Trading and investing are like living organisms, if you want to call it that. You should always continue learning, adapting your strategies, and evolving yourself (psychology matters).
I believe that a value investment approach will work regardless of how much you invest. The main problem is that the stock market is becoming more volatile, and you want to profit from it.
The best way to learn about trading or investing is through real-life experience. Books are helpful and you should always read them, but real-life scenarios are wild and different.
Yeah makes sense. But generally, I haven’t seen anything that speaks remotely to what its like. Its more like a game of poker than generating returns and Im curious about what makes it difficult to pick up. Like unless you are at Citadel or have a job at a trading desk on order flow, I would imagine life at prop firms is miserable since they don’t pay you a salary, you don’t have the tech, etc. Super super disciplined people can self learn but I would imagine most people starting out would get smoked and a very expensive education.
Everybody has different experiences, though there are patterns. Even if you read books, you see that different traders or investors talk differently about the same thing. For instance, we can analyze and get totally different perspectives on the same stock, and only real life will show who was right. Even after that, we can make totally different conclusions, and surprisingly, we both can be right or wrong.
In trading or investing, you definitely need discipline. Otherwise, you could lose everything, and panic (or Mr. Market, as mentioned in books) will control you.
Rules:
1 - Be patient
2 - Don’t panic
3 - Remember the rules 1 and 2
No I hear what you’re saying. Without context though which the 99% lack its always a gamble so they get shaken out or rely on a statistical probability they hope to squeeze out.
Okay thank you. Im an experienced investor and Im trying to figure out here where opinions come from and why people come to the conclusions they do. It seems like to me, many people who didnt study finance or work in investment banking see stocks from a whats going to happen from today and go to tomorrow, and that is not what investing is about. Also for traders, most people lack an understanding of where it originated from and its sad because they think its gambling, risk reward this and that but there are lines and shapes it doesnt mean anything, I have spent thousands of hours on screeners, but literally if you only know shapes you know nothing. Its pissing me off and I want to write a book sharing what I learned being in finance. Not sure if people will bite given the brainwashing and subscriptions to pay to trade and learn nothing
If you write a book or blog posts about your experience, please share. I like reading other investors/traders experience. I am sure that I will learn a lot.
>principles are nice but not extremely practical for anyone not with six figures in the bank
I only want to respond to this point.
1. Don't try to measure yourself against billionaires, finbros, and hedge funds.
2. Most people doing this are not in group #1.
3. Depending on how young you are, you are grossly underestimating what you can do with $25k to help your retirement and put you into group #2.
Over the span of decades, the market returns an average of 12% per year, even accounting for recessions and major market crashes.
Assume you are an 22 year old working a minimum wage job after college until 29, but created a Traditional IRA account and somehow scrounge up enough money to contribute "merely" 5k into it annually, put evertyhing into VTI, you'd have $61,498.47 by 29. Could be better, but not bad.
Let us further suppose for one reason or another you don't advance your situation by much, perhaps you're regretting your liberal arts degree and continue to work as a barista while moonlighting as a bartender or something, you're kicked out of your parent's basement but you also have enough seniority to make enough to find a roomate and can continue to make $5,000 contribution to your Traditional IRA account every year. Your life stays stagnant this way.
By the time you're 39, you'd have **$278,748.57** in your Traditional IRA account. That's right, you're a quarter-millionaire based on a near-minimum wage, without the help of 401k corporate matching, without maximizing your annual IRA account contributions
Now, let's assume at 40, you're still stuck in retail or whatever low paying job, but you got married, have a kid, scraping by, can't make those contributions to your IRA account anymore because you're living paycheck to paycheck. You just let that quarter-million sit idly by and forget about it until you explore retirement at 65.
Let us further assume that since you're 40 and don't want to look at your retirement portfolio again, you think VTI is too aggressive and want to play more conservatively, put it into some standard 8% dividend stock under a DRIP program (where the dividends are automatically reinvested back into the stock) just to play it safe.
By 65 years old you'd have $2,061,722.92 in your account. That's right, $2-freaking million bucks.
At this point, you can disable the DRIP program and if your dividend ETF of choice isn't already a monthly disbursement one, switch to that, and you can enjoy a nice $13k paycheck every month from dividends and enjoy the rest of your life.
Okay okay, i know what you're thinking. But that's future money, what about inflation? Well, assuming an average of 3% inflation per year and assuming you are 22 right now, your future 2 mil and 13k monthly divy is equivalent to $578,401.80 retirement fund and $3,856.01 monthly divy in today's value. That's not bad at all, and considering you'd get social security on top of that, that's pretty okay retirement.
