For those of you who watch the stock market... question

[dusto nomo]

The market does exactly what it is supposed to...provide a deep, regulated, and liquid secondary market for trading securities. Without which, the cost of capital for business would be significantly higher, and more difficult to obtain.

Market makers provide liqudity and provide a very valuable service.

And investing isn't gambling. You are buying ownership in (sometimes) profitable businesses, many of which will pay you a share of earnings via dividend or buyback on a continual basis. Only broke people think buying stocks is equivalent to gambling.

He is a cook turned ambulance chaser, so yes he is broke.

 

[twenty02]

There is no such thing as investing anymore. Buy and hold for 50 years like grandpa did doesn't work anymore. Regular flash crashes. Everything is quant based now. Your average Joe at home is at a total disadvantage. It's a rigged game, but there are sadly no better alternatives.

What the holy hell are you talking about?

We're not talking about trying to out day-trade someone.

There is nothing rigged about taking a quarterly financial statement, spending 30 mins doing an analysis, look at growth estimates.....and determing a fair price you are willing to pay for something....and then wait to get that price.

An individual has 1000x more info and ability to do their own research today compared to grandpa. Grandpa probably turned his money over to some broker and let the broker buy and sell for him. I'd take today over that all day.....that stock broker job doesn't even exist any longer, replaced by dirt cheap online brokers that provide an unbelievable amount of free research and analyst reporting. Not to mention the plethora of extremely low fee ETFs which are the best invention for the small investor since John Bogle came onto the scene.

 

[twenty02]

If I had the money, I'd play the ponies, too. I never said you shouldn't gamble. Just trying to disabuse people of the false notion that they are actually investing in anything other than their broker's annual bonus. If you want to genuinely invest in a business, go find an entrepreneur you believe in who needs capital for a startup.

Startup money into a small business is about the worst risk management investing anyone could do. Even really smart people with great ideas flop more often than not. You really would be better off taking it all to the track or the blackjack tables.

Angel investors and VCs can do it because they have huge sums to invest, and they only need 1 out of 100 to actually survive and thrive. That's totally irrelevant and impossible for all but extremely wealthy individuals.

As to my brokers bonus....that's funny....I think I pay like $6 to make a trade online. And there are a few hundred ETFs that you can buy for $0 commission.

 

[toastedbread]

Startup money into a small business is about the worst risk management investing anyone could do. Even really smart people with great ideas flop more often than not. You really would be better off taking it all to the track or the blackjack tables.

Angel investors and VCs can do it because they have huge sums to invest, and they only need 1 out of 100 to actually survive and thrive. That's totally irrelevant and impossible for all but extremely wealthy individuals.

As to my brokers bonus....that's funny....I think I pay like $6 to make a trade online.

You have the wrong broker! I pay $1 per trade

 

[TheOriginalHappyGoat]

The market does exactly what it is supposed to...provide a deep, regulated, and liquid secondary market for trading securities. Without which, the cost of capital for business would be significantly higher, and more difficult to obtain.

Bullshit. None of the connection between markets and raising capital is inherently necessary. Without markets, capital would still find business, and business would still find capital.

Market makers provide liqudity and provide a very valuable service.

And investing isn't gambling. You are buying ownership in (sometimes) profitable businesses, many of which will pay you a share of earnings via dividend or buyback on a continual basis. Only broke people think buying stocks is equivalent to gambling.

For the vast, vast, vast majority of people, it is gambling. Most people don't even know what they are invested in. They are giving money to someone to manage for them, and trust that person knows enough about what he is doing to give them more back in return.

 

[twenty02]

Bullshit. None of the connection between markets and raising capital is inherently necessary. Without markets, capital would still find business, and business would still find capital.


For the vast, vast, vast majority of people, it is gambling. Most people don't even know what they are invested in. They are giving money to someone to manage for them, and trust that person knows enough about what he is doing to give them more back in return.

