NICE market open today. I currently have SEVEN stocks at +1% or higher today. I like these days.......after big drops. They give me potential to gain BIG on the SP500.
turn it up! She was a level-headed dancer on the road to alcohol And I was just a soldier on my way to montreal Well she pressed her chest against me About the time the juke box broke Yeah, she gave me a peck on the back of the neck And these are the words she spoke [Chorus] Blow up your t.v. throw away your paper Go to the country, build you a home Plant a little garden, eat a lot of peaches Try an find jesus on your own Well, I sat there at the table and I acted real naive For I knew that topless lady had something up her sleeve Well, she danced around the bar room and she did the hoochy-coo Yeah she sang her song all night long, tellin' me what to do [Chorus] Well, I was young and hungry and about to leave that place When just as I was leavin', well she looked me in the face I said "you must know the answer." "she said, "no but I'll give it a try." And to this very day we've been livin' our way And here is the reason why We blew up our t.v. threw away our paper Went to the country, built us a home Had a lot of children, fed 'em on peaches They all found jesus on their own
WELL.....another RED day to start the new month. Another medium red day......so whatever. BUT....the SP500 kicked my ass today by 1.12%.
WELL.....I lied. I do.......do....Facebook for music.....but strictly limited to music and absolutely nothing personal.
Literally chuckled when I opened my account this afternoon. The bleed has been rough the past few days. Waiting for a little less volatility to add.
I was in the car earlier and heard they had found......ONE......Omi-Covid case in California. So there goes all the gains.......POOOOOOFFFFFF. Imagine how bad it would have been if they had found FIVE cases. OMG......OMG. I have some money to invest for a relative tomorrow so I am hoping to get some good deals. Stock market news live updates: Stocks turn lower with Omicron, inflation in focus https://finance.yahoo.com/news/stock-market-news-live-updates-december-1-2021-232350209.html (BOLD is my opinion OR what I consider important content) "Stocks turned lower Wednesday afternoon as more hawkish remarks from Federal Reserve Chair Jerome Powell compounded with concerns around the Omicron variant and its impacts on the economy. The S&P 500, Dow and Nasdaq each erased earlier gains to dip into the red. The Centers for Disease Prevention and Control said Wednesday it identified the first confirmed case of the Omicron variant in the U.S. Stocks cut gains after CNN first reported the news around 1:45 p.m. ET, citing an unnamed person familiar with the matter. The U.S. joined more than two dozen other countries in reporting at least one case of the Omicron variant, which was first identified last week by scientists in South Africa. The latest development renewed concerns about the potential impact of the new variant for the domestic economy. A day earlier Moderna (MRNA) CEO Stephane Bancel told the Financial Times that the company's current COVID-19 vaccine would likely see a "material drop" in effectiveness against Omicron, but that more data was still needed on the variant. This commentary, as well as ongoing uncertainty over the transmissibility and severity of disease caused by the new variant, also contributed to the broader market slide seen on Tuesday. “The market doesn’t like an information vacuum, and now we have two,” Thomas Hayes, Great Hill Capital Chairman, told Yahoo Finance Live. "Not only did we have the CEO of Moderna expressing concern that his vaccines may not have full coverage for Omicron, but then you had Powell throw this ... wrench into the mix at the hearing saying that maybe we'll speed up taper by a few months. That's no small potatoes for sure, because the market had anticipated over six or seven months that we would get another $660 billion of liquidity." Namely, Powell told the Senate Banking Committee that it would be appropriate for the central bank to consider completing its asset-purchase tapering process "a few months sooner" than previously telegraphed. Market participants had been anticipating that the Fed might strike a more supportive stance for longer especially given concerns over the latest coronavirus variant. But instead, Powell suggested his priority was on curbing persistently elevated levels of inflation, and the Fed chair added it was "probably a good time to retire" his description of inflation as "transitory." "Chairman Powell’s commentary course-corrected the view on inflation and the potential need for quicker policy adjustment," Charlie Ripley, senior investment strategist for Allianz Investment Management, wrote in an email. "The reality is hotter inflation coupled with a strong economic backdrop could end the Fed’s bond buying program as early as the first quarter of next year." "Ultimately, the transitory view on inflation has officially come to an end as Powell’s comments reinforced the notion that elevated prices are likely to persist well into next year," he added. "With potential changes in policy on the horizon, market participants should expect additional market volatility in this uncharted territory." 