Stock Market thoughts (continued - no politics please!)

FastEddieB said:
if you see it as purchasing or selling a tiny portion of a company based on your faith in that company, your buying a share while someone else is selling a share does not imply anyone is “wrong”, only that they differ in their views of a company’s prospects and how it fits in with their investment strategy. And I still think that an efficient market nullifies any concept of overpriced or underpriced - at any given moment the price of a stock is exactly where it should be, all things considered.
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A perfectly efficient market means everyone has the information to know the true value. But any time you’re relying on efficiency, it isn’t reality. Our markets are not that efficient.

What I meant by that is people disagree about the value of a stock. If they didn’t, there could be no commerce because they would agree on the value and either the buyer or seller would not participate. It requires the seller and the buyer to believe they are benefitting from the transaction. For the seller, they think the stock will be worth less in the future, the buyer hopes it will be worth more. They cannot both be right.

Yes, different investors have different goals, but I don’t believe anybody wants to buy an investment and then have it lose value, just like nobody wants to sell an investment if they believe it will go up. There are rare circumstances where both sides can be right or where both sides can be wrong, but they depend on different measures of value.
 
bflynn said:
What I meant by that is people disagree about the value of a stock. If they didn’t, there could be no commerce because they would agree on the value and either the buyer or seller would not participate. It requires the seller and the buyer to believe they are benefitting from the transaction. For the seller, they think the stock will be worth less in the future, the buyer hopes it will be worth more. They cannot both be right.
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It's not that simple.

Sometimes people buy stocks for long-term investments. Sometimes people cash out in order to use the money (even when they believe the stock will continue to hold value).
 
The folks that bought Hertz after the bankruptcy weren't efficient in my mind. Up 5X in a day wasn't it? I believe the market is mixed. Some parts of it may be efficient, much of it is emotional and computer algorithms driven. All those new traders on RobinHood aren't "fully knowledgeable."

And then there's the question of how diversified you are if you are fully invested in the US dollar. Down almost 10% since March 20th.
https://www.marketwatch.com/investing/index/dxy
 
denverpilot said:
Very few value investors in the markets anymore with computerized trading. They truly are just trying to predict which way you’ll go to counter it and beat you with sheer size or volume.
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Yes, a large percentage of the trading is computerized.

But bring up a chart of AAPL, AMZN or TSLA and zoom out. I think all the quick in-and-out computer trades can be seen as the tiny bit of jaggedness in the charts, if even that. They’re in and out fast, looking to make pennies. I don’t think they have a major effect on overall trends, nor potential profits for the “little guy”.

As far as optical cable length making a difference and giving one computer an advantage, there was a good RadioLab episode covering this and the “Flash Crash”. I’ll see if I can find it and post a link.

Here you go:

https://www.wnycstudios.org/podcasts/radiolab/episodes/267124-speed

Middle segment : Million Dollar Microsecond. Click on it to listen.
 
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FastEddieB said:
Dividend-paying stocks’s yields go up as the share price goes down.

Ford, for instance, is yielding 8% annually at its current price. So, not a bad place to park money if you need income. With the recent selloff, lots of stocks have tempting yields. Plus, if you reinvest the dividends regularly you get the benefit of dollar-cost-averaging.

That said, I may look at throwing a few dollars at a high yield stock Monday…
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At the time I wrote this, March 2020, Ford stock was trading at less than $5. Despite all the doom and gloom, it’s now trading at recent highs approaching $18. Turns out it was a good call, and I did increase my position in it.

On the down side, Ford suspended its dividend about the time of my post, so no benefit of dividends all this time. Good news is that it’s getting reinstated this quarter, which is helping to boost its price.

How’s everybody else doing?

edited to add: All major indices hit new record closes today!
 
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I'm not good at chasing stocks. I was the dumb ape who sold GME at $11 last November.
 
I was a day late to Doge. Every day. For weeks on end. I console myself by knowing I did not lose a penny. After I get the new plane squared away, maybe I'll dabble on the next hot coin.
 
FastEddieB said:
How’s everybody else doing?
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FWIW: I'm retired and never played individual stocks, mutual funds only. My post retirement plan consisted of funds with a historical return of 6-8% with an "aggressive" risk. The last 2 year run have seen 18%+ returns. Go figure.
 
What's been happening with the stock market is nice but I must admit is making me a little nervous because I don't understand it. I keep waiting for a big correction. On the other hand, I'm not too worried because I've lived through a few big corrections and come out doing well because I just ignore them and hold on.
 
judypilot said:
What's been happening with the stock market is nice but I must admit is making me a little nervous because I don't understand it. I keep waiting for a big correction. On the other hand, I'm not too worried because I've lived through a few big corrections and come out doing well because I just ignore them and hold on.
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Yep. We're 9 months out from retiring and while I enjoy the gains I figure we can sustain a long-term 30% hit in the market and that's just unlikely. We've dollar cost averaged the last 30 years into a range of mutual l funds and while its not sexy it works. I've never bought a stand alone stock. I'm just not smart enough to really do so although I have friends who love doing that research. Other things I'd rather do.

There's so much cash sitting out there right now waiting for the right place to be invested I'm not sure this market will end soon as cash is losing value due to inflation.
 
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Gambling as a scheme to make me whole? Meh, not my cup of tea. I prefer uncle sammy subrogate my losses in purchasing power. E pluribus Unum and all that aspirational garbage. It is their monetary policy that materially injures me in the first place; it is only fair they be the one to make amends. In fairness, I'd never have agreed to his Majesty's indentured servitude absent that social contract. TETO! :D
 
bflynn said:
I'm not good at chasing stocks. I was the dumb ape who sold GME at $11 last November.
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no worries.....I sold MRNA at $20 now over $200 was up to $350....and sold ROKU at $90. lol but made some in other areas.
 
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