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Thread: How can anyone rationally put money in the stock market?

  1. #11
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    Quote Originally Posted by and4rik View Post
    Simple question. Any single investor and even large fund have no way to know where the market is going up or down. Just look at what happened to Bud Light practically overnight. I would place better odds on any Vegas casino game. For me the risk to zero is a non option and have parked my money in an interest bearing account at 4.5% free to come and go as I please.

    I read an article a week ago which analyzed the largest stocks in the S&P 500. The big stocks are way overvalued at a 53 P/E ratio and are very likely to crash..... eventually. Of course, who knows when. As the old saying goes, bull markets last much longer than anyone expects and the same goes with bear markets and market crashes as well. The P/E for the US stock market was way down at eight back in 1982 and, adjusted for inflation, US stocks declined 70% from 1966-1982. Got gold and silver?

  2. #12

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    I starting buying small blocks of PSQ today. Maybe add SQQQ, they have both turned up, it's possible the tech crash is in it's early days. I'll DCA an see how it goes. If the trade really starts going my way I'll use the margin.

  3. #13
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    Jan 2017
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    Day Trading has a very low rate of success. More than 80 % of the day
    traders lose money.

    https://blog.gitnux.com/day-trading-...e%20of%2073%25.

    The Wall Street pro's quip about them: "their only role is to provide liquidity."

    In other words, the day traders are the cannon fodder of Wall Street.

    How can an individual day trader compte with the pros ? The pros have
    unbelievable software and hardware, employing scientists.

  4. #14

    Default Warren Buffett irrational?

    I guess Warren Buffett would be considered irrational (?).

    I've been in the market for 33 years, and have done very well picking my own stocks. Only twice have I owned a mutual fund.

    The stock market isn't for everyone. For those who have a long time horizon, have some tolerance for risk, have the time to analyze accounting documents, can diversify and are patient, can do well in the market.
    Last edited by BodieGhost; 09-10-2023 at 12:45 PM.

  5. #15

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    Quote Originally Posted by BodieGhost View Post
    I guess Warren Buffett would be considered irrational (?).

    I've been in the market for 33 years, and have done very well picking my own stocks. Only twice have I owned a mutual fund.

    The stock market isn't for everyone. For those who have a long time horizon, have some tolerance for risk, have the time to analyze accounting documents, can diversify and are patient, you can do well in the market.
    Agree. Ditto for all asset classes. That is why they all exist and are all used by the well heeled.

  6. #16

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    Well, I'm thinking I better start selling stock soon. Looking at the inverted yield curve, with short term bonds getting more than long term. Recession appears very likely, almost always happens after such inverted yields. I want more "dry powder" to fire at reduced prices when the time comes. Not selling any gold or other PMs though.
    “Of all the contrivances for cheating the laboring class of mankind, none has been more effective than that which deludes them with paper money.”Daniel Webster (1782-1852)

  7. #17

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    Quote Originally Posted by silverone View Post
    I Never Have and I Never will have any 'stock' if i did have anyone WILL me some I'd SELL the $hit ASAP
    I’m glad my Dad a different mindset than you do. He used the stock market to turn a $2000 investment into a $2,000,000+ nest egg. He didn’t “play” the market. He made some prudent investments in quality tech companies back in the late 80s and early 90s and then just held them. Aside from the phenomenal increase in value, those stocks currently pay about $24,000 annually in dividends.

    To each his own, but my Dad always believed the stock market was the only avenue the little guy has to make serious money without working his ass off or taking on a lot of debt.

    YMMV.
    "It's the lure of easy money - It's got a very strong appeal." - Glenn Frey (The Smuggler's Blues)

    "A wise and frugal government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned." - Thomas Jefferson

  8. #18

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    Trouble is so many people work on FOMO and buy at the top and sell at the bottom and then b itch that the stock market sucks.

    Same thing with gold. Anyone run to the LCS last week with their 401K savings? No? I'll bet a bunch of people did. Buy high! Where were they when POG was $1,600 a few months ago?

    JBitcoin, today it's what $40K? A few months ago it was $17K - $18K. Everybody was too afraid to buy at $17K are now lining up to buy at $40K. Guess what? You missed a good run up folks.

    I said look at mining stocks a few months ago everyone said they suck. Yeah, you're correct. Time to buy them! Not mid-2024 when they're up 5x, 10x from the bottom price of this past summer. But no mining stock FOMO was happening 5 months ago. So we'll be seeing it next year. Hop on the FOMO train - non-stop ride to chapter 11. They'll be too late once again.

    Buy high sell low goes on and on and on. You've got to be able to say to yourself, I missed this run up and I'll have to wait for the next fall back to get in. Buy what's out of favor. Then wait.
    American Legion Preamble: https://www.legion.org/preamble

  9. #19
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    Why are the stock prices fluctuating so much ? It can actually be explained,
    even scientifically.

    George Soros sensed it when he created the theory of "reflexivity". Ie buying
    stocks begets even more buying of stocks.

    Now this has been explained mathematically, in the report below:

    https://www.nber.org/system/files/wo...967/w28967.pdf

    Q: When an investor buys 1 $ of stocks, what happens with the valuation of
    the whole stocks aggregate market ? It does not go up by 1 $. It goes up
    by 5 $. To be exact it goes up by 3 or 8 $, but to simplify let us say by 5 $.

    A simple example:
    "An investor can invest can invest in two funds: a pure bond fund and a
    mixed fund, invested 20 % in bonds and 80 % in stocks. What happens
    if the investor sells 1 $ of the pure bond fund and buys 1$ of the mixed fund ?
    The mixed fund must invest this 1 $ into bonds and stocks, but this pushes up
    the prices of stocks , which again makes the mixed fund want to invest more
    in stocks, which pushes the prices of stocks up and so on.At equilibrium, we find
    that the total value of the equity market increases by 5 $."

    The stock prices are inelastic, very inelastic.

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