. Potentially wildly so. This is why supporting your statement that the australian economy is on a much more solid foundation than the american economy (which it might be) with the statement that australian dollars are worth nearly as much as american dollars, even though australia only has a population of 20M while america has a population of 300M, is laughable. I actually agree with you that having a strong social safety net is good for an economy's resilience, and as an American I'm envious of the safety net Australians enjoy. It's just your statements about currency valuations that reveal a remarkable hole in your knowledge that undercuts the rest of your argument.
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Feb 24, 2014 21:52
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Could you short some REITs?
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Feb 25, 2014 04:58
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lostleaf posted:I don't see why this can't happen to US brokers. There are zero US regulations regarding bitcoin traders and brokerages. There's no federal insurance to protect speculators from fraud or incompetence. There are, actually. FinCen has issued guidance, and MtGox actually had $5.5M they had in the US seized a year ago for violating the rules. Deposits may not be FDIC insured, but the problems that brought Gox down in Japan (fantastically poor record-keeping and management) would be illegal here. The reason there isn't a US-based bitcoin exchange right now, is because everyone who has tried to set one up has run afoul of alert regulators and banks.
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Feb 27, 2014 09:42
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I remember when VRML was going to turn the Internet into a virtual reality. The problem with VR is that it sucks for looking at text and reading documents. Smartphones didn't become a thing until screen resolutions were good enough to read text comfortably. Web TV was horrible in an era before HD TVs, but now using your HDTV as a monitor is a normal thing. Touchpads became usable and popular only when the problems of eye relief and text resolution were solved. VR is a good application for visualization - games, maybe some 3d design, etc. It's been a short-term fad for movies, but 3d TVs haven't really taken off much - lots of people have them, hardly anyone uses them beyond watching Avatar. It's not a good way to manage a file system, and its applicability to social media remains to be seen. I wouldn't be doing any speculative investments based on VR taking over in the desktop or portable computing domains. Leperflesh fucked around with this message at 22:41 on Apr 1, 2014 |
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Apr 1, 2014 22:39
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rehosted for you
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Apr 23, 2014 17:31
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Apple has never invented a new product. The iPod was released well after the market had a number of other small portable MP3 players. The iPhone was released into a market already saturated with smartphones. The iPad was released into a market with multiple minority touchpad tablets available. And the iTunes store was created at a time when MP3s were already for sale from a number of other sources, as well as being (illegally) free from several online sources. Apple's key advantage and greatest innovation in the past 30 years has and continues to be marketing. Apple has successfully positioned itself as the leading (and basically only) luxury brand in the spaces of desktop and portable computing. Its technique for dominating this space is basically genius: take an existing product, refine it with improvements in UI and physical design that give it a sleek, designer/fashion look, make it easy to use, and then market the everliving gently caress out of it. Few companies on earth (in any industry) can boast even short-term marketing campaigns that rise to the effectiveness of Apple, while Apple's been doing it consistently since at least the mid 1990s, such as with the campaign surrounding the release of the iMac in 1998. Apple creates a fanatically devoted customer base by making its customers feel like they're members of an elite when they buy Apple products. iPhones, iMacs, iPads, etc. do not provide significant functionality over competing products, and they almost always cost substantially more when compared on a technical feature basis. Its huge profit margin derives from the price premium Apple can charge for everything it makes, and the price premium derives from its customers' perception that Apple products are "better" in some ineffable way - sleeker, more luxurious, more intuitive, more attractive, symbols of success and of belonging to a special club. I don't say any of this to criticize Apple. I think they're a great company. It just annoys me when people discuss Apple's technology as if it were superior on a technical basis to their competitors. The iStore sells DRM-encumbered products at a price premium to identical products available DRM-free from Amazon and other competitors. The iPhone does not get better telephone reception than a Samsung Galaxy, nor does it have a better display, or more RAM, or a better screen, or a lower price. iPods have less space, cost more, and are more restricted by ties to the iStore, compared to MP3 players from other companies. You can genuinely credit Apple engineers for focusing on user interface refinement, but that's hardly the same thing as crediting Apple (or Steve Jobs) for literally introducing any of these products as first to a market. I think if you want to invest in Apple, it's worth recognizing that marketing is their key and core innovation, and then paying attention to whether/how Apple is handling its marketing. I don't know if Apple is going to introduce new wearables or TV-top boxes or try to compete with Netflix or whatever, but if it does, the only thing I'd care about as an Apple investor is whether or not it's still applying its marketing genius to those products, positioning them as young, hip, sleek, luxurious parts of the Apple lifestyle. If they do, people will pay a premium for those products irrespective of whether they're actually better, on a technical basis, compared to the competing products. One interesting side-effect of the above is that I think Apple's marketing directly affects its stock price, perhaps more heavily than its technicals. I don't think P/E, cashflow, dividends, stock buybacks, quarterly profit expectations, etc. consistently determine the stock price as much as the transient mood of people who buy Apple stock because they've been indoctrinated by Apple marketing to view themselves as an Apple Person, a tech-savvy youthful upper-middle-class identity that naturally includes making smart investments in the company whose stock can only go up Up UP.
