Ok so when the fuck DO I buy?

ZeroReborn
ZeroReborn

never catch a falling knife
buy low, sell high

Ok so when the fuck DO I buy?

All urls found in this thread:
http://www.econ.yale.edu/~shiller/behfin/2004-04-10/barber-lee-liu-odean.pdf
http://www.investorhome.com/daytrade/profits.htm
http://faculty.haas.berkeley.edu/odean/papers/Day%20Traders/Day%20Trading%20Skill%20110523.pdf
http://www.iassa.co.za/wp-content/uploads/journals/075/iaj-75-no-3-ryu-final.pdf
BinaryMan
BinaryMan

when it's low

Stupidasole
Stupidasole

@ZeroReborn

use your own judgment and hope you get lucky. you can never know for sure, unless you're a whale with other whale friends.

Supergrass
Supergrass

@ZeroReborn
Best advice I've ever heard: Ignore the Wall Street talking-heads (whose job is literally to convince dumb traders into buying stupid shit) and only invest in companies that you understand well enough to reasonably expect them to continue being successful.

ex.) Coca-Cola is a decent (not amazing, but very safe) choice because they aren't going out of business anytime soon. Same with Apple, Microsoft, etc.
ex.) HotNewStartup is an example of what not to buy, because it isn't very stable and you don't have reason to expect it to continue to be profitable.

It's about managing risk based on true market conditions, not just people's airheaded beliefs.

TreeEater
TreeEater

@ZeroReborn
Ok so when the fuck DO I buy?
You guess, like everyone else trying to time the market. You've got maybe a 50-50% chance of making a decent decision, so just go for it.

Of course, even if you get the buy decision right, you have to do the same thing on the sell decision. That's another 50-50% call, but maybe you'll get lucky again!

Of course, even if you get the call right twice, now your money is sitting idle and needs to be re-invested. So flip the coin and buy again. 50-50% chance. Then sell the new investment. 50-50% chance. Then do it over and over again all month, all year, and repeat for most of your adult life.

Granted, you don't have to make the right decision every single time. A few mistakes won't doom you, as long as you stay above average. So you only need to call the coin flip right at least 6 times out of 10.

Oh but wait, if you do that, you're only keeping pace with the index fags and at much greater risk and expense. So you need to do better in order to actually make all this trading worthwhile. So you've got to get that coin flip correct 7 times out of 10 to actually win.

Ooops, I forgot about all the fees and commissions, plus the taxes that can't be avoided with active trading. So you actually need to get the coin flip right at least 8 times out of 10.

Fortunately, there's an equation for those odds (binomial distribution) and we find out your chances of getting at least 8 correct calls out of 10 is only about 5%. Yikes.

And before you dismiss this little example as a made up hypothetical .... isn't it interesting that the academic research shows that only 5% of active traders outperform an index fund? 5%, just like my hypothetical. Makes you think, huh?

StonedTime
StonedTime

Buy stable, profitable companies. Short meme companies like Twitter and Square with low growth or no profits.

VisualMaster
VisualMaster

@TreeEater
you have to do the same thing on the sell decision
Stopped reading here. Who told you we ever wanted to sell?

active trading
Stopped reading here (twice). Nice assumptions again.

TechHater
TechHater

@TreeEater
Also: OP didn't even mention he wanted to buy individual stock. His concerns, and your answer, still remain for anyone wanting to buy any index fund that's currently going down.

Is buying an index fund (say an Emerging Markets index fund) a coin flip?

Stupidasole
Stupidasole

@VisualMaster
Who told you we ever wanted to sell?
Dunno, maybe it was "sell high" part in OP's post. Reading ftw.
@TechHater
Timing the market is timing the market. The investment or asset doesn't matter. And "buy low sell high" is timing the market.

Is this too complicated for you? I've done the ELI5 version, but maybe I can make it even easier to understand.

Fried_Sushi
Fried_Sushi

If it's a first buy (and hold)
My opinion is you can wait as long as you want
There's no such thing as "missing out"
When you have the money you have the luxury of buying in at any time

Garbage Can Lid
Garbage Can Lid

@TreeEater
academic research shows that only 5% of active traders outperform an index fund
Jesus, you must have lost a shitload of money.
Was it MGT?
It was MGT, wasn't it?

farquit
farquit

@Garbage Can Lid
I get it user: when you have no ability to counter the message, attack the messenger.

Next we'll be hearing about all the one-off investing wonderkinds who beat the market all the time. Out of the millions who try, we'll probably get a dozen or so exceptions (Buffett, Soros, Lynch) plus a few anons right here on Veeky Forums who make ungodly profits but are unable to provide proof for reasons.

takes2long
takes2long

@Stupidasole
But OP wasn't concerned with selling too, or he would have asked: when do I sell?

"buy low sell high" is timing the market

No. Assessing the fundamental value of an asset, or simply watching at historical averages, isn't "timing the market" since you can be indifferent to the future market price (which is generally up over the long term anyway).

Your point of view is extraordinarily regressive since your conclusion is JUST BUY ANYTHING AT ANY PRICE BRO, WE JUST DONT KNOW XDDDD. It is the glorification of ignorance, and the debasement of any form of knowledge or even mere common sense.

