Investing General Discussion

Furry said:

Haven't we established over the past year that logic has absolutely nothing to do with the markets. There's people throwing thousands of dollars at digital cards that look like someone's highschool project over in the bitcoin thread. We are entering an era of mass insanity that is probably worse than the famous tulip craze.

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There is the millennial investor, that thinks they know better than everyone else, and the older investor, that's already seen the BS. I bought stupidly overvalued companies in the dotcom era and lost money like the rest of them, now I know better.

Unfortunately, racking up losses is a great teacher. Seen this movie before, it doesn't end well.

Y'all need to lower your expectations of making 10% a day. Hell, if you make 1% a day, you'd have millions in just a few years.

The older investor wants to make money; the younger investor wants to play games and doesn't care if he loses money. If you are investing in something using tulip valuations, you prove my point.

Sanrith Descartes said:

I owned GM a number of years ago. Just finished the call. It wasn't what I was expecting. I thought it would be a quick 5 minute buy this/sell that. It was impressive in the depth they went in to.

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Yup, and like he said, he's trying to teach us how to make our own decisions. But if you listen closely, you'll hear him say things like the AMD deal is getting done with Xilinx, or short CRM today and buy it later in the week. I don't agree with all of his stuff, but I have a better decision framework. Other than WYNN, can't think of any losers in the last year he gave (maybe CVS).

If I go back and review my day trades for the month, I'm in the green, but 80% of my losses come from mental issues. I got sick from the covid shot and lost. I macroed at the open and lost twice. Risky with the way this market is. I shorted into support, and didn't pay attention to where it was and lost. I let my mind play tricks on me and anticipated a signal that never happened and lost.

Barring covid side effects, the mental mistakes I made were from being impatient. Now that I am swing trading, I'm doing simulated trades and have made 3% in the last week on Tesla.

I have to sit on my hands longer. Literally, I sit on my fucking hands so I can't move until I have strong confirmation and know where my support and resistance are. The problem is the tool I use doesn't draw every line of support or resistane, just the first one. That made for getting stopped out quick.

You guys do what you want with GME and AMC. Like I said, making losses is the best teacher. I don't care.

Tmac said:

1% on what though? The challenge is that younger folks just started investing, so they have high risk tolerance and negligible assets.

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There is a term in Finance called good risk versus bad risk. In any given day in those WSB stocks, you run the risk of them going to zero. I ask you how that is an acceptable risk? How is it acceptable for you to lose 20% in a day?

Recognize, you can go back thousands of years, look at markets, and see that anytime there was a "new way of valuation," 95% of the time, someone lost their ass. I'm talking a thousand years before they thought it was a good idea to trade tulips for houses.

I'm not trying to be glib, but there's more to this than just throwing around buzzwords like diamond hands, stonks and boomer stocks. A lot more.

Please tell me how you come to the valuation that AMC is worth $44 a share. I challenge any of you to post your DCF formula. I'll go ahead and send you a simplified version, so you can start here and we check the assumptions.

Sanrith Descartes said:

I set up my CRM to sell after hours for a crazy high price of $274 to see if I can catch it on a spike up. If it sells great and if it doesn't also great. Either way its a buy/hold forever stock for me so if it sells I will circle back on it down the road.

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Been in it for over a year now.

Sanrith Descartes said:

Shit getting real up in here now. We are pulling out the formulas.

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Before people lecture me on stock valuation models, I want to see their numbers. I spent an entire semester on DCF modelling strictly for the stock market in graduate school using models much more complicated than this. This is the day one formula, right after the Prof says hello.

If you have never done this for a company, and never reflected the impact of a decision and redone the quarterly statement for a year based on projections, how can you tell me I don't know how to value a company?

I understand trading on momentum, which is what y'all are trying to do, but if I trade on momentum, its a price I can live with. I invested in AMD, I traded it also, but when it became a MEME stock, I cut my position and am holding it. Its a good company, but if you push it up too far, I'm selling it, just like I did AMC.

What will you do when the momentum goes to zero? If you bought 1000 shares at $40, and momentum takes it back to its fundamental value of 4, do you really think the fundamentals will put it back at 40?

Shonuff said:

You guys do what you want with GME and AMC. Like I said, making losses is the best teacher. I don't care.

There is a term in Finance called good risk versus bad risk. In any given day in those WSB stocks, you run the risk of them going to zero. I ask you how that is an acceptable risk? How is it acceptable for you to lose 20% in a day?

Recognize, you can go back thousands of years, look at markets, and see that anytime there was a "new way of valuation," 95% of the time, someone lost their ass. I'm talking a thousand years before they thought it was a good idea to trade tulips for houses.

I'm not trying to be glib, but there's more to this than just throwing around buzzwords like diamond hands, stonks and boomer stocks. A lot more.

Please tell me how you come to the valuation that AMC is worth $44 a share. I challenge any of you to post your DCF formula. I'll go ahead and send you a simplified version, so you can start here and we check the assumptions.

View attachment 369137

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Common themes of market bubbles:

- use of leverage
- "new ways of valuation"
- money coming from outside sources (i.e.: covid funds ala stimulus checks)

Shonuff said:

Common themes of market bubbles:

- use of leverage
- "new ways of valuation"
- money coming from outside sources (i.e.: covid funds ala stimulus checks)

A Brief History of Financial Bubbles

www.gsb.stanford.edu

A Brief History of Stock Market Bubbles & How Investors Can Prepare - Ticker Tape

There have been a few occasional stock market bubbles since the beginning of markets. Here’s a look at a few of them, and what today’s investors can learn from these popped stock market bubbles.

tickertape.tdameritrade.com

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Who could have predicted giving strippers and unemployed people 500k mortgages would lead to a bubble!?