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Apr 24, 2014 18:05
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Lehrer posted:Why do people think Apple products are expensive? The iPhone 5s is actually cheaper than the Samsung s5. And most people just pay the $200 with a contract anyway. My Galaxy 5 cost me $39 with a renewal of my Sprint contract (and my sprint contract is cheaper than any service package available for the 5s). The MSRP for smartphones is a mostly-meaningless number since the vast majority of customers buy phones with a contract. And the galaxy s5 is one of the most expensive non-apple smartphones out there, with a MSRP of $600. And most importantly of all: picking out a single version of a single Apple product and then picking a single competing product to compare its price to is only a counterargument to "Apple's products cost more" if it's a typical, illustrative example, as opposed to an obvious outlier. Here's a chart from an Apple Insder article, just to underline this point:  The idea that Apple products generally cost more than the functionally-equivalent competition is not actually controversial. Apple CEO Tim Cook posted:But Cook also addressed a question that most consumers find themselves asking regularly: Why are Apple products so expensive? Apple doesn't make any secret of the fact that it's not interested in aggressively competing on price. It competes on the basis of "experience." This is what a good luxury brand does. A Rolex doesn't tell time better than a casio in any meaningful way, but for a lot of people, a Rolex is worth every penny, because when you wear a Rolex, you are having the Rolex Experience. When you drive a Mercedes, you get from Point A to Point B in luxury and style, and you happily pay a premium for that. Apple lavishes attention on design and refinement, while all of its competitors focus on delivering a set of features for the lowest price possible. People pay more for an iPad than they do for a Kindle Fire, and in exchange they get access to the apple applications marketplace, a familiar Apple interface, and an unmatched sense of individual luxury. While Amazon's customers spend less money and get a better screen for reading eBooks, integration with Amazon Prime, more screen real estate, a klunkier interface, an uninspired black rectangle, and no sense of prestige whatsoever. I think this is worth understanding if you want to invest in Apple, because if you do, you can pay attention to the underlying things that actually drive Apple's profitability: instead of speculating about Apple's next big product (which Apple is famous for keeping secret), evaluate whether you think its marketing campaigns are being effective, whether its profit margins on its current products are still substantially wider than those of its competitors, whether it is continuing to successfully demand a price premium for its products, whether any other significantly-sized company is successfully moving into the premium-product domain that Apple currently totally dominates. I think Apple's stock will only go down long-term if it fucks up margins, loses its exclusive hold on the lucrative premium-product segment of its marketplace, or suffers some kind of regulatory disaster (like if the iStore got shut down or something, I dunno). I don't think it's going to actually be seriously hurt if its next product release is a mis-step, or if Samsung makes a better phone, or if Steve Jobs fails to rise from the dead. Short term, it's always going to be volatile, because millions of Apple nerds buy and sell Apple stock based on the day's headlines, but there are other volatile stocks that behave that way for similar, so I don't think Apple's really special in that regard.
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Apr 25, 2014 05:18
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District Selectman posted:As for the phones, others have definitely caught up to Apple, but I still find the iPhone's user interface much better than anything else I've used. I would disagree that it's functionally the same as other phones. The hardware may be equivalent, and they may do the same thing from a top level, but I find the user experience so much nicer. I'm going to engage in some gratuitous pedantry, but it's because this post shows I wasn't clear, and I meant what I said in a specific way. I work in software. To me, the word "feature" refers to both functions and user experience. For example: 32 GB of RAM is a feature. Having a web browser is a feature. The web browser having tabs you can drag away to make a new window out of the tab is a feature. The ability to resize the font used in a menu is a feature... and also significant to user experience. A decision to have one button or two is a UX design decision, but also "how many buttons" is a feature. But a function is not UI. A function is "a thing it can do." For example, many early MP3 players had radio tuners in them, while early iPods did not. Radioless iPods were not functionally equivalent to MP3 players with the same amount of storage, able to play the same (or more) formats, and with radio tuners as well. Even if they had superior UX (and they definitely did). By the same token, modern iPhones do not have any standout, important functions that are unmatched by competitors. If you want to nitpick, access to the Android store is not identical to access to the Apple application store, but Android apps generally provide the same functions as Apple apps. All these phones are available on all major carriers, make phone calls, access 4G, have embedded GPS, motion sensors, high-quality screens, thin profiles, etc. It's true that my Galaxy S4 has a removable SD slot, which means I can decide to upgrade the SD RAM space available to me, but I suspect the vast majority of users never bother to do that. So it may not be a feature on which the Galaxy S4 gains a significant competitive advantage over the iPhone. Likewise the ability for the user to replace the battery: most users of premium phones replace them every two or three years, so Apple has recognized that being able to extend the life of an iPhone by cheaply and easily replacing its battery isn't a feature its customers care enough about for it to affect their purchase. My point, though, is that "functionally the same as other phones" and "has a better UI" are not mutually exclusive statements. In fact it's my whole point: Apple rarely competes on the basis of its products having functions that its competitors don't. Quite the opposite - in the interest of refining user experience, Apple has often dropped or avoided functions and features offered by its competitors, perhaps most famously when it went with a 1-button mouse, but also for example when it shipped iMacs that didn't have disk drives, when its iPods didn't have radio tuners, or (several times) when it released new MacOSes that lacked backward-compatibility. These were deliberate decisions that usually worked out very well for the company. Apple is very good at recognizing when a feature or function is mostly-unused by its customers and therefore won't be missed, while removing it allows a simplified, more elegant design that is easier to learn and use. Ease of use is not "dumbing down," or doesn't have to be, and that's a mistake PC-adherents make all the drat time (as do loving software engineers, much to my ongoing frustration). The tendency to cram products full of mostly-unused features is a bugbear of product designers the world over. Cynically, one can claim iPhones don't have user-replacable batteries as a form of forced obsolescence; getting a battery on a 2-year-old phone replaced costs enough that iPhone owners are encouraged to just buy a new one instead. But I think there's more to it than that: it allows Apple to provide a phone with a more firmly-sealed case, which maybe enhances the feeling of solidity and durability of an iPhone. It reduces the number of packages of ugly replacement parts kept on the shelf at an Apple store, too. It's an engineering decision that may impact a lot of different things inside the case, making the phone perhaps a little less expensive to manufacture (improves margins). And in any case, Apple would hardly be alone in using design decisions to force obsolescence in their products, if that's what they're doing. I'm not an Apple fanatic, but I admire the company and I think their stock is a good value. I think their biggest competitive advantage is their brand, perhaps the second-best-managed consumer brand in history (behind Coca-Cola). I think their second-biggest competitive advantage is their focus on elegant, simple, consistent design. I think their technological achievements are vastly overstated and mostly unimportant, and I giggle when Tim Cook declares Apple "invented the iPad," implying (falsely) without actually saying, that Apple invented tablet computing. Amazon doesn't claim to have "invented the Kindle." I pay attention to the words people use, and Apple's marketing has always carefully chosen words to imply things like that to its customers, very cleverly. It's a lesson that Apple's competition still haven't managed to fully emulate.
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Apr 25, 2014 18:26
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Garmin also sells hardware and software to automakers for OEM satnav packages.
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Apr 29, 2014 20:48
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I would assume they want it because AT&T is a major cable TV provider, and in many markets cable TV providers have no cable competitors; but, they do have satellite TV competitors, and of those, DirecTV is decent and Dish Network is awful. Buying DirecTV is buying a major competitor. They may also get the benefit of deals that are currently exclusive to DirecTV, such as NFL Sunday Ticket (for which DirecTV pays a huge chunk of cash) which is the only way to (legally) get to watch every NFL game on every Sunday. Offering a satellite option also allows AT&T to directly compete with Comcast in markets where Comcast and the other cable competitors are the exclusive cable TV provider. Instead of having to build out parallel infrastructure in those markets (which would be prohibitively expensive), they can offer competitive satellite programming and try to eat market share from Comcast. The missing piece there is of course Internet, which you can get from your cable provider but not from DirecTV. So pricing has to factor that in, and I don't know if that means AT&T will offer a satellite + DSL option, or what.
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May 19, 2014 19:46
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abagofcheetos posted:The 8K literally says if DirecTV doesn't renew Sunday Ticket they reserve to right to back out of the deal, and if DirecTV doesn't make a good faith effort to retain it they may go after them for damages. That would appear to put DirecTV into a terrible bargaining position with the NFL, since the NFL will know going into negotiations that it will cost DirecTV dearly if they fail to renew.