2:50 p.m. ET: 'The market lacks conviction on the upside': Strategist Investors are in for more whipsaw stock market action in the very near-term as more information emerges on the new Omicron variant, according to at least one strategist. "The price action you're seeing now really shows the market lacks conviction on the upside," Niladri Mukherjee, Bank of America head of portfolio strategy, told Yahoo Finance Live on Wednesday. "In the last couple of weeks, we've had two major uncertainties being injected into the market place. One obviously was the news of the new variant, which we know very little about right now. And the second is the possibility of a more hawkish Fed," he added. "And you've seen on different days, on some positive days, you've seen a recovery in some of the value and cyclicals which do well when the economy does well. And other days, you've seen the secular growth-oriented sectors, like technology doing better than the S&P 500." "We think uncertainty will be with us at least in the near-term until we learn more about the virus — its severity, its transmissibility, how much it is evading the vaccines, etc.," Mukherjee said. "But as we go into 2022, the bigger environment will be that which is really dictated by the Fed's path to monetary policy normalization." 12:55 p.m. ET: Bank stocks jump amid rise in Treasury yields Bank stocks jumped Wednesday afternoon as Treasury yields climbed, with traders pricing in expectations for an interest rate hike by the Federal Reserve next year after its asset-purchase tapering process ends. The two-year yield, which is sensitive to expectations for monetary policy changes, jumped by about 5.5 basis points Wednesday afternoon to hover around 0.58%. The yield on the benchmark 10-year Treasury note rose by 1 basis point to 1.45%. The jump in Treasury yields helped lift shares of major banks including JPMorgan Chase and Goldman Sachs, both of which are also Dow components. The KBW Regional Banking Index, an exchange-traded funding tracking bank stocks, rose by more than 3.4% for its best climb in a month. 10:05 a.m. ET: ISM Manufacturing index ticks up to 61.1 in November, coming in-line with estimates Manufacturing sector activity picked up in November compared to October, though inflationary concerns and other price pressures continued to weigh on goods-producing industries. The Institute for Supply Management's (ISM) November manufacturing index came in at 61.1 for the month, up from 60.8 in October. Readings above the neutral level of 50.0 indicate expansion in a sector. Beneath the headline index, a subindex tracking prices paid eased to 82.4 from 85.7 in October, but still came in elevated compared to pre-pandemic levels amid lingering inflation. A subindex tracking employment improved to 53.3, rising from October's 52.0. “The U.S. manufacturing sector remains in a demand-driven, supply chain-constrained environment, with some indications of slight labor and supplier delivery improvement," Timothy Fiore, Chair of the Institute for Supply Management Manufacturing survey, said in a press statement. "All segments of the manufacturing economy are impacted by record-long raw materials and capital equipment lead times, continued shortages of critical lowest-tier materials, high commodity prices and difficulties in transporting products." "Pandemic-related global issues — worker absenteeism, short-term shutdowns due to parts shortages, difficulties in filling open positions and overseas supply chain problems — continue to limit manufacturing growth potential," Fiore added. " MY COMMENT Just what we needed today......POWELL and YELLEN.....both spouting their "stuff" to congress. Please.....do these people ever shut up? Apparently not. As to the......ONE......new Covid case........yes.......that persons symptoms are very MILD. The government is trying to say it is a result of the vaccine. I prefer to think that it is the FACT that the new Covid variation has.....so far....typically produced very mild symptoms.....if any at all. It is AMAZING that now that we are living in the "information age".......the era of the internet........there is NOTHING that anyone on any side of any issue can rely on anymore.......ALL information is now suspect.
