On risk tolerance. Some people may never invest in stocks again. Investing |
- On risk tolerance. Some people may never invest in stocks again.
- Understanding stock returns are clustered and that is NORMAL.
- Can someone please explain MACD to me without speaking like an asshole.
- What are you buying if there’s a second crash?
- Where to park cash for the short term?
- Negative equity in some stocks.
- Europe Fears It Could Be Too Late to Shake Off Russian Gas Addiction
- Net loss vs positive eps. How?
| On risk tolerance. Some people may never invest in stocks again. Posted: 05 Mar 2022 06:56 AM PST In the late 90s, I was making a great salary, aggressively saving, living frugally, but for investing was risk averse, by nature. I did not want to lose money I had earned and saved. I still don't. Full blown dot com mania rolled around when the globe.com went public in late 1998. I played around with an ETrade account during the .com bubble, making harmless $5k trades, no options, took profits way too early, but followed the market action very closely. I dabbled lightly and did some IPO trades, some premature shorting, and mostly used it as a positive learning experience. No harm, no foul. I was mostly a coward, happy to have my money safe on the sidelines, CDs and bonds, but the dot com bubble was spectacular on the upside and the downside. However, the experience left me very distrustful of the entire game. Investment banks underwriting bogus websites with no earnings to sucker bagholders which turned out to be mom and pop mutual funds, pension funds, and day traders who didn't actually daytrade. Insiders cashing out of bogus IPOs to the retail sucker. The whole thing seemed like a huge scam. A bullet that I dodged since I didn't get too caught up in the game. I had a day job and did not quit it, and kept earning and saving. The moral of the story is that I never really went full hog into the stock market. I am one of those people. Missed out on tons of tech gains for the next 20 years. All due to the skepticism developed during the dot com bubble. Threw the baby out with the bathwater. And I didn't even lose any money!! Fast forward to COVID bubble, and some new investors have gotten clobbered in the last year. Meme stocks, SPACs, and scam IPOs are down 50% to 75% of peak values. It's the exact same thing. A lot of people will hold underwater stocks until $0 or until they die, if they never break even. But, that's another conversation. I get the feeling this recent bear market will scar some of the victims for life. My advice is to learn from your mistakes (YOLO options trades, bag-holding meme stocks, invest in diversified ETFs, etc) ....Whatever you see as the lesson for you and move forward with your financial lives. Do not throw the baby out with the bathwater and stuff cash in your mattress for the rest of your life. Because there are a bunch of people reading this who are at risk of doing exactly that, which to be fair, isn't the worst thing in the world. Please don't hate on me. I am just sharing my experience for those who may find it useful. I am happy to answer any further questions about the pros and cons of overly cautious investing, LOL. Holding: Cash Edit: Today, the bear market today is limited to certain IPO, growth, and meme stocks. The ones down 50%+ In the current market, some individual stocks have been clobbered, just like .dom bust, but this does not affect the broad market like .dom crash No, today is nothing like .com crash. IVV lost half its value from 2000 to 2002. Those who invested in QQQQ went from $100+ to $20. Huge market index down 80%. Those who invested in SPY went from $145 to $80. Huge market index down 50%. Back in 2000-2002 SPY and QQQQ went down 50% and 80%. Cisco Microsoft Intel were all crushed along with fake .com stocks. Nothing escaped the bear. [link] [comments] |
| Understanding stock returns are clustered and that is NORMAL. Posted: 05 Mar 2022 09:49 AM PST Okay folks out there seem to think (seems logical enough) that stock returns are linear. They get upset when they hold stocks and they don't return like a bond or CD whose distributions are set forth in a specific manner specified ahead of time. That is NOT how the stock market rewards its investors for taking on risk. Below may be a bit of an eye opener for some and a good reminder to others who already know... ALL of the market returns are clustered to just a few days of the ENTIRE time you hold them. Yes, that is true. Link below proves this point. It shows in the 18 year period ending in 2018 if one missed just the best 20 day period your return would have been -0.33% vs. being fully invested INCUDING those best 20 days which would have been: +5.6%. How significant was that? Well if you were in cash for that entire ENTIRE 18 year period you return would have been: +1.79% (thanks portfoliovisualizer)! That means if you missed just the best 20 trading days of that near 2 decade period of time you would have earned LESS in stocks by 2% annualized then just being in cash for the whole time period! If one assumes 253 trading days for the year (thanks google). That means missing the wrong 0.5% of all trading days gets a return