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May 19, 2014 21:52
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As in, "don't buy stock in these companies, because they're wasting money on researching nuclear fusion"? It's OK, that's mostly government and university work. I suppose there must be some contractors making some bucks on building the latest multi-billion-dollar tokamak that will totally get fusion to work for as much as a thousandth of a second, for merely a few million dollars per run. Workable economically-feasible fusion power has been 30 years in the future, for the last fifty+ years.
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May 22, 2014 08:44
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SA support hasn't responded to you probably because there is information about that specific thing in a stickied thread that shows up at the top of every single forum. You should read it maybe. Unless you're still getting the error today?
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Jun 27, 2014 09:04
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I always caution people not to read too much into the initial previous-month job report. The report is based on surveying and extrapolation, and the numbers are always adjusted later, sometimes substantially. Given how volatile the numbers can be, it's incorrect to try to identify a trend using (or especially only using) the most recent month's initial numbers. The number is also "seasonally adjusted" which is a whole other kettle of fish, but basically it means that farm labor numbers get adjusted based on how they tend to change throughout the farming season... but if a year has unusual weather, the seasonal adjustment may be over- or under-compensating for the actual labor fluctuation in any given month. And we've certainly had unusual weather this year. One should also take into account not only the full-time and part-time employed numbers, but the short-term and long-term unemployed, as well as the people who have been unemployed so long they no longer count as unemployed (a hilarious bit of tomfoolery in which people who have "given up looking" are assumed to just not be part of the labor force any more). I still only have what I consider a rudimentary understanding of the labor market statistics, but I see a lot of people (and a lot of journalists, unfortunately) misinterpreting them, especially when trying to score political points.
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Jul 3, 2014 20:25
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Ehh. I think if your goal is to learn how to trade (as in, learn the mechanics of using an online trading site, get a feel for what it's like to buy, own, and sell a stock, test your own emotional response to rises and falls, figure out how to set a limit, that kind of stuff), you can do it with $1000. I did. Although it might be better, if you haven't already, to use one of the paper-trading sites to trade with pretend money for a while. If you actively trade $1000 uou are going to get eaten alive by trade fees, though, so you really cannot expect to do well with only $1000. I mean, if there's some stock you really want to just buy and hold for the next few years, fine, there's nothing wrong with that (assuming you are aware of and comfortable with the risk that accompanies a total lack of diversification). But that doesn't seem to be what this thread is about, very much. I'm assuming of course that $1000 is not a significant proportion of your net worth, Chocula. If it is, then you should put it into a savings account and go visit the long-term savings and retirement thread.
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Jul 10, 2014 01:33
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CountChocula97 posted:For clarification, I'm planning on investing the 1,000 until I save up more money in the mean time and reach my goal of a few thousand more. I know you can't make much with 1,000 but that doesn't mean I shouldn't try to milk it to get whatever I want out of it, even if its about $100, right? Also, I'm mostly doing it to learn the ropes before I get more money. (As in, I don't want to have 5,000 but then have it be my very first real trade not on a simulator, I wanna get a 'feel' for everything at least) $5 to buy and $5 to sell. And this means you're not planning on being able to ease yourself into or out of a position, and you're planning to make exactly two trades, one to buy with all your money and one to sell all your stock. And then you're hoping that with this one single trade, you'll make a 10% profit? Have you read anything about stock trading? Maybe a book or something? How long do you expect to hold your stock before you get that $100?
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Jul 10, 2014 02:00
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I haven't been following Herbalife recently but they've been a horrible pyramid scheme exploitation company (with a horrible product to boot) for at least a decade. Back in 2003-6 a website I used to read occasionally did some investigation and posted an article, and then collected a ton of letters sent in by people victimized by Herbalife. If you're curious, that stuff is still posted. Basically their main product is unregulated (because it's an "herbal supplement") metabolism drug that probably kills a certain amount of people every year, but it's not that big of a deal because they don't actually make money selling their products to customers; they make money selling their pyramid scheme to desperate unemployed people who then get fleeced for their last dollars and left with cases of unsold, unsellable product in their garages. I would never invest in Herbalife just on principle, but it's super-tempting to take a very long-term short position (is that a term? Like buying Jan 2016 puts on a stock?) in the hopes that even if it takes a couple years, the company is or ought to be completely doomed. Actually I'd appreciate a discussion about very long term options in general. I understand they can be very expensive, but when do they make sense to use?