If you prefer some NON-COVID..........POSITIVE investing news......not that it matters.......here you go. CEOs' economic outlook hit the highest level in at least 20 years. But Omicron could change that https://www.cnn.com/2021/12/01/business/ceo-outlook-business-roundtable/index.html (BOLD is my opinion OR what I consider important content) Despite rising labor costs, America's business leaders felt very bullish on the US economy — at least in the days prior to the emergence of the Omicron coronavirus variant. The influential trade group the Business Roundtable said Wednesday its CEO Economic Outlook Survey rose during the fourth quarter to the highest level in its 20-year history, surpassing even the lofty levels seen after the enactment of President Donald Trump's tax cuts in late 2017. "These historically positive results may seem surprising, particularly in light of ongoing uncertainty over the trajectory of the pandemic, supply chain disruptions, inflationary pressures and the threat of substantial tax increases," Business Roundtable CEO Joshua Bolten told reporters during a press conference in Washington. But there is a caveat: the survey of business leaders was conducted between November 3 and November 22, prior to the Omicron headlines, Bolten said. "Continued progress in defeating the pandemic, including new variants, will be necessary to sustain strong growth into the second half of 2022," Walmart (WMT) CEO Doug McMillon, who also serves as the trade group's chairman, said in a statement. CEOs indicated they planned to increase hiring and business investment, and they also expect higher sales. Nearly half, 48%, of the CEOs surveyed identified labor expenses as the greatest cost pressure facing their businesses right now. Omicron could 'put a damper on things' Bolten acknowledged the Omicron variant has the potential to disrupt the economic recovery, but he said it's too early to say for sure. "If it does turn out to be as dramatic a shift as the Delta variant was, that will definitely put a damper on things," Bolten told reporters at the DC press conference. But he cautioned that the trade group's CEO members are adopting the view that it's too early to assess Omicron's potential economic impact. "We don't know, because the experts don't know. Everyone's got fingers crossed that it's not too bad," Bolten said, later adding, "It's TBD, with a lot of people pretty concerned." Despite the Omicron news, the CEOs still plan to convene in Washington on Thursday. "Pretty much everyone who said they were going to show up, is showing up," Bolten said. "We are following a very tight protocol of insisting that everyone who enters the space get vaccinated and recently tested, including staff, vendors and caterers."" MY COMMENT It is going to be 24/7 FEAR MONGERING to the hilt on Covid for the next few days. A BONANZA for the AI Program Traders this week. My personal concern level is......ZERO........at least with.....Covid. Now, how the politicians might overreact to this.......MILD.....variation according to ALL the current information we have.......that is the REAL DANGER. I continue to be fully invested for the long term as usual.
I watch squawk in the morning and I always laugh when I hear him… it’s obvious to everyone watching that he’s such a radical fake company-man endorsing everything his network requires him to… this time he went a step further to appease his employer and got checked. Very entertaining!
OK........another day.......more irrational hysteria in the markets. Well...perhaps.....perhaps not. It will depend on mass numbers of people.......and......the AI program traders micro trading the news feed. I got my business done a minute ago. A relative had some money that they put into their account so.....I put in orders to deal with it. About 25% went into QQQ. Another 25% went into the Fidelity Contra fund. The remaining 50% is allocated to the SP500 Index fund. The QQQ trade is locked in right now since it closed within seconds. The money for the Contra fund and the SP500 Index will happen at the close today. NICE to see them get a little random discount on their money with the recent down markets. AND.......NO......I am not going to try to GUESS the short term market direction and TIME this money. So...the orders went in today......the day that the money hit their account.
Since the markets are caught up in being......SHORT TERM IRRATIONAL......I will just ignore them with this little article: What Was the First Rock Concert You Ever Attended? https://www.realclearmarkets.com/ar...st_rock_concert_you_ever_attended_805974.html (BOLD is my opinion OR what I consider important content) "It’s my favorite question to ask people at a dinner party (or anywhere else) when the conversation is lagging: What was the first rock concert you attended? Nearly everyone has a story to share – often one that involves a comical cocktail of juvenile antics, liquid spirits, long-lost love interests, and a band that is no longer respectable – and maybe never was. (Here’s looking at you, Backstreet Boys fans.) I attended my first concert 40 years ago today. The band was Journey – a prototype power pop quintet – and their new album, “Escape,” was a smash. My friend Rob and I asked our parents about attending – we were only 13 – and faster than you can say “Stone in Love,” we both had general admission tickets, purchased for $12.50 each at Rainbow Records, with an up-and-coming Canadian act (Loverboy) as the opener. The show was held at the Cow Palace – an unheralded venue best known for having hosted the 1964 Republican convention. Most of what I remember are peripheral details. Rob and I brought girls (cool), we traveled to the Cow Palace in a groovy van (very cool), two of Rob’s older brothers were also with us (extremely cool), but so were our parents (less cool). The music was louder than anything I’d ever heard – my ears were still ringing the following morning in science class – and the acoustics were awful. The event was also the smokiest I’d ever experienced, and even as a young teen I knew that not all the fumes were emanating from tobacco-based products. The only musical moment I remember was the lead singer, Steve Perry, outfitted in yellow leopard print shirt, jeans, and high tops, crooning the hit single “Don’t Stop Believin’” in his distinctive falsetto voice. When he arrived at the line about a city boy who was “born and raised in south Detroit,” he subbed in “South San Francisco.” The Bay Area crowd went bonkers. To memorialize the experience, I bought a Journey shirt, which I still own. Concerts today are much more staid affairs, with reserved seats, no smoking, and the volume low enough to ensure one’s eardrums remain intact. But the rock concert experience can still be breathtaking. And everyone’s first concert should be committed to memory – with an embarrassing story to tell about it to enliven those dinner parties that inevitably turn dull." MY COMMENT I will tell about my first REAL concert in the post below.