Bidwell
Bidwell

@ZeroReborn
Try to wait for an upswing, when it's coming out of the drop

likme
likme

@farquit
Next we'll be hearing
Not really, I would just note that you must be very angry to spend your time composing such a rage filled post.

There is no need to be upset.

Gigastrength
Gigastrength

If its called ethereum, then buy it

Techpill
Techpill

@Stupidasole
And please remember this moronic sentence of yours...

The investment or asset doesn't matter

...before trying to equate "the market" with the S&P 500. You literally just said all the markets in the world, for all possible assets, were utterly efficient (including the Dogecoin market, Pakistani small caps, or Somalian real estate).

This is not economics anymore, this is religion. And a dumb one at that.

Sharpcharm
Sharpcharm

Just slap a fibonaci on it and go from there :^)

Snarelure
Snarelure

@takes2long
@Techpill
It's funny that you're triggered so easily that you have to make up facts. I've never advocated any particular investment strategy nor have I once discussion the efficiency of markets. I merely pointed out the folly of active trading, and explained it in simple terms.

Maybe instead of spurging misstatements, you have something constructive to offer the thread? A better approach? Some evidence or research? A joke or a meme? Anything would be nice, compared to your serial shitposts.

Skullbone
Skullbone

Actually bogleheads.org would say "Decide on your allocation of BND and VTI, and spend 100% of your tomorrow".

Yes it will not be the lowest, but you can't predict the future either.

Nude_Bikergirl
Nude_Bikergirl

@Snarelure
I've never advocated any particular investment strategy
You shilled for index funds (which are good investments) in the usual Vanguard shill manner.

nor have I once discussion the efficiency of markets
So "you can't time the market" but the markets (notice the plural) aren't efficient? What is this novelty? Or are you simply trolling?

triggered
misstatements
shitposts
Kys.

Some evidence or research?
I recognize you, you're the fag who will deny any kind of evidence that's not peer-reviewed in a prestigious academic journal. And even then, you'd use the famous arguments "YOUR RESEARCH DOESNT HAVE THE NOBEL PRIZE LIKE FAMA LOL CHECKMATE" or "YOU CANT PROVE ITS NOT LUCK IF YOU BEAT THE INDEX SINCE WE NEED 1,000 YEARS TO PROVE THAT LELELEL".

A better approach?
Google "value investing" and "behavioral economics", you will learn a lot of exciting things!!!!!

girlDog
girlDog

@ZeroReborn
Buy high, sell higher

Illusionz
Illusionz

@Nude_Bikergirl
my tinfoil hat says you're a Vanguard employee, I recognize you
Wow, so you really have nothing to add to the thread, huh? Are you so completely bored that all you do is shitpost all day? What a sad little life...

Carnalpleasure
Carnalpleasure

@ZeroReborn
Pick a company that you feel you already have a good understanding of. Even if you are a NEET you probably have a better understanding of the business prospects of some large video game publisher than the average investor does. Take this knowledge and add to it. Look up the profits and upcoming big sales possibilities for the company. Consider any costs or ballooning budget issues that the company might have to face in the future. If you feel that the company will do well with all of the above considered then buy.

As you go through life you'll gain more experience with different companies just by interacting with them day to day. Perhaps they are a major customer or supplier for the business you work at. Perhaps you have friends and family who work for these businesses. You don't have to steal their top secret business info to get a handle on how a company is doing and what its prospects are. If you keep your eyes and ears open and then follow it up with research you can make good money trading on businesses you know well.

Buy them when you see that the market isn't fully grasping their value and sell them when the market is too bullish about their real situation. When they say never catch a falling knife they mean don't try to snipe a stock that is in a spiral where no one knows what the bottom will be. That's a fundamentally different situation. You want stocks where you know more than the average investor. When you're trying to get in on something that everyone knows then you already missed it.

DeathDog
DeathDog

Sure is shitlord in here

Btw it's near impossible to do long term statistical studies of active traders who profit from skilled entry and exit points. Here's the thing, professional day traders exist! They don't publish prospectives for us to study but working with their own money gives them to change strategy whenever they want. Option trade doesn't work? You got exercised on your short put and forced to hold a stock. But who says you have to sell it at a loss? Now that stock sits in your account until you can break even or profit. Good luck regulating a fund manager who changes the rules like that.. you can't. but who cares it's your money. Tl;Dr fuck off

BinaryMan
BinaryMan

@DeathDog
Btw it's near impossible to do long term statistical studies of active traders who profit from skilled entry and exit points. Here's the thing, professional day traders exist!
Not so hard, actually. It's been done many times.

http://www.econ.yale.edu/~shiller/behfin/2004-04-10/barber-lee-liu-odean.pdf
http://www.investorhome.com/daytrade/profits.htm
http://faculty.haas.berkeley.edu/odean/papers/Day%20Traders/Day%20Trading%20Skill%20110523.pdf
http://www.iassa.co.za/wp-content/uploads/journals/075/iaj-75-no-3-ryu-final.pdf

You're not a wizard, faggot. You don't practice magical arts that can't be understood by muggles. You practice a shitty trading strategy that has been proven suboptimal, and then you've wrapped your small brain in a cocoon of denial.