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Jul 22, 2014 19:36
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Herbalife combines the shady MLM thing with the unregulated herbal supplement thing. Both seem like arenas ripe for increased regulation. It would be a massive expansion of the FDA to have them suddenly regulate the herbal supplement market, so I don't see supplements being treated the same as drugs any time soon, but some kind of increased regulation seems likely, just because of the increasing awareness of the variability of potency (many do not actually contain the ingredients listed), risk (many are clearly dangerous when taken in excess but there are no formal studies to determine how much is too much), interactions with each other and with regulated drugs, ingredient quality, and of course the vast number that are probably nothing more than placebos. I don't think Herbalife being crushed by regulation is inevitable by any means. But even aside from all the above, I think the public is gradually becoming more aware of and wary of MLMs, which would be bad for the company's long-term viability.
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Jul 22, 2014 21:17
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jmzero posted:Right or wrong, the furthest out I can bet (at least in terms of what shows on my trading site) is Jan 2016 - and I don't think the shoe will have finished dropping by then. Is this limit something imposed by the SEC/law - like, There Shall Be No Options beyond that date - or just a market convention, e.g., in theory one could sit down with enough lawyers and regulators and whatever and write a put or call contract with any date one wanted, and offer that contract for sale?
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Jul 23, 2014 22:26
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The ROI on buying depends a lot on your household consumption and your local utility rates, of course. And I tend to think a lot of solar customers do not compare the cost of going solar to the cost of substantially improving the efficiency of their homes, both in terms of insulation and in terms of more efficient appliances etc. I've been the target of a ton of solar hard-sells lately, including the leasing thing. It makes no sense in my case because my wife and I don't have kids, and our house is reasonably efficient (and heated by gas), so the savings are minimal. But if I had $20k or whatever to spend, I'd spend it on improving the thermal efficiency of my insulation, replacing the big one-pane window in the living room, replacing my ancient A/C unit, and probably wind up saving more money in the long run than if I bought a solar system.
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Jul 31, 2014 19:53
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tbp posted:I think there's a really big divide between those who buy into a sunk cost sort of thing and those that recognize not to. From the traders I've talked to (amateur and professional, I guess) it just seems like something you understand or you don't and there isn't a lot of training that will ingrain the concept if your gut pulls you the other way. It's amazing to me because this is like, the very first thing people seem to teach when they teach about investing. "At any time, irrespective of how much you've made or lost on a position, think: would I buy this much of this security at this price, right now? Whenever the answer is 'no', it's time to sell." Is that wrong? Is it that hard for people to get?
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Aug 8, 2014 22:35
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Storgar posted:I see. I couldn't tell you whether I'm second guessing myself. I guess that's what makes everything really tough. Thanks for the help! Oh and it gets worse, as soon as you consider your opportunity cost. Let's make this very simple. Suppose you have $10,000 to invest, total. That's all the money you've got for investing in the stock market. Last week you bought 400 shares of ABC @ $17.50/share, so (ignoring transaction cost) you have $7,000 in ABC. This week, the stock has declined to $16.00 a share. The nominal value of your position is now $6,400. So, as I mentioned earlier, the first thing to do is decide: if you had no money invested in this stock, would you want to buy 400 (or more) shares at $16/share? If so, then you can hold your position. If not, then you should sell. Note that if the answer is now "no" that must mean that something has changed, in your assessment of the stock, since last week. After all, last week you liked it at $17.50, and now it's cheaper. If nothing about your assessment of the company has changed, then shouldn't $16/share be even more attractive than $17.50? In fact, should you consider buying more? After all you still have $3k to invest! Well, hold on. Diversification is an issue, you should consider the risk involved in putting all of your investment portfolio into a single stock. But more importantly, you should not have tunnel vision on this stock. There's $6,400 in ABC that you could be investing in something else. So the real question isn't "do I still like this stock", it's "do I still like this stock more than literally everything else I could invest in?" Well, you still have your other $3k. So if there's some other stock you like better today, you could put your $3k into it. But if you like it better than ABC... then why are you holding ABC instead of selling it and buying the new hotness of XYZ corporation? Is it because you lost money on ABC and hope to get it back? If it is, that's irrational. If XYZ is more attractive than ABC, then surely it's because you like XYZ's chances of going up more than ABC. In that case, surely you'll recover your losses faster by selling ABC and buying XYZ! Of course there are transaction costs, and I have to point out again, investing all your money in one stock carries the risk associated with a lack of diversification. But I hope you can see what I'm getting at here. Hanging on to a position only because you lost some money on it and hope to get it back is irrational. Sell, take your loss, and put your money into the investment you like the best today, not what you liked the best back when you bought ABC. Or if you like nothing better than ABC, decide if you would buy 400 x ABC @ 16.00 today, and if the answer is 'no,' sell and hold cash until you find something you actually want to own. Leperflesh fucked around with this message at 05:10 on Aug 9, 2014 |
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Aug 9, 2014 05:07
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