OK.....my first REAL concert. It was classic......GO BIG OR GO HOME. I was in Tacoma and went up to Woodinville Washington on the East side of Lake Washington from Seattle to go to the three day Seattle International Pop Festival. Up to this point in my life I had heard many local bands in High School.....but I had never been to a REAL concert. Woodinville is now a very UPSCALE area that sits next to Redmond. The two towns comprise the HEART of the Eastside TECH world in Washington State with Redmond being the home of Microsoft and many other tech companies. Later in my life I lived a short distance from the site of the festival when I lived in Redmond. Anyway, I drove up the 50 or so miles from Tacoma for the three days. I got horribly lost the first day but finally got there. An amazing line-up of bands when I think back on it now. MUCH later in life.......I became good friends and musical partners with a member of one of the groups that was in the festival. We played together in a number of bands over about ten years.......including one touring band. NO....neither one of us is or was a STAR......we were/are both side players. My good friend has been deceased now for 11 years.......I still miss him greatly. So....through my friend I got to hear many inside stories about the back-stage antics of the festival. I find it interesting that I......unknowingly...... saw him perform that day and 30+ years later we knew each other and played together for many years. HERE is the AMAZING line up of my FIRST CONCERT: Crome Syrcus Bo Diddley Flying Burrito Brothers Ten Years After Guess Who Murray Roman Albert Collins Santana Youngbloods Tim Buckley It's a Beautiful Day Byrds Floating Bridge Charles Lloyd The Flock Ike & Tina Turner Revue Lonnie Mack Chicago Transit Authority Chuck Berry Blacksnake Spirit Vanilla Fudge Rockin' Fu Led Zeppelin Lee Michaels The Doors https://en.wikipedia.org/wiki/Seattle_Pop_Festival
Oh yeah.....looks like the market is open and doing well. It will probably tank when we learn that there has been a single hospitalization from the OMI Coivid in Mozambique. WHAT ME WORRY. The current market is right out of Mad Magazine.
Since we are still in FANTASY LAND in the markets at the moment.....I will post some irrelevant economic data that no one will care about. Jobless claims: Another 222,000 individuals filed initial unemployment claims last week https://finance.yahoo.com/news/jobl...000-after-reaching-52-year-low-200027307.html (BOLD is my opinion OR what I consider important content) "Weekly jobless claims rose after setting a more than five-decade low last week. Still, however, new claims came in near pre-pandemic levels, highlighting ongoing improvements in the labor market. The Labor Department released its weekly jobless claims report on Thursday. Here were the main metrics from the print, compared to consensus estimates compiled by Bloomberg: Initial unemployment claims, week ended November 27: 222,000 vs. 240,000 expected and a revised 194,000 during prior week Continuing claims, week ended November 20: 1.956 million vs. 2.003 million expected and 2.049 million during prior week At 222,000, jobless claims rose for the first time in eight weeks. Continuing claims, which measure the total number of workers still claiming unemployment benefits across regular state programs, did fall to a fresh March 2020 low, reaching 1.956 million. Last week's downwardly revised 194,000 jobless claims — which brought new claims well below even their pre-pandemic 2019 weekly average of about 220,000 — were seen by many pundits as a one-time event. And this figure was revised down even further from the 199,000 claims first reported last week. "Last week's drop ... likely overstated strength, due to holiday-related seasonal adjustment issues," wrote Rubeela Farooqi, chief economist for High Frequency Economics, in a note. "The overriding message remains the same: Demand for labor remains strong amid a worker shortage." And indeed, worker shortages have weighed on the overall labor market for months now. As of October, the civilian labor force was still down by nearly 3 million participants compared to February 2020 levels, according to Labor Department data. Lingering concerns over the virus and a desire by many working-age individuals to seek out new roles with better flexibility, wages and benefits have kept many individuals on the sidelines. Greg Staples, DWS Group head of fixed income, Americas, said the timeline for the labor market to reach stability and return back to its pre-pandemic conditions is "the real