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i-b-goB
Social climber
Wise Acres
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Oct 24, 2016 - 03:17pm PT
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chill
climber
The fat part of the bell-curve
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Oct 24, 2016 - 03:30pm PT
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Reilly, don't say that you weren't warned.
Indeed. As I scrounge for scraps to eat in the dystopian wasteland that will be my retirement years, I will repeat to myself "Why didn't I listen to Flip Flop? That guy on the internet who warned me."
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NutAgain!
Trad climber
South Pasadena, CA
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Oct 24, 2016 - 03:36pm PT
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A personal anecdote for the edification of those who have not lived long enough to invest through a big boom and bust cycle of stocks.
In a couple years of the dotcom boom (late 90s) I earned about 300% return on my investment, because of a high level of risk I tolerated. I thought I was 'diversified' because I had 1000 shares of "everything under the sun": Cisco, Oracle, Sun, IBM, Amazon, Yahoo, Microsoft, and a bunch of smaller tech companies that I was familiar with because of my job. Branched out into Starbucks, Fedex, and blah blah. I probably had about 40 different stocks. But it was a lot less diversified than I thought.
Every day of that green pie chart lulled me into thinking it never rained. The red pie chart days were just an excuse to buy more because it would surely rebound the next day or week. When day after day the red pie chart appeared, I though I just needed a strong stomach to tolerate the risk and wait it out. Except I was stupid and greedy using "margin", meaning I had loans from the stock trading company to control even more stocks than I could afford. On the good days I made ridiculous amounts of money, more than what a fair number of people here might make in a year. But day after day of red pie chart led to "margin calls" where the stock trading companies wanted their loans paid back asap (like end of the day or the next day) before I ran out of equity. So they would automatically sell my stocks on the worst days to pay back the loans. I persisted like a dumb ass to stay as invested as I could for when it would all rebound, but it just kept riding into the toilet and one day woke up to discover I had not only lost all of my gains, but also 98% of what I had invested! It is crazy how an otherwise reasonably intelligent person can make such ludicrous decisions. In part it was from youthful inexperience of never seeing a downturn, lack of understanding of the risk, and wishful thinking.
I have been gun shy ever since, not trying to get rich quick. No stocks certainly makes my taxes easier to prepare! No spreadsheets and tracking back purchase prices and dates and splits to figure my cost basis. At some point I should get back in the game, but for now I'm saving for primary residence fix-up and I don't want to "invest"/gamble anything I'm not willing to lose.
In hindsight, my strategy actually would have paid off very well if I had not bought 2/3 of my portfolio using loans from the stock trading company. Every stock I had that tanked in the dotcom bust came roaring back within a few years. Damn margin! Damn greed! At least I was young learning that lesson and not blowing my retirement fund or children's college fund.
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rbord
Boulder climber
atlanta
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Oct 24, 2016 - 03:58pm PT
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Buy low and sell high. What's so hard about that?
If in doubt, listen to the advice of someone who listened to the advice of someone who they believe knew what they were talking about, based on their own incomplete information and irrational analysis of that information, and their faith that the other person was smarter and more informed than they are. What could go wrong? If Trump says it's rigged, who are you to disbelieve him?
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dirtbag
climber
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Oct 28, 2016 - 08:13am PT
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Am I supposed to start panicking?
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Reilly
Mountain climber
The Other Monrovia- CA
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Oct 28, 2016 - 09:28am PT
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Well, Dirtbag, it depends upon whether you want to live in a single-wide or a double-wide,
or if you just to continue dirtbagging, doesn't it? Now I could have given a more substantive
answer but we've all seen that those are a waste of time as flippancy is the order of the day.
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Jon Beck
Trad climber
Oceanside
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Thanks again Obama
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Reilly
Mountain climber
The Other Monrovia- CA
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I'm pulling money out of the equity markets. These valuations are getting scary,
as in 1929, 2000, and 2008 scary. It isn't a matter of if. Leaving money
in short term bonds. I'd put money into junk bonds before I would long term bonds.
