Discussion ***Official*** 2024 Stock Market Thread 💰

[repoman0]

RIP one day change



I’ve been buying into bond funds only for a little while, if it keeps moving down like today I’ll have to reverse course a bit.

 

[FelixDeCat]

RIP one day change

View attachment 113444

I’ve been buying into bond funds only for a little while, if it keeps moving down like today I’ll have to reverse course a bit.

Gofundme? 😉

So long as you collect the yield, the face value change should not matter...so long as you do not sell.

 

[repoman0]

Gofundme? 😉

So long as you collect the yield, the face value change should not matter...so long as you do not sell.

This is my whole portfolio, the vast majority of the delta is stock funds. I’m not worried about it, I learned to ride out enormous drops in 2022 or whenever that was. Saw numbers like that daily for a week or two lol.

When I said reverse course I meant start buying into cheap stocks they’ve been too frothy for me and I’ve been trying to slowly reduce my exposure.

 

[IronWing]

Well, this was just unfortunate. My worst performing fund dropped 11% today.

 

[Brainonska511]

Good thing I have a t-bill maturing soon, as I position some cash for my 2025 Roth contributions and other investments if some things turn sour for a bit.

 

[dullard]

I was hoping the correction would hold off until the new year so I could dump new money into the Roth.

I am confused. Are you currently holding taxable stocks that you want to sell in order to fund you Roth? Because otherwise, why would the timing of the correction matter?

 

[IronWing]

I am confused. Are you currently holding taxable stocks that you want to sell in order to fund you Roth? Because otherwise, why would the timing of the correction matter?

I have cash sitting on the sidelines. I wish to buy cheap and someday sell high. My Roth is maxed for this year so I have to wait until next year to put more in. I could buy now, outside of the Roth, of course but tax free is better.

 

[dullard]

I have cash sitting on the sidelines. I wish to buy cheap and someday sell high. My Roth is maxed for this year so I have to wait until next year to put more in. I could buy now, outside of the Roth, of course but tax free is better.

Okay, you were missing a sentence that was necessary for me to understand: you assume the correction is temporary and will be gone by January.

 

[Charmonium]

Can't you buy this year after a hoped for correction for your personal account and then transfer them to the Roth at whatever their price is on Jan 2nd. If we get a true 10% correction, I doubt that we'll be back to previous highs by then.

Anyway, yesterday might have been as much of a correction as you're going to get. Even with the current value of the Dow up around 300 points today, the net loss is still around 700-800 points.

 

[biostud]

Well, this was just unfortunate. My worst performing fund dropped 11% today.

But how has it performed YTD?

Overall I'm down 3% today.

 

[Charmonium]

Even if you compare yesterday's close to the previous 12 months, we're still swimming in gravy.

 

[IronWing]

Even if you compare yesterday's close to the previous 12 months, we're still swimming in gravy.

I want to win by more.

 

[FelixDeCat]

Government shutdown games. ☠️

I predicted it earlier in the thread just before the election..a nasty sell off.

Hopefully it won't happen.

 

[Charmonium]

I want it to happen. Bastards took out 190M for pediatric cancer research.

When it does, there will be no doubt about the culprits and people remember shit like that.

 

[dullard]

I want to win by more.

Since I'm not yet near retirement, the more we "win" now the more that I'm financially hurt. It means every stock I buy is much more expensive and I get much less stock in return for my limited money.

I want the stock market to go up slowly. Go up enough that people still have confidence in it, but not enough that it takes away 25%+ of my buying power like it did this year. Then, once I retire, let it go up 25%+ a year.

 

[dullard]

Can't you buy this year after a hoped for correction for your personal account and then transfer them to the Roth at whatever their price is on Jan 2nd. If we get a true 10% correction, I doubt that we'll be back to previous highs by then.

I was going to argue almost the same thing, then I did the math. Suppose we are talking about a maximum $7000 IRA contribution. So far the amount of stock market change has been ~4%. So, if he buys now, it returns back to where it was, and then he switches it to the IRA in January, he'd be looking at a $280 profit.

But then those are short term capital gains, so he'd be left with ~$180 after tax. Minus two transaction fees (unknown, but I'll guess $7 each) giving him $166. That probably isn't worth the effort plus having to fill out yet another form on the taxes--let alone the risk that stocks might not go up during this politically sensitive time frame.

 

[biostud]

So our largest company (Novo Nordisk), and the largest in Europe is now worth more than our GDP
View attachment 113344


View attachment 113343

Well, Novo is down close to 21% today.

 

[Indus]

I'm curious about something since I'm new to this (still researching really)..

How do some people lose EVERYTHING in the stock market?

That's something I can't actually fathom.. like I can understand you invest say 50k in 10 stocks.. market tanks 20%.. but you should still have 40k in those stocks.

However I've seen a few youtube videos where people were completely wiped and sometimes in negative territory owing the brokerage money. Something like this:





So for the experienced and wise among you.. how exactly does that happen?? I'm apparently missing something huge.

And yes I really wanna know because I know there will be dips but I don't want to do stupid shit that causes stuff like that to happen..

What could be the cause?? Is it options trading (something I don't understand) or something else??

 

[Charmonium]

How do some people lose EVERYTHING in the stock market?