wildcard" for the economic recovery. "Right now, there're a lot of question as to what it's going to take in terms of wages, to bring workers back into the workforce. There's been hesitation whether it's because they've got built up savings or they're worried about child care or they're worried about COVID," said Staples, during a media call on Wednesday. "But ultimately, as employers have to raise wages up above say that magic $15 an hour level, it will entice workers back in, will get a more natural equilibrium between employers and employees. Wages will stabilize and some of those inflationary pressures will recede." The Labor Department's next monthly jobs report for November will provide more details about the state of the labor market recovery, labor force participation and wage growth. Consensus economists expect to see that non-farm payrolls grew by 546,000 in November, compared to October's 531,000 gain. The unemployment rate likely ticked down to 4.5%, while average hourly earnings likely rose by 5.0% over last year to accelerate from October's 4.9% year-on-year rise. The survey period for that report took place during the week including the 12th of the month. In a potentially encouraging sign for the monthly data, that survey period coincided with a precipitous drop in weekly jobless claims to below 200,000. The Labor Department is set to release its November jobs report Friday at 8:30 a.m. ET. " MY COMMENT The SLOW re-opening continues to slog along. We are STILL under the cloud of FREE MONEY. Of course.....we are STILL giving out free money up to at least the end of the year based on how many kids you have. All this economic STUFF looks about normal to me based on what you would expect. It is a long drawn out process to re-open an economy.
OBVIOUSLY.....all the big trading houses and market movers are in very close contact with world wide medical experts on this Covid stuff. They know very well EVERYTHING there is to know about all the data and about this OMI variant. They are NOT IDIOTS....they dont rely on the media for their information. They look to the best experts in the world. They are ALSO......NOT....idiots when it comes to using the media and other sources to drive their trading. They maintain a HUGE stable of world wide EXPERTS on any issue you can imagine. As a regular person......but at least one with a good background in medical research.....I have to search out information on the internet. What I am seeing so far: 1. The situation in Africa is being HIGHLY EXAGGERATED. Most of the South African countries have little to no OMI cases and virtually ZERO hospitalizations. 2. The medical experts in Africa are uniformly reporting that this variation results in EXTREMELY MILD symptoms. 3. The virus modelers are seeing very STRONG compatability and likelihood that Covid antibodies will attach to the spikes of the new OMI variation.....which means the vaccines.....to the extent they work.....will provide protection against this variation. 4. The ACTUAL SCIENCE......does not support in the slightest all the FEAR MONGERING that is intentionally occurring at the moment by those that have some agenda or something to gain. 5. Best case situation.....this variation will spread very quickly with EXTREMELY MILD symptoms and will greatly increase the number of people with natural antibodies which are stronger than the vaccine. So....we will head even faster toward herd immunity. This is the BASIS for my TOTAL lack of concern for where we are right now medically and in the markets. No....I did not make note of sources since this information is for......."ME".......anyone else can research these issues for themselves.......and....form their own opinions.
That's a pretty epic lineup W! There are a some names one there I'm not familiar with but want to check out. I am always hunting for new music. I have gone to more concerts than I can count but the first 'real' concert I went to was Social Distortion at the House of Blues. I was a freshman in college at the time and my brother and a buddy came up and we went downtown for the show. The venue was awesome and the acoustics were great! (Any flaws were Mike Ness who isn't known for precision on the guitar and possible the aid of some sore of illegal substance). I have seen them at least a dozen times over the last 15 years at many different venues. Whenever people ask me what the worst part of covid was I always say no concerts and standup comedy.... The best part... getting to work in 15 minutes in my Corvette with nobody on the road and no police taking radar.
