Stocks and Trading Thread - Channeling your inner Mono

[crazy canuck]

Timing things for the absolute top and bottom is a virtual impossibility.
Selling near where you think is a top and then buying when you think it's near a bottom... Often less difficult.

And its all gambling. That's why you won't find me putting big money into this stuff :p

The way you are doing it, yes it is gambling.  But it seems you have not understood Habs' posts.

[DGuller]

Selling near where you think is a top and then buying when you think it's near a bottom... Often less difficult.

It's not just less difficult, it's trivially easy.  The difficult part is correlating what you think with the actual movement of the price.

[Josquius]

If you know that the price of the stock is going to come back to $25 infinite number of times, why not sell it when it's at $30?  I suspect that the flaw with your approach is that stocks are not in fact guaranteed to fluctuate perpetually.

Woops, missed the second part. Think I was in a rush.
In this case you would sell at $30... but then you'd see it fall back to $25. And if whatever you based your decisions on the first time around still holds up you buy it again- maybe to sell again at $30, hopefully for it to break that wall this time and go higher.

It's not just less difficult, it's trivially easy.  The difficult part is correlating what you think with the actual movement of the price.

Come on. You know what I meant. Whether you're just rolling a dice or doing a detailed analysis based on an in-depth understanding of the market and/or the company, or anything in between, its what you think is going to happen with a stock.

I'm far from an expert in this stuff. But even I have found I've been able to correctly guess a few movements based on publicly available data. It's sometimes pretty easy to see clustering of sellers at big landmark amounts or analyst projection targets.
If you've got a stock running up towards targets at $30 and you see there's a huge chunk of its volume listed for sale at $20 then it can be a smart move to get out before it hits that... and then if it all checks out and you're still confident in it get back in again at $15 for another shot at $30.

Is there some other reason buy low, sell high, shouldn't apply to the same stock more than once?

The way you are doing it, yes it is gambling.  But it seems you have not understood Habs' posts.

Well its going back to the point of a few pages ago, but it's all gambling. Even the more significant sums I'm putting into ETFs. The odds are very good that they will come out in my favour if I decide to sell some years down the line but they're still a gamble.

[Richard Hakluyt]

Hmmm.....it may be a gamble but if so it is in a casino where the game is rigged in favour of the punter.

[Admiral Yi]

Hmmm.....it may be a gamble but if so it is in a casino where the game is rigged in favour of the punter.

Yup.  The House can have a bad night or two but will always win in the end.

[Threviel]

Tyr reminds me of a story I read from a big Swedish forum. Some dude found out that you can still play on football games in the final minutes. If Barcelona leads by 2-0 in the 89th minute you could still put down money on a Barcelona win. Sure, the winnings were small, but it was trivially easy to see that Barcelona was going to win.

So this dude bet his entire months wage, and won something like 20€. And he continued to do that for months on sure games, because it was trivially easy to spot where sure money was going to come.

Easy peasy money, until one night when Barcelona did not win that game. Sometimes unpredictable shit happens, and by playing the market you are going to get burned when that happens. If it was that easy to predict the market there would be a gazillion funds doing just that, and gambling companies would not allow bets in the 90th minute.

[DGuller]

Collecting nickels in front of a steamroller seems easy until you're under the steamroller.  Rarely do these nickels amount to enough to pay for the medical bills afterwards, particularly because the fees can really eat you up on such bets.

[Admiral Yi]

Collecting nickels in front of a steamroller seems easy until you're under the steamroller.  Rarely do these nickels amount to enough to pay for the medical bills afterwards, particularly because the fees can really eat you up on such bets.

If, as I assume, you're referring to Squeeze's market timing, what constitutes the steamroller?

Long Term Capital did in fact go bust doing exactly what you described.  In fact I think one of the founders coined the term nickels in front of steamrollers.  But their demise was due to selling long dated way out of the money put options on the S&P500.  So when one of the periodic market crashes happened they owed their counterparties a ton of money.  There is nothing in market timing that is equivalent to this.  Squeeze could miss out on some theoretical upside if he sells before the peak or if he buys back before the trough.  Neither of these is the same as actually losing cash money.

[Josquius]

The thing is though people have made decent money off exploiting the market. Rather than collecting nickles placed in front of a steam roller as the companies want they've figured out where the nickles are kept.
It's in large part due to this that various brokers are starting to introduce extra fees and restrictions.

Tyr reminds me of a story I read from a big Swedish forum. Some dude found out that you can still play on football games in the final minutes. If Barcelona leads by 2-0 in the 89th minute you could still put down money on a Barcelona win. Sure, the winnings were small, but it was trivially easy to see that Barcelona was going to win.

So this dude bet his entire months wage, and won something like 20€. And he continued to do that for months on sure games, because it was trivially easy to spot where sure money was going to come.

Easy peasy money, until one night when Barcelona did not win that game. Sometimes unpredictable shit happens, and by playing the market you are going to get burned when that happens. If it was that easy to predict the market there would be a gazillion funds doing just that, and gambling companies would not allow bets in the 90th minute.

The problem here is the guy was making 20 euros off a 2000 euro gamble.
Not making 5 dollars off 15 dollars. Quite a different thing.
There are plenty of examples out there of people getting involved in this stuff at the worst time and doing it stupidly. I've read of a fair few who bought into gamestop at the top or lost all their savings on bitcoin.
Never gamble what you can't afford to lose.

[Threviel]

I was going for the no sure thing angle rather than the lose everything angle.

Sorry, nothing personal, but if the market is so easy that Tyr, or I for that matter, could predict it then no-one would think Berkshire Hathaway was anything special, since millions of stock brokers would outperform it.

[DGuller]

Collecting nickels in front of a steamroller seems easy until you're under the steamroller.  Rarely do these nickels amount to enough to pay for the medical bills afterwards, particularly because the fees can really eat you up on such bets.

If, as I assume, you're referring to Squeeze's market timing, what constitutes the steamroller?

Long Term Capital did in fact go bust doing exactly what you described.  In fact I think one of the founders coined the term nickels in front of steamrollers.  But their demise was due to selling long dated way out of the money put options on the S&P500.  So when one of the periodic market crashes happened they owed their counterparties a ton of money.  There is nothing in market timing that is equivalent to this.  Squeeze could miss out on some theoretical upside if he sells before the peak or if he buys back before the trough.  Neither of these is the same as actually losing cash money.

I'm referring to the dude on the Swedish forum.

[Admiral Yi]

I'm referring to the dude on the Swedish forum.

gotcha

Though Threviel, you never did say whether he came out ahead or behind.

[Admiral Yi]

A question for all the "investing is gambling" types: is the house gambling in a casino?

[Tamas]

A question for all the "investing is gambling" types: is the house gambling in a casino?

What are we comparing to being the house in a casino? Buy and hold or selling covered call options or daytrading or what?

[Josquius]

A question for all the "investing is gambling" types: is the house gambling in a casino?

It's more like a bookies than a casino.
With aspects of competitive casino games.
The ones looking to directly profit from your losses are not the ones you are directly betting on, rather the intermediary and other players elsewhere (of whom their links to the platforms is a controversial topic at the moment)