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Studly
Trad climber
WA
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Our National Debt will be at 20 trillion when Trump takes office. It was about 8 trillion when Obama first took office. But if we just ignore it, then its all peaches and cream.
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couchmaster
climber
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No one can predict the next crash. As an aside, JP Morgan called 2017 the top of the real estate market approx 2 years back, so keep some of yer powder dry.
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Winemaker
Sport climber
Yakima, WA
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Studly, now that Trump is elected all the balanced budget shyte will go out the window. Business as usual, or perhaps not as usual considering the foxes are now in the hen house. Get ready for the raiding parties on social security and medicare. Drain the swamp? Ha ha ha. Prediction: the rich will get richer.
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Reilly
Mountain climber
The Other Monrovia- CA
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Yer delusional if you think the Repubs will go after SS and Medicare.
That's not remotely germane to this topic either so just leave it.
I want to hear how the markets are all rigged and shite.
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Ksolem
Trad climber
Monrovia, California
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Get ready for the raiding parties on social security and medicare.
I think it's already been done. Those programs are largely holding debt in the form of 10 year US treasury bonds. The real $ have gone into he general fund. A clever way of having the money in two places at once, until you need it. Specifically SS is holding $2.8T of US Debt, which approaches half of all foreign holders combined.
This at the same time that The Congressional Budget Office projects the interest rates will climb from slightly over 2 percent today to over 4 percent by 2019. As a result, interest payments will more than triple from $250B today to more than $800 billion in 2026.
And that projection does not account for growth of the debt. So when a large part of revenues are going to interest, where will the trillions for SS come from?
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Jorroh
climber
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"Yer delusional if you think the Repubs will go after SS and Medicare.
That's not remotely germane to this topic either so just leave it".
It was just about the first thing out of Ryans' mouth after Trump won.
Also, depending on how Republicans pursue this (remember the Bush privitization plan) it could be very "germane".
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Winemaker
Sport climber
Yakima, WA
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That's not remotely germane to this topic either so just leave it.
Actually Reilly, it IS germane to the issue. The Republican wet dream is to privatize SS and get the money into the stock market. They are salivating at the thought of all those 'management' fees they're going to reap from all the poor suckers. I can assure you that Wall Street brokers will not be concerned about fiduciary duty to their suckers, er.....clients. The great thing about this, for them, is they make money no matter if the sucker wins or loses; a win-win situation for Wall Street.
And don't tell me what I can and can't discuss
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Flip Flop
climber
Earth Planet, Universe
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Topic Author's Reply - Dec 7, 2016 - 04:52pm PT
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19,big!!!! Double down. What could possibly go wrong?
I like this Chill guy. That's my kind of funny.
Indeed. As I scrounge for scraps to eat in the dystopian wasteland that will be my retirement years, I will repeat to myself "Why didn't I listen to Flip Flop? That guy on the internet who warned me."
Hey Chill, because I like you, this warning is not from the internet. It's from the road.
The Road
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Gunkie
Trad climber
Valles Marineris
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I'm actually getting in position to SELL in 2017. One of Trump's big promises was to reduce long term capital gains taxes from 15% to 8%. I'd sell and buy back in, 30 days later, to save future capital gains taxes.
BUT, I'm also in position to buy PUTS and sell CALLS against long positions in the event that Trump somehow gets the massive $1t infrastructure bill passed, cuts tax rate for corporations AND cuts taxes for the wealthy and issues 50 and 10 year t-bills. Liquidity dries up, we see inflation skyrocket and the consumer credit markets dry up. In that case the markets tank in a big way. Multi-year recession sets in and I'm making bank. Count on it.
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10b4me
Mountain climber
Retired
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Yer delusional if you think the Repubs will go after SS and Medicare.
That's not remotely germane to this topic either so just leave it.
I want to hear how the markets are all rigged and shite.
We shall see.
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