No idea and I've been doing this for a while. But I rarely buy individual stocks. Diversification using mutual funds or ETFs is the best way to go. If you have your heart set on buying individual stocks, lean toward large caps. Those aren't going to be subject to minor economic disruptions to the same extent as mid and small caps - but that's just a general rule. I'm sure there have been exceptions. Boeing comes to mind, but even there, it's not likely to go to zero anytime soon.

Also, try to diversify. If you're going to buy 10 stocks, don't buy all tech names or all consumer cyclicals. Buy into different industry sectors.

I can see something like that happening if you just buy a handful of OTC (over the counter market) stocks. But even then and even if the bottom falls out of the market, it's unlikely that they'll all go to zero overnight.

What you shouldn't do is f' around with options. If you want to sell some covered calls, meh. There, you're only sacrificing possible future gains. But unless you're trading to support yourself and need the income, just buy and hold. BTW, a covered call is where you own at least 100 shares of the stock the call is for. Selling naked calls is a very, very bad idea.

There are good reasons to buy calls and puts but that's getting a bit into the weeds.

One stat you might want to check is the beta. That's a unitless measure of how much a stock varies with the market. A beta of one means it mostly mirrors market moves in both direction and percentage. Less than one is for people with a low risk tolerance. More than one, the opposite.

 

[biostud]

I'm curious about something since I'm new to this (still researching really)..

How do some people lose EVERYTHING in the stock market?

That's something I can't actually fathom.. like I can understand you invest say 50k in 10 stocks.. market tanks 20%.. but you should still have 40k in those stocks.

However I've seen a few youtube videos where people were completely wiped and sometimes in negative territory owing the brokerage money. Something like this:

View attachment 113539

View attachment 113540

So for the experienced and wise among you.. how exactly does that happen?? I'm apparently missing something huge.

And yes I really wanna know because I know there will be dips but I don't want to do stupid shit that causes stuff like that to happen..

What could be the cause?? Is it options trading (something I don't understand) or something else??

By investing for borrowed money (gearing) or shorting the wrong stocks.

 

[Charmonium]

Technically, when someone shorts a stock, the shares have to be "borrowed" from someone. I've never shorted anything so I don't know the mechanics but I wouldn't be too surprised if that doesn't always happen. IOW, those would be "naked" shorts and d'em illegal - well in the US they are. Not a good idea either way though.

I've also never done anything with puts but my understanding is that you sell a put to cover a short position.

Just remember, anytime you're talking options, you're talking single blocks of at least 100 shares.

Back in the old days, all trades had to be "whole lots" of 100 shares. Now you can buy whatever you want. Probably not fractional shares but it wouldn't surprise me.

 

[FelixDeCat]

I'm curious about something since I'm new to this (still researching really)..

How do some people lose EVERYTHING in the stock market?

That's something I can't actually fathom.. like I can understand you invest say 50k in 10 stocks.. market tanks 20%.. but you should still have 40k in those stocks.

However I've seen a few youtube videos where people were completely wiped and sometimes in negative territory owing the brokerage money. Something like this:





So for the experienced and wise among you.. how exactly does that happen?? I'm apparently missing something huge.

And yes I really wanna know because I know there will be dips but I don't want to do stupid shit that causes stuff like that to happen..

What could be the cause?? Is it options trading (something I don't understand) or something else??

There are lots of ways to do this, I know, because I've done it. If you treat your money like you are going to the casino vs. diversifying it into growing companies it will surely disappear.

Jim Cramer was on CNBC before market open a few days ago talking about the gambling addiction in stocks and sports betting apps. Every day you have options that only have a 24 hour life span. Also, every Friday, weekly options expire. These are called "zero day options". He said he was reading that some people have become so addicted to the fast money that can be made they wind up losing everything. He thinks zero day options on indexes should be abolished as they serve no real purpose and encourage gambling.

The thing about gambling is that you may win but the more you play the odds catch up with you and eventually you go broke.

 

[FelixDeCat]

I still trade options but not very often, and avoid zero day like the plague. I try to buy at least a week out or longer, this way if you are wrong you can still salvage something.

I did pretty good about a week ago on SOUN (Sound Hound). It was a stock on one of my watch lists. It hit an all time high of 18+ and pulled back hard to 13 (18 and 13 are fib levels). It consolidated at 13 for a few days. On that day I noticed a breakout from 13 to 15. Thinking it might retest 18, I bought 9 $15 call options for 1.00 ($900). I was right and the stock hit a high of $17+ that day. I sold the same day for $1.89, making $801. SOUN went on to reach all time highs last week of $23+. Fridays close was $21 which is between fib levels 18 to 34.

I like SOUN but I like it better at $13 or less. It was a $3 to $5 stock for years. I think it is overvalued but then so is everything else in this market.

Fib levels are just one measurement for judging value, but this one is easiest to understand IMO:

 

[FelixDeCat]

Here is the two week chart for SOUN. It likes the 18 Fib level, but could retest 13 or threaten 34.

The first marks are where I did my trade. After that I was focused on Quantum stocks and did not trade SOUN.

 

[FelixDeCat]

Also, when I say I think SOUN is overvalued, this is why: