Investing General Discussion

Blazin · Sep 9, 2024

Fame can always be leveraged for attention, he makes money from his followers they are the ones hurt. If they ever want to stop being hurt they'll stop buying GME calls when he tweets but to me its not much different than any other personality we don't worry about Marquis making money off of YT . It sounds silly but I think the GME call buyer who follows him isn't really trying to make money its entertainment and wanting to be part of something. Maybe some of them are low IQ enough to think they are sticking it to the man but it only gets our attention because it's an outlier to the normal path of celebrity.

Jysin · Sep 9, 2024

Blazin said:
Fame can always be leveraged for attention, he makes money from his followers they are the ones hurt. If they ever want to stop being hurt they'll stop buying GME calls when he tweets but to me its not much different than any other personality we don't worry about Marquis making money off of YT . It sounds silly but I think the GME call buyer who follows him isn't really trying to make money its entertainment and wanting to be part of something. Maybe some of them are low IQ enough to think they are sticking it to the man but it only gets our attention because it's an outlier to the normal path of celebrity.

Any different from Boomers following awful Cramer advice for decades?

Jysin · Sep 9, 2024

Wasn't the whole retail narrative of GME just smoke and mirrors? Made a good story. In the end it was found it was more HF volume eating other HF.

Gravel · Sep 9, 2024

Rangoth said:
The entire GME thing was amazing at all levels. This dude, and no matter what you think of him, was essentially a nobody who posted a massive GME position with why he thinks the company could be awesome. This position and his post lived for months or almost a year if I remember reading the story correctly. Then, for apparently no reason, the thing gets necro's and because gamers are autistic, they want to crush the big corporations/banks and they push GME to an absolutely unfounded price in a short squeeze, making this dude a multi-millionaire many times over.

During this process the big corp./banks pulled out all stops to try and curb the pain. All the funky shit with halts but somehow massive sells still going through. Then he gets brought before congress...wtf?

Then he tried to do it again, but this time they were ready. The needle barely moved and to put a beautiful amount of icing on the cake, GME does a surprise early release of earnings(which sucked of course) *AND* announces an absolutely monumental share offering creating enough dilution to avoid any problems. Sure....that was planned and totally normal.

I would bet someone made a phone call to the CEO/board members that if they do this they'll all get some perfectly legal side payout. The entire thing reeked to the high heavens. The little guy will *never* win at scale.

Good for him for sure, but just like politics and trump revealed the deep state for what it is, this event absolutely shed light on the fact that when someone needs a piece of the market to go a certain way, it absolutely can happen.

Anyway, sorry for derail.

I also believe we seeing a fake crawl up that will revert, took a smaller short position on QQQ, plan to sell if it's worth 4.00$ or close to break even if I'm wrong.

View attachment 545163

I was always a firm believer that even though the markets were tilted towards the rich, just because money begets more money (most of the time anyway), they were still fair, but that really pulled the bandaid off. Doesn't help that it came right around the same time as the covid shit, vaccine mandates, and 2020 election. It was just another in a pile of stuff to add to the "this is all bullshit" stack.

Not being able to liquidate my position, even if it was just "fun" money, because they needed to shut off trades for the big players, really rubbed me the wrong way. Turned what was going to be a quick 50% profit into a 50% loss.

Sanrith Descartes · Sep 9, 2024

Rangoth said:
The entire GME thing was amazing at all levels. This dude, and no matter what you think of him, was essentially a nobody who posted a massive GME position with why he thinks the company could be awesome. This position and his post lived for months or almost a year if I remember reading the story correctly. Then, for apparently no reason, the thing gets necro's and because gamers are autistic, they want to crush the big corporations/banks and they push GME to an absolutely unfounded price in a short squeeze, making this dude a multi-millionaire many times over.

During this process the big corp./banks pulled out all stops to try and curb the pain. All the funky shit with halts but somehow massive sells still going through. Then he gets brought before congress...wtf?

Then he tried to do it again, but this time they were ready. The needle barely moved and to put a beautiful amount of icing on the cake, GME does a surprise early release of earnings(which sucked of course) *AND* announces an absolutely monumental share offering creating enough dilution to avoid any problems. Sure....that was planned and totally normal.

I would bet someone made a phone call to the CEO/board members that if they do this they'll all get some perfectly legal side payout. The entire thing reeked to the high heavens. The little guy will *never* win at scale.

Good for him for sure, but just like politics and trump revealed the deep state for what it is, this event absolutely shed light on the fact that when someone needs a piece of the market to go a certain way, it absolutely can happen.

Anyway, sorry for derail.

I also believe we seeing a fake crawl up that will revert, took a smaller short position on QQQ, plan to sell if it's worth 4.00$ or close to break even if I'm wrong.

View attachment 545163

There is a pretty good docudrama about the entire story. Its called Dumb Money. Its worth watching. Pretty entertaining.

Sanrith Descartes · Sep 9, 2024

Blazin said:
It sounds silly but I think the GME call buyer who follows him isn't really trying to make money its entertainment and wanting to be part of something. Maybe some of them are low IQ enough to think they are sticking it to the man but it only gets our attention because it's an outlier to the normal path of celebrity.

This. And these are some of the folks we are investing against. For every MIT grad writing algos for HFTs, there are thousands and thousands of Apes.

Sanrith Descartes · Sep 9, 2024

Jysin said:
Wasn't the whole retail narrative of GME just smoke and mirrors? Made a good story. In the end it was found it was more HF volume eating other HF.

The real story that got buried for the most part was GME was so crushed in naked short positions that Kitty estimated the short interest was something around 150 - 200% of the float (IIRC) and that he realized it was ripe for a squeeze that they couldn't close out easily because of the lack of actual shares due to the naked shorts.

Sanrith Descartes · Sep 9, 2024

Jysin said:
So, Apple just presented their new phone with the long awaited AI (apple intelligence).

They dropped the bombshell it is releasing in beta status! This is NOT the usual Apple way. They are typically late to the game with an ultra polished product.

SELL THE NEWS, in my opinion.

Never bet against the fruit.

Sanrith Descartes · Sep 9, 2024

GOOGL at the lowest RSI since Jan of 2022.

Burnem Wizfyre · Sep 9, 2024

Blazin said:
Fame can always be leveraged for attention, he makes money from his followers they are the ones hurt. If they ever want to stop being hurt they'll stop buying GME calls when he tweets but to me its not much different than any other personality we don't worry about Marquis making money off of YT . It sounds silly but I think the GME call buyer who follows him isn't really trying to make money its entertainment and wanting to be part of something. Maybe some of them are low IQ enough to think they are sticking it to the man but it only gets our attention because it's an outlier to the normal path of celebrity.

I bought a truck with money from GameStop, A sauna with money from AMC. I’ve loved the whole thing, luckily I’m to stupid to buy puts etc etc.

Sanrith Descartes · Sep 9, 2024

Burnem Wizfyre said:
I bought a truck with money from GameStop, A sauna with money from AMC. I’ve loved the whole thing, luckily I’m to stupid to buy puts etc etc.

Apes together strong
Apes who sell while other Apes hodl rich.

Burnem Wizfyre · Sep 9, 2024

Sanrith Descartes said:
Apes together strong
Apes who sell while other Apes hodl rich.

I’ve got tampon hands except for DJT apparently, i thought for sure it would recover, was my first loss.

fris · Sep 9, 2024

i never bought bought DJT, but knew it was over when he posted on twitter again

Rangoth · Sep 9, 2024

fris said:
i never bought bought DJT, but knew it was over when he posted on twitter again

Let's be fair....DJT was always meant to be a short term/one time play off of his momentum and political campaign. It never had a chance as a legit platform and business. I make these type of plays all the time and also joined the GME thing, but I set my sell price immediately after I click the buy button and don't ever look back on "missed potential gains", just happy to ride the train for a brief window

I'm doing the same thing for all the weed stocks which I posted in more shit-trading thread since it's not really core investing discussion. Already dumped one for 10% and I have zero intention of holding any others past election season.

Sanrith Descartes · Sep 9, 2024

Burnem Wizfyre said:
was my first loss.

Cherry popped.

Blazin · Sep 9, 2024

Burnem Wizfyre said:
I bought a truck with money from GameStop, A sauna with money from AMC. I’ve loved the whole thing, luckily I’m to stupid to buy puts etc etc.

during that period you could have bought just about anything and done that, all the event did was convince you to take risk.

Rangoth · Sep 9, 2024

Blazin said:
Long term holders can ignore cyclical cycles completely. It should be of no concern what so ever . If you hold for a decade it matters not a lick if we drop 20% here and don’t set a new high till 2026 what difference would it make?other than you get a chance to buy stuff cheaper or reinvest dividends at a lower number

Not being contrarian but I do always see people here talk about long term investing and "guessing" the top and bottom and that is not really required.

In fact, if all you did was do buy and sells when the SPY crosses the 200DMA you can outperform the market(measured by just buying and holding SPY for the same period) by a significant margin. This was backtested over 22 years. Using a technical data point like this can remove all emotion out of the passive long term(decades) investor and still give you a fairly solid edge over someone who just "buys and holds" SPY over the same period. Of course, there will be temporary periods where it may seem like a mistake, but over time it wins.

This is a good read for any "hands off" investor: Backtested 200DMA vs. Buy & Hold

Captain Suave · Sep 10, 2024

Rangoth said:
Not being contrarian but I do always see people here talk about long term investing and "guessing" the top and bottom and that is not really required.