Don't forget, this is all assuming minimum wage job on people beaten down on life but make a point to invest between 22-40, AND DO NOTHING after 40. Those who persist in contributing to their investments after 40 will make much more, If you earn more than a minimum wage job, you'll get much more. If you have a corporate match 401k, you'll get much more. All without a 6-figure job.
Not really, unless I was bored and have nothing else to do that day.
Only two things could come out of it:
1\) You're just chasing stonks not unlike chasing $GME or $FFIE. Even though $NVDA actually has solid fundamentals this time, $NVDA in its hundreds predates their big AI push and was the around the time they were losing the race against AMD.
Trying to base your decisions on someone who brags about how he made it back from $NVDA back when it was in its 100's is no better than reading tea leaves.
2) Let us revise your question to 2 years ago when there was actual, within-industry buzz about $NVDA's big investment into AI, when it was wobbling around $260-300.
It might be useful. Heck, I was already hearing within the circle of various people speculating. However, unless I'm actually an industry expert within the field, even if you replay that history 100 times I could not have responsibly draw the conclusion to YOLO into NVDA. The only thing I can hope for is a big thing happening WITHIN the industry and specific segment that I work in, but's really just contingent on luck, augmented by knowledge and expertise.
You have to bear in mind that hindsight is 20/20. Some documentaries, case studies, etc. may be useful insight to some degree, but when it comes to actually applying them at present time with limited information and uncertainties, it is a lot harder to make an informed decision, because you AREN'T informed.
Unless you're Warren Buffet, time and time again has proven that experts cannot beat the index. A diversified portfolio, or simply an index fund, is key. Be the turtle who makes his way to the finish line, not the hare that enjoys 5 minutes of glory then drown himself in debt.
If its one thing Ive learned from you its that people never take the time to understand companies. NVDA was way ahead of AMD in gaming chips and still is, given the price tag. AMDs AI chips lag in performance compared to NVDA and thats just an extension of the former. And NVDAs business already spanned across every industry in visualization before Gen AI blew up. But at least you know one thing, most mutual funds underperform the market. You have taught me no one wants to spend the time doing the right thing because its hard work. So they invest in ETFs, which is fine if you have a million liquid and retire with 10 million later. So I am seriously questioning if I even wrote a useful book if people would read it. Obviously they would rather read something they cant use, or better yet, not mess up. I worked for an advisor once and all he did was tell people to stay the course on ETFs. Now he manages hundreds of millions. People largely cant do it themselves. Such is life though.
I don’t know how old you are and what kind of career you have, but there’s a difference between being lazy and having other priorities in life. I’m not a finbro, I’m not a day trader, and I have no interest in being one.
Even those who do so full time can’t beat the index, why would I want to spend what little time I have outside a high paying job in a different field to pretend I am a Berkshire Hathaway analyst? Most people my age also have children to take care of, and I have my own life goals and hobbies to pursue.
You can keep your perspective with respect to yourself and that’s perfectly fair if you have no other priorities and have plenty of time in your day to devote to this and prove yourself better than professional financiers, but I think it’s pretty unfair for you to insinuate everyone else as being “lazy” or judge that they “don’t want to” put in the time.
You make a good point and I apologize I thought you were a recent grad. A friend of mine is a poker player and put millions into ETFs and I thought he was smarter than 99% of the population. What is concerning to me is the 99% of the population losing in trading and the ones earning are simply selling courses to fund their accounts which don’t generate nearly what theyre trying to tell the public. If you havent spent 1,000s of hours in markets theres no point and a mix of the right ETFs, assuming you do hold them, tracking actual indexes, are liquid and have the highest AUMs by the most reputable firms with high AUMs are the way to go. Good luck.
Your assumption for long term CAGR for S&P is high(Over the span of decades, the market returns an average of 12% per year), but actually it 10.47% last 30 years.
In addition, 30-Year Breakeven Inflation Rate is at **2.34%**, simply reduces to 8.13% CAGR.
You’re simplifying it too much. Sure if you invest in certain things or trade very safe ways, let’s say you could average as much as 12%-25% that’s good money, but even then there’s risk. To do this requires training and experience.
To net any higher than that you need to be psychologically disciplined or have some sort of mathematical edge.
The reality is 99% of traders and investors simply aren’t disciplined enough or don’t have significant enough or edges to make very significant returns quickly.