You are just flat wrong. Capital would get to business, yes, but at a much higher cost. That is basic finance. Like a 300 level intro to corp finance class.

And most people don't turn their money over to someone blindly....if they do, then they are dumbasses.

 

[TheOriginalHappyGoat]

Startup money into a small business is about the worst risk management investing anyone could do. Even really smart people with great ideas flop more often than not. You really would be better off taking it all to the track or the blackjack tables.

Angel investors and VCs can do it because they have huge sums to invest, and they only need 1 out of 100 to actually survive and thrive. That's totally irrelevant and impossible for all but extremely wealthy individuals.

As to my brokers bonus....that's funny....I think I pay like $6 to make a trade online. And there are a few hundred ETFs that you can buy for $0 commission.

Like I have said multiple times. Most people should invest in stocks and mutual funds as part of their normal investment and retirement strategy. Only a very few people are wealthy enough to bypass the markets and invest directly. All I'm pointing out is that the whole idea that you are investing in a business when you buy a stock is all fantasy. All you're doing is giving someone else money for an investment that he made previously. That sale of stock from him to you adds zero capital to any business. All it is is a transfer of risk from one person to another (which is, essentially, the definition of gambling, if you think about it).

Again, that doesn't mean you shouldn't do it. But let's be honest about what it is.

 

[TheOriginalHappyGoat]

You are just flat wrong. Capital would get to business, yes, but at a much higher cost.

And most people don't turn their money over to someone blindly....if they do, then they are dumbasses.

Most people don't understand market forces. They count on a professional to do that for them. That doesn't make them dumbasses. It just means their expertise is in one of the billions of other things people might make a career out of that don't involve understanding markets.

 

[twenty02]

Like I have said multiple times. Most people should invest in stocks and mutual funds as part of their normal investment and retirement strategy. Only a very few people are wealthy enough to bypass the markets and invest directly. All I'm pointing out is that the whole idea that you are investing in a business when you buy a stock is all fantasy. All you're doing is giving someone else money for an investment that he made previously. That sale of stock from him to you adds zero capital to any business. All it is is a transfer of risk from one person to another (which is, essentially, the definition of gambling, if you think about it).

Again, that doesn't mean you shouldn't do it. But let's be honest about what it is.

If I buy a small business, that someone owned before me, who they bought from someone else, is that not the same thing?

When you buy a business, whether it's Coca -cola, or the Asian massage parlor down the street...all you are buying is ownership of the businesses future cash flow.

 

[toastedbread]

Most people don't understand market forces. They count on a professional to do that for them. That doesn't make them dumbasses. It just means their expertise is in one of the billions of other things people might make a career out of that don't involve understanding markets.

Most financial advisers are clueless when it comes to 21st century market forces. The whole notion of diversification is almost nil because the market is so heavily correlated across sectors and globally dependent.

 

[toastedbread]

Like I have said multiple times. Most people should invest in stocks and mutual funds as part of their normal investment and retirement strategy. Only a very few people are wealthy enough to bypass the markets and invest directly. All I'm pointing out is that the whole idea that you are investing in a business when you buy a stock is all fantasy. All you're doing is giving someone else money for an investment that he made previously. That sale of stock from him to you adds zero capital to any business. All it is is a transfer of risk from one person to another (which is, essentially, the definition of gambling, if you think about it).

Again, that doesn't mean you shouldn't do it. But let's be honest about what it is.

There will be no "retirement" anymore. People are living longer and will work longer. Better to enjoy life throughout. People will need to relearn and reinvent themselves. If you aren't tech savvy you are in danger of being replaced by a machine in the next 20-30 years.

 

[twenty02]

You have the wrong broker! I pay $1 per trade

I've used the dirt cheap ones, prefer the research tools at the one I use now. At those prices who cares...I don't really do trading.

 

[TheOriginalHappyGoat]

If I buy a small business, that someone owned before me, who they bought from someone else, is that not the same thing?

When you buy a business, whether it's Coca -cola, or the Asian massage parlor down the street...all you are buying is ownership of the businesses future cash flow.

Well, presumably, when you buy a small business down the street, you are bringing your own enterprise into the equation. You can buy all the Coca-cola stock you want, it won't make you part of the business.

But that's really not the point I'm making. The point is, there is a difference between investing capital in a business and investing in stock. For the investor, the difference may be irrelevant. But for the business, the difference is huge. Only the original purchase of stock from the company brings any capital to the business. Every subsequent sale of that stock means almost nothing (outside of the fact that markets generally force public companies to worry about their own stock performance, which is also stupid).

 

[twenty02]

Most people don't understand market forces. They count on a professional to do that for them. That doesn't make them dumbasses. It just means their expertise is in one of the billions of other things people might make a career out of that don't involve understanding markets.

I will agree that financial literacy in this country is dismal. Which will be a serious problem since individuals are in charge of their retirement now. I continually talk with coworkers that are either 1) much too risk averse....younger people sticking all their money in govt bonds or 2) people jumping into and out of the market, trying to time the next move.

Both have been proven to be very long run foolish

 

[sdhoosier]

all indexes down over 2% right now.. lets hope tomorrow is a better day

 

[Moops]

I'm invested in Jesus.

Most people don't understand -spiritual- forces. They count on a professional to do that for them. That doesn't make them dumbasses. It just means their expertise is in one of the billions of other things people might make a career out of that don't involve understanding -spirituality-.

Also known as preachers.

When you buy a business, whether it's Coca -cola, or the Asian massage parlor down the street...all you are buying is ownership of the businesses future cash flow.

Heaven ... sweet heaven ...




__________________________________

 

[MyTeamIsOnTheFloor]

I'm invested in Jesus.



Also known as preachers.



Heaven ... sweet heaven ...




__________________________________

The Lord loves a cheerful investor.

 

[TheOriginalHappyGoat]

I'm invested in Jesus.



Also known as preachers.



Heaven ... sweet heaven ...




__________________________________

I used to be heavily invested in Jesus. Luckily, I got out while the market was still up. Sorry about your luck.

 

[dusto nomo]

Well, presumably, when you buy a small business down the street, you are bringing your own enterprise into the equation. You can buy all the Coca-cola stock you want, it won't make you part of the business.

But that's really not the point I'm making. The point is, there is a difference between investing capital in a business and investing in stock. For the investor, the difference may be irrelevant. But for the business, the difference is huge. Only the original purchase of stock from the company brings any capital to the business. Every subsequent sale of that stock means almost nothing (outside of the fact that markets generally force public companies to worry about their own stock performance, which is also stupid).

If I'm the biggest buyer of CocaCola it damn sure makes you part of the business via voting on the Board. Same with a single share purchaser.

 

[Moops]

I used to be heavily invested in Jesus. Luckily, I got out while the market was still up. Sorry about your luck.

So, he used to be God and Savior but isn't now?

Your response is illogical.

 

[TheOriginalHappyGoat]

So, he used to be God and Savior but isn't now?

Your response is illogical.

However you need to interpret my post to feel superior, that's what I meant. Yer the best.

 

[Chester Fried]

Are we in for a rocky day tomorrow?

Saw where they had to put an emergency stop after the Chinese stock market dropped 7% shortly after opening.

I don't know much about the stock market but I know that people often overreact and I'm expecting a big drop early tomorrow with everyone pulling out of the market.

All of this is just noise.

At your age just keep saving money and invest it into low cost index funds or etfs through Vanguard or somewhere else and you will be fine. If the market isn't significantly up in 30 years or so when you retire we have bigger problems than what our retirement accounts are. This is a really boring way to invest, but it's the most reliable and doesn't require a ton of work, just dedication to saving.

 

[Ungar16]

Yes there will be a sell off when market opens, no doubt. The China slow down has been playing out for a couple years. This is just another hiccup in that process.

Great time to pickup shares of companies you like, after this weeks selloff. Every investor should have a running list of stocks they like just so you can be ready to pull the trigger when unrelated market wide events like this happen. I have 2 or 3 that I'll start adding to soon as prices have gotten attractive, and are companies with no exposure to China.

I wouldn't pick up crap after this initial sell off.... Amazon and Google are way over valued which has kept the market propped up. Amazon is a way over valued and it will take a drubbing over the next few weeks.

Commodities have been trashed for a year now which tells me that crap isn't being made and it isn't moving.

I wouldn't be surprised to see a worse recession than the 08 recession. A lot of stuff out their that shows a big drop in the market and all signs point to another recession this year. Barrack won't be happy and the Dems won't be happy. Even though they control very little of what happens in the market place.

 

[Ungar16]

There is no such thing as investing anymore. Buy and hold for 50 years like grandpa did doesn't work anymore. Regular flash crashes. Everything is quant based now. Your average Joe at home is at a total disadvantage. It's a rigged game, but there are sadly no better alternatives.

I would agree to some degree. Playing individual stocks is not smart in todays world. When a corp. builds a fiber optic line from Chicago to New York to get a 1/10 of a second advantage on buying or selling stock their is an issue. These guys can see trades come in before they process and move the market any one direction it is insane.

 

[twenty02]

I wouldn't pick up crap after this initial sell off.... Amazon and Google are way over valued which has kept the market propped up. Amazon is a way over valued and it will take a drubbing over the next few weeks.

Commodities have been trashed for a year now which tells me that crap isn't being made and it isn't moving.

I wouldn't be surprised to see a worse recession than the 08 recession. A lot of stuff out their that shows a big drop in the market and all signs point to another recession this year. Barrack won't be happy and the Dems won't be happy. Even though they control very little of what happens in the market place.

That sounds pretty dramatic....I do not see any signs of a recession, and certainly nothing like 2008. Car business just had their best sales year in history, for example, finally eclipsing the prior record set in 2000.

Oil drop had a big negative on the overall market last year, but that's a one off type thing.

 

[Moops]

That sounds pretty dramatic....I do not see any signs of a recession, and certainly nothing like 2008. Car business just had their best sales year in history, for example, finally eclipsing the prior record set in 2000.

So you mean 2000, right before the crash of '02 ...

nah, no worries.

 

[IUXC68]

If I had the money, I'd play the ponies, too. I never said you shouldn't gamble. Just trying to disabuse people of the false notion that they are actually investing in anything other than their broker's annual bonus. If you want to genuinely invest in a business, go find an entrepreneur you believe in who needs capital for a startup.

Why would you use a full service broker, and presumably pay some sort of bonus? Since the early 1980s I have used Schwab and one or two other discount firms and haven't had to pay anything other than discount commissions.

 

[TheOriginalHappyGoat]

Why would you use a full service broker, and presumably pay some sort of bonus? Since the early 1980s I have used Schwab and one or two other discount firms and haven't had to pay anything other than discount commissions.

I could be way behind the times. My primary investment strategy right now involves looking under the bed once a week for coins that fell off my dresser.

 

[IUXC68]

I could be way behind the times. My primary investment strategy right now involves looking under the bed once a week for coins that fell off my dresser.

Well, knowing that you are trying to get a respectable private practice under way, I can't blame you. You might want to add checking under the chairs that your prospective clients occupy, just for another potential source. In any event, I wish you well.

 

[TheOriginalHappyGoat]

Well, knowing that you are trying to get a respectable private practice under way, I can't blame you. You might want to add checking under the chairs that your prospective clients occupy, just for another potential source. In any event, I wish you well.

Thanks. That's some solid advice.

 

[MyTeamIsOnTheFloor]

Thanks. That's some solid advice.

Join a huge firm, work like a slave and get a 4% match.

 

[TheOriginalHappyGoat]

Join a huge firm, work like a slave and get a 4% match.

I tried. I failed. I still send out resumes, even while I'm building my practice. I'm not an idiot.