less then cash (=20/18 x 253). Since NO ONE knows which 20 days are the best 20 days your only option is to hold stocks through the ENTIRE period of time. Yes reinforcing the mantra, "time in the market and not timing the market". Some may find it interesting as well as the BEST 20 days are nearly always clustered around the WORST 20 days. So, when the worst days in the market happen when your mettle is being tested is the exact time to do nothing and stay invested so one doesn't miss the best days. Hope this helps some folks understand stock returns are NEVER linear and is the reason returns are higher then that of fixed income holders (cash and bonds). https://www.fool.com/investing/2019/04/11/what-happens-when-you-miss-the-best-days-in-the-st.aspx [link] [comments] |
| Can someone please explain MACD to me without speaking like an asshole. Posted: 05 Mar 2022 10:34 AM PST I'm trying learn what the MACD (moving average, convergence, divergences) but every video and articles I find on it explains it like I have a fucking degree in astrology because the shit their saying is going right fucking over me. Can someone please just give me a basic rundown of what it is and how to read it. [link] [comments] |
| What are you buying if there’s a second crash? Posted: 05 Mar 2022 11:27 AM PST Obviously, if we see anything like the crash from earlier this year, most of them will be a bargain. But what specific stocks would you buy? I'm inclined to steer clear of travel stocks and financials. Delinquency a problem for the latter. Already pilled into travel and we may see some sort of change in attitudes to travelling. I'm probably going to jump in on consumer staples. Interested to hear what you're all thinking if it does happen. [link] [comments] |
| Where to park cash for the short term? Posted: 05 Mar 2022 10:05 AM PST A significant portion of my compensation is in the form of Restricted Stock Units. Thankfully, my company is well run and the stock price has been growing slowly and steadily. This is not a startup, nor a FAANG company, so I have decided not to put all my eggs in a single basket and am diversifying 50% of the shares on each vesting date. I have two goals - form the core of that 6-12 month "safety net" and also start saving for the down payment on a house. What's the best option to "park" cash in a more or less safe manner? Currently have the "other 50%" in a Schwab money market account, but I'm wondering if there are better options. TL;DR - What's the best lower-risk vehicle for holding cash with reasonable liquidity? [link] [comments] |
| Negative equity in some stocks. Posted: 05 Mar 2022 12:06 PM PST Whats the general thought on either declining bv or negative bv in some companies. One like DPZ which has great financials except a continued negative growing p/b. I know it means they are asset light, but it also means they are cash to leverage/debt high and going higher. Any thoughts on this? [link] [comments] |
| Europe Fears It Could Be Too Late to Shake Off Russian Gas Addiction Posted: 05 Mar 2022 11:51 AM PST The European Union gets around 40% of its gas from Russia—and that dependence has grown in recent years. This week, as the West sought to hobble Russia with sanctions, the EU was paying as much as 660 million euros—roughly $722 million—a day to Russia, according to the Bruegel think tank. That is triple the level before Russia invaded Ukraine. Replacing Russian gas is easier said than done, however. Many liquefied natural gas terminals that receive deliveries from the U.S. and Qatar are maxed out. Two new terminals approved by the German government this week will only be built in three years at the earliest, one of the companies involved has said. "Europe thought that energy security was something from the past, it was not a real risk anymore," Mr. Tagliapietra said. "We just sat and did business as usual." "If the Russian gas stops, there will be no ceiling for prices," said Martin Vladimirov, director of the energy and climate program at the Sofia, Bulgaria-based think tank Center for the Study of Democracy. [link] [comments] |
| Net loss vs positive eps. How? Posted: 05 Mar 2022 09:51 AM PST How does a company post positive eps but have a net loss? I don't understand. The 4th and 5th bullet are confusing to me and seem contradictory. Here's the bullets from the q4 earnings. Fourth Quarter Revenue of $777 million, up 9% Year-over-Year; 2021 Revenue of $3,010 million, up 11% Year-over-Year Fourth Quarter Core Revenue of $734 million, up 11% Year-over-Year; 2021 Core Revenue of $2,827 million, up 14% Year-over-Year Record Fourth Quarter Bookings of $329 million, an increase of 12% Year-over-Year; 2021 Bookings of $1,031 million, a decrease of 8% Year-over-Year Fourth Quarter Net loss of $(83) million, or $(0.39) per diluted share; 2021 Net loss of $(218) million, or $(1.05) per diluted share Fourth Quarter Non-GAAP Earnings Per Share of $0.25, down 4% Year-over-Year; 2021 Non-GAAP Earnings Per Share of $0.97, up 17% Year-over-Year Fourth Quarter Cash Flow From Operations of $60 million; 2021 Cash Flow From Operations of $371 million [link] [comments] |
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