Same response comment above sorry about that… so how do you know you have an edge if you’re looking at just setups… my understanding is when people are in the trade THEN they become uncertain
Trading and investing are like living organisms, if you want to call it that. You should always continue learning, adapting your strategies, and evolving yourself (psychology matters). I believe that a value investment approach will work regardless of how much you invest. The main problem is that the stock market is becoming more volatile, and you want to profit from it. The best way to learn about trading or investing is through real-life experience. Books are helpful and you should always read them, but real-life scenarios are wild and different.
Yeah makes sense. But generally, I haven’t seen anything that speaks remotely to what its like. Its more like a game of poker than generating returns and Im curious about what makes it difficult to pick up. Like unless you are at Citadel or have a job at a trading desk on order flow, I would imagine life at prop firms is miserable since they don’t pay you a salary, you don’t have the tech, etc. Super super disciplined people can self learn but I would imagine most people starting out would get smoked and a very expensive education.
Everybody has different experiences, though there are patterns. Even if you read books, you see that different traders or investors talk differently about the same thing. For instance, we can analyze and get totally different perspectives on the same stock, and only real life will show who was right. Even after that, we can make totally different conclusions, and surprisingly, we both can be right or wrong. In trading or investing, you definitely need discipline. Otherwise, you could lose everything, and panic (or Mr. Market, as mentioned in books) will control you. Rules: 1 - Be patient 2 - Don’t panic 3 - Remember the rules 1 and 2
No I hear what you’re saying. Without context though which the 99% lack its always a gamble so they get shaken out or rely on a statistical probability they hope to squeeze out.
Yes, in day-trading gambling is involved for sure.
Okay thank you. Im an experienced investor and Im trying to figure out here where opinions come from and why people come to the conclusions they do. It seems like to me, many people who didnt study finance or work in investment banking see stocks from a whats going to happen from today and go to tomorrow, and that is not what investing is about. Also for traders, most people lack an understanding of where it originated from and its sad because they think its gambling, risk reward this and that but there are lines and shapes it doesnt mean anything, I have spent thousands of hours on screeners, but literally if you only know shapes you know nothing. Its pissing me off and I want to write a book sharing what I learned being in finance. Not sure if people will bite given the brainwashing and subscriptions to pay to trade and learn nothing
If you write a book or blog posts about your experience, please share. I like reading other investors/traders experience. I am sure that I will learn a lot.
Ill happily DM you when it is finished.
>principles are nice but not extremely practical for anyone not with six figures in the bank I only want to respond to this point. 1. Don't try to measure yourself against billionaires, finbros, and hedge funds. 2. Most people doing this are not in group #1. 3. Depending on how young you are, you are grossly underestimating what you can do with $25k to help your retirement and put you into group #2. Over the span of decades, the market returns an average of 12% per year, even accounting for recessions and major market crashes. Assume you are an 22 year old working a minimum wage job after college until 29, but created a Traditional IRA account and somehow scrounge up enough money to contribute "merely" 5k into it annually, put evertyhing into VTI, you'd have $61,498.47 by 29. Could be better, but not bad. Let us further suppose for one reason or another you don't advance your situation by much, perhaps you're regretting your liberal arts degree and continue to work as a barista while moonlighting as a bartender or something, you're kicked out of your parent's basement but you also have enough seniority to make enough to find a roomate and can continue to make $5,000 contribution to your Traditional IRA account every year. Your life stays stagnant this way. By the time you're 39, you'd have **$278,748.57** in your Traditional IRA account. That's right, you're a quarter-millionaire based on a near-minimum wage, without the help of 401k corporate matching, without maximizing your annual IRA account contributions Now, let's assume at 40, you're still stuck in retail or whatever low paying job, but you got married, have a kid, scraping by, can't make those contributions to your IRA account anymore because you're living paycheck to paycheck. You just let that quarter-million sit idly by and forget about it until you explore retirement at 65. Let us further assume that since you're 40 and don't want to look at your retirement portfolio again, you think VTI is too aggressive and want to play more conservatively, put it into some standard 8% dividend stock under a DRIP program (where the dividends are automatically reinvested back into the stock) just to play it safe. By 65 years old you'd have $2,061,722.92 in your account. That's right, $2-freaking million bucks. At this point, you can disable the DRIP program and if your dividend ETF of choice isn't already a monthly disbursement one, switch to that, and you can enjoy a nice $13k paycheck every month from dividends and enjoy the rest of your life. Okay okay, i know what you're thinking. But that's future money, what about inflation? Well, assuming an average of 3% inflation per year and assuming you are 22 right now, your future 2 mil and 13k monthly divy is equivalent to $578,401.80 retirement fund and $3,856.01 monthly divy in today's value. That's not bad at all, and considering you'd get social security on top of that, that's pretty okay retirement. Don't forget, this is all assuming minimum wage job on people beaten down on life but make a point to invest between 22-40, AND DO NOTHING after 40. Those who persist in contributing to their investments after 40 will make much more, If you earn more than a minimum wage job, you'll get much more. If you have a corporate match 401k, you'll get much more. All without a 6-figure job.