Btw, this is why your type gets so triggered when people point out the glaring defects of active trading: your self-defense mechanisms are so frail that they can't stand up to even light scrutiny.

Meanwhile, indexers sleep soundly night after night. Makes you think....

girlDog
girlDog

@Illusionz
I recognize you're the usual annoyance who always posts the same thing, and gets mad when we talk about Japan (it doesn't c-count because it's s-special lol).

My life is okay though, thanks for caring.

@BinaryMan
Meanwhile, indexers sleep soundly night after night
Some Bogleheads weren't that calm in 2008, when the market was crashing and they were suddenly losing 40% of their net worth due to poor risk management.

They weren't that calm either in 2000, when they realized the oh-so-perfect S&P 500 had a hefty 35% allocation in tech stocks, hence big losses when the tech bubble exploded (but I guess there are no bubbles since the market is always so efficient?).

The next bear market will be even more comical for nervous index funds holders IMO, since all the madmen will sell the entire market at once, creating a negative feedback loop of even bigger proportions (for indexing is more prevalent today than in 2000 or 2008).

I'm waiting for your answer, I hope it will be something insightful like "ur a shitposter" or "ur life sucks lel".

SomethingNew
SomethingNew

@TreeEater
Of course, even if you get the buy decision right, you have to do the same thing on the sell decision. That's another 50-50% call, but maybe you'll get lucky again!

In what sense is this a separate call from the first one? Either the price went up from when you bought it or it went down. You don't need to sell at the peak

likme
likme

Make a list of investments you believe in, then catch every single knife in those investments.

Flameblow
Flameblow

@likme
Yes, this often works when market overreact to macroeconomic conditions.

For example, there were a lot of buying opportunities of solid companies in February.

Stupidasole
Stupidasole

@girlDog
Investors who choose a long-term strategy but panicked and sold based on fear got hurt by market fluctuation.
FUCKING DUH.

How about the indexers who, you know, actually followed the strategy and held on to their holdings, adding when they had excess investable cash? How'd they do?

Oh, and don't kid yourself ... Its not hard to tell a shitposter when I see one.

Spazyfool
Spazyfool

@SomethingNew
someone doesn't understand what "sell high" means

King_Martha
King_Martha

@Spazyfool

buy low and sell high doesn't mean "buy at the absolute minimum and sell at the absolute maximum" retard, there is a 0% chance of getting that. After you buy and it goes up a bit you sell. You don't need to stick around hoping that the value goes down after you sell, you've already made your profit.

girlDog
girlDog

@Stupidasole
How about the indexers who, you know, actually followed the strategy...
Do you remember what Bogleheads was like in 2008? It was not: "Let's follow the strategy as usual, guys!! Glorious opportunity to buy anyway!!!!!"

Go see the archive to remember that many indexers weren't sleeping well at all. Because indexing makes you swallow all the losses of the index with no protection.

And retrospectively calling the 2008 crisis "market fluctuation", like it was some kind of correction, is funny. The entire financial system was at stake.

ur a shitposter lol
See you in the next bear market.

WebTool
WebTool

How do I set my stop loss the smartest?

DeathDog
DeathDog

@girlDog
Because indexing makes you swallow all the losses of the index with no protection.
How do you have losses if you don't sell? Maybe things are different in whatever third-world country you live in, but in the U.S. you have to actually sell a security to realize a gain or loss.

No wonder you're having trouble keeping up the discussion. Things must be very different in a place where you trade stocks for goats.

See you in the next bear market.
Good luck with that, Pajeet. You'll only have a small window.

JunkTop
JunkTop

@DeathDog
small window.
3 months to 2 years, during which the media is going off the chain nonstop telling everyone about how good of a time it is to buy
errrrr..... One couldn't dream of an easier task.

PurpleCharger
PurpleCharger

@ZeroReborn
"Buy low sell high" is as stupid a phrase as "work smart not hard". It's just so fucking obvious.

Lunatick
Lunatick

@JunkTop
he thinks the media is going to help him spot market bottoms or tops
Jesus, this board never fails to disappoint.

Crazy_Nice
Crazy_Nice

@Lunatick
Jesus, this board never fails to disappoint.
Jesus, suck Jack Bogle's dick a little more

cum2soon
cum2soon

@Crazy_Nice
Is this really the best you can do? Are you really too stupid to articulate a cogent argument against indexing? Did I hurt your feelings that badly?

askme
askme

Does anyone else here think that EPRS is primed for liftoff?

kizzmybutt
kizzmybutt

@cum2soon
Better?

DeathDog
DeathDog

@Lunatick
You don't need to spot the bottom, any time the market drops 30-50% it's time to buy. Are you implying the media won't be talking the next time the S&P drops 30%? Boy I'd love to see that.

Ignoramus
Ignoramus

@Gigastrength
Etherium is a mess

w8t4u
w8t4u

@Ignoramus
Its going up, who cares

likme
likme

@DeathDog
How do you have losses if you don't sell?
Fucking moron. So that's how low you can go...

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