In fact, if all you did was do buy and sells when the SPY crosses the 200DMA you can outperform the market(measured by just buying and holding SPY for the same period) by a significant margin. This was backtested over 22 years. Using a technical data point like this can remove all emotion out of the passive long term(decades) investor and still give you a fairly solid edge over someone who just "buys and holds" SPY over the same period. Of course, there will be temporary periods where it may seem like a mistake, but over time it wins.

This is a good read for any "hands off" investor: Backtested 200DMA vs. Buy & Hold

This kind of analysis is highly dependent on the time bounds of the simulation. The one you linked starts immediately before the dotcom crash, which isn't exactly fair to the hold case. I don't have the tools to do it offhand, but I've seen similar work on 40-50 year horizons with different results. Also, there are concerns about total portfolio volatility tolerance even if return ends up better on average.

Plus the time-honored, "If it were really this easy, why aren't billions of dollars of people/funds beating the market with it right now?"

Blazin · Sep 10, 2024

Rangoth said:
Not being contrarian but I do always see people here talk about long term investing and "guessing" the top and bottom and that is not really required.

In fact, if all you did was do buy and sells when the SPY crosses the 200DMA you can outperform the market(measured by just buying and holding SPY for the same period) by a significant margin. This was backtested over 22 years. Using a technical data point like this can remove all emotion out of the passive long term(decades) investor and still give you a fairly solid edge over someone who just "buys and holds" SPY over the same period. Of course, there will be temporary periods where it may seem like a mistake, but over time it wins.

This is a good read for any "hands off" investor: Backtested 200DMA vs. Buy & Hold

We have discussed this idea a few times over the years and it is a sound strategy 20 month ma is another alternative with less in and out. Obviously if you sell the LT MA you'll avoid the worse bear markets every time. This guy is big time cherry picking which is dishonest. It is unlikely to outperform but what it does do is provide an acceptable level of return while reducing risk. You must accept you will never get out at the top and instead will normally be selling down 8-10% from the highs, with the benefit of avoiding more devastating declines. The market at times will whipsaw you costing you some % and that could be frustrating.

If you use the month end rule to reduce transactions sometimes it could bone you, this strategy has you selling near the bottom of the covid crash after having suffered a 30% drawdown.

This would have you:

SELL SPY $257.75 3/31/20
Buy SPY $304.32 5/30/20
Sell SPY $308.36 6/30/20
BUY SPY $326.52 7/31/20

Making these transactions would not be easy mentally. You are going to feel a fool and that with each transaction you are doing the exact wrong thing. I believe this strategy is sound and would support anyone handling their long term holdings in this manner but that doesn't mean it's easy. You have to fully dedicate yourself to rule following with the understanding that sometimes it will work out and sometimes will look really dumb.

For middle income people who have amassed savings well beyond their income capacity, as they near retirement major drawdowns need to be mitigated. In your 20 or 30s it's all just noise.

Now let me get back to my 5min chart.

sliverstorm · Sep 10, 2024

Captain Suave said:
This kind of analysis is highly dependent on the time bounds of the simulation. The one you linked starts immediately before the dotcom crash, which isn't exactly fair to the hold case. I don't have the tools to do it offhand, but I've seen similar work on 40-50 year horizons with different results. Also, there are concerns about total portfolio volatility tolerance even if return ends up better on average.

Plus the time-honored, "If it were really this easy, why aren't billions of dollars of people/funds beating the market with it right now?"

Agree. This stuff is complete snake oil from the people who write it. They do a bunch of backtests, find the rules that work within the timeframe they're targeting, then write the articles about the winners on the back of what--for a long term investor--is really just a single data point.

This strategy basically makes you 'jumpy'. You get out early and avoid long, protracted crises like '01 and '07/'08, but you trade that off by selling low and buying high missing out on aggressive short-term drops/recoveries, like Jan 23 (+6%) and Nov 23 (+9%), and that adds up over time.

Here's the strategy's SPY performance on a 20 year time horizon, which might still seem compelling:

But if you zoom out using S&P for a proper long-term horizon, you can see that basically all the strategy gains come from sitting out the 07/08 financial crisis. The further away you get, the more your risk-averse behavior punishes you on returns:

The reduction in max drawdown is a real thing, but you do pay for it: 30-year timeline ending this year and including both crises has you roughly losing -67pp on a 2000pp market return for that reduced volatility. But the idea that there are simple universal technical 'principles' that both increase returns and decrease risk is in my mind a fiction. At the time the article above was published, Oct 17, 2022, the 20-year performance of its strategy was literally 549% vs. 541% hold and trending down. Absolute charlatan of an author for posting 22 years to start his time window at the peak of his strategy's strength.

Let's apply these same 'principles in action' to QQQ on the ETFreplay.com website the author used. Oops, you lost half your wealth:

Nice max drawdown, though.

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