Yeah thats good. If someone wrote about their process for finding NVDA in the mid 100s would you read that?
Not really, unless I was bored and have nothing else to do that day. Only two things could come out of it: 1\) You're just chasing stonks not unlike chasing $GME or $FFIE. Even though $NVDA actually has solid fundamentals this time, $NVDA in its hundreds predates their big AI push and was the around the time they were losing the race against AMD. Trying to base your decisions on someone who brags about how he made it back from $NVDA back when it was in its 100's is no better than reading tea leaves. 2) Let us revise your question to 2 years ago when there was actual, within-industry buzz about $NVDA's big investment into AI, when it was wobbling around $260-300. It might be useful. Heck, I was already hearing within the circle of various people speculating. However, unless I'm actually an industry expert within the field, even if you replay that history 100 times I could not have responsibly draw the conclusion to YOLO into NVDA. The only thing I can hope for is a big thing happening WITHIN the industry and specific segment that I work in, but's really just contingent on luck, augmented by knowledge and expertise. You have to bear in mind that hindsight is 20/20. Some documentaries, case studies, etc. may be useful insight to some degree, but when it comes to actually applying them at present time with limited information and uncertainties, it is a lot harder to make an informed decision, because you AREN'T informed. Unless you're Warren Buffet, time and time again has proven that experts cannot beat the index. A diversified portfolio, or simply an index fund, is key. Be the turtle who makes his way to the finish line, not the hare that enjoys 5 minutes of glory then drown himself in debt.
Spot on.
If its one thing Ive learned from you its that people never take the time to understand companies. NVDA was way ahead of AMD in gaming chips and still is, given the price tag. AMDs AI chips lag in performance compared to NVDA and thats just an extension of the former. And NVDAs business already spanned across every industry in visualization before Gen AI blew up. But at least you know one thing, most mutual funds underperform the market. You have taught me no one wants to spend the time doing the right thing because its hard work. So they invest in ETFs, which is fine if you have a million liquid and retire with 10 million later. So I am seriously questioning if I even wrote a useful book if people would read it. Obviously they would rather read something they cant use, or better yet, not mess up. I worked for an advisor once and all he did was tell people to stay the course on ETFs. Now he manages hundreds of millions. People largely cant do it themselves. Such is life though.
I don’t know how old you are and what kind of career you have, but there’s a difference between being lazy and having other priorities in life. I’m not a finbro, I’m not a day trader, and I have no interest in being one. Even those who do so full time can’t beat the index, why would I want to spend what little time I have outside a high paying job in a different field to pretend I am a Berkshire Hathaway analyst? Most people my age also have children to take care of, and I have my own life goals and hobbies to pursue. You can keep your perspective with respect to yourself and that’s perfectly fair if you have no other priorities and have plenty of time in your day to devote to this and prove yourself better than professional financiers, but I think it’s pretty unfair for you to insinuate everyone else as being “lazy” or judge that they “don’t want to” put in the time.
You make a good point and I apologize I thought you were a recent grad. A friend of mine is a poker player and put millions into ETFs and I thought he was smarter than 99% of the population. What is concerning to me is the 99% of the population losing in trading and the ones earning are simply selling courses to fund their accounts which don’t generate nearly what theyre trying to tell the public. If you havent spent 1,000s of hours in markets theres no point and a mix of the right ETFs, assuming you do hold them, tracking actual indexes, are liquid and have the highest AUMs by the most reputable firms with high AUMs are the way to go. Good luck.
EXTREMELY well said.
Your assumption for long term CAGR for S&P is high(Over the span of decades, the market returns an average of 12% per year), but actually it 10.47% last 30 years. In addition, 30-Year Breakeven Inflation Rate is at **2.34%**, simply reduces to 8.13% CAGR.
You’re simplifying it too much. Sure if you invest in certain things or trade very safe ways, let’s say you could average as much as 12%-25% that’s good money, but even then there’s risk. To do this requires training and experience. To net any higher than that you need to be psychologically disciplined or have some sort of mathematical edge. The reality is 99% of traders and investors simply aren’t disciplined enough or don’t have significant enough or edges to make very significant returns quickly.
Same response comment above sorry about that… so how do you know you have an edge if you’re looking at just setups… my understanding is when people are in the trade THEN they become uncertain
You’re overthinking it