For all the Cramer fans on here.....sorry: FOR GRIDSMASHER https://www.thestreet.com/etffocus/trade-ideas/qqq-qqqm-qqqj-what-to-expect-big-3-nasdaq-etfs "Invesco Nasdaq 100 ETF (QQQM) QQQM also tracks the Nasdaq 100 index. Invesco Nasdaq 100 ETF (QQQM) If you just did a double-take reading that last sentence, yes, you're reading it correctly. Invesco operates TWO ETFs that both track the Nasdaq 100. There's no gimmicks, no frills, no hidden fine print. Just two Nasdaq 100 ETFs. So, what's the difference between QQQ and QQQM exactly? The answer is the expense ratio. QQQ charges 0.20% and QQQM charges 0.15%. You may be asking yourself: if Invesco wanted to charge 0.15% for an ETF that tracks the Nasdaq 100, why didn't it just lower the expense ratio on QQQ? It's a good question and the answer, quite simply, is money. Just 0.05%, the difference between the two expense ratios, on a $150 billion asset base is about $75 million in revenue annually. Invesco may not come right out and say it, but why in the world would they give up that kind of revenue when it's already the 5th largest ETF around even with the higher expense ratio? Launching QQQM with a lower expense ratio gives investors the opportunity to achieve the same exposure with a lower cost. If QQQM is available for cheaper than QQQ, does that make QQQ irrelevant? Not exactly. The answer to the question of which ETF you should choose comes down to a couple of things. First, while the expense ratio of QQQM is lower, you have to consider the total cost of ownership. By that, I mean you have to look at the expense ratio as well as the spread. The spread is essentially a measure of liquidity and is the cost of trading shares. Generally speaking, the larger a fund is and the more people it has trading shares, the lower the spread. QQQM has nearly $1 billion in assets, which is a good number, but QQQ has more than $150 billion. Not surprisingly, its trading costs are lower. source: ETF Action The "average spread" column is the one we want to look at. The spread on QQQ is virtually nothing because it's so large. QQQM's spread, while larger, is still just 3 basis points. It's not nothing, but it's still a very small number. When tallied together, the total cost of ownership for QQQM is 0.18% (the 0.15% expense ratio plus the 0.03% spread) vs. 0.20% for QQQ. From a total cost of ownership perspective, QQQM edges out QQQ. That doesn't mean QQQ can't still be useful. If you're trading a very large block of shares, the liquidity of QQQ could make it the better choice, but you'd be talking a huge block of shares. For most retail investors, it will be a non-issue. If you're a long-term buy-and-hold investor, QQQM holds a slight advantage over QQQ." MY COMMENT There you go GridSmasher.......a very slight advantage for QQQM.
I was.....medium.....green today. BUT.....I got beat by the SP500 by 0.77%. I think the SP500 has gained at least 1% to 1.5% on me recently. I have not calculated my year to date gain recently so I dont know how I compare to the SP500 index at this moment. Right now the SP500 is at +21.86%.
A very sad TALE.......and....a lesson to many. I Lost $400,000, Almost Everything I Had, on a Single Robinhood Bet A young retail trader explains what it’s like to make the retail trade from hell. https://www.vice.com/en/article/bvn...st-everything-i-had-on-a-single-robinhood-bet (BOLD is my opinion OR what I consider important content) "I was 26 and stupid.I had arrived in the U.S. when I was 18. I didn't have money and worked shitty jobs to get through college. I didn't go to a nice school, and I've worked in sales ever since I graduated. My first job paid me $40,000. Next one $50,000. So I basically only started getting money like three and a half years ago, when I got a good job. And I was like, Oh my God, this is really great. I had no other passions other than really earning money, just stacking it up, so I just worked and saved up quite a bit. That's all I did for three years, and I just needed to do something else to kind of take my mind off of work. Because if I kept working like that, I'd go crazy, and investing seemed like a thrilling, fun journey. It was kind of like gambling. I'm super conservative. I don't spend anything. My monthly expenses are around $2,500 a month. I pay $900 a month in rent. The three biggest purchases I've made in the last 10 years were my laptop in 2014, which was around $1,500; my car, in 2017, which was around $2,700, $2,800; and then recently, I bought myself a new iPhone, which I've never done before ever, for $1,300. I usually use my mom's old phones when she gets a new one. It’ll come off as stupid, but I consider myself conservative from an investing perspective. I had $300,000 in a high-yield savings account, and I made like $1,000 a year on it, which was ridiculous, but I had been following the market pretty constantly. My job involves a lot of researching companies and trying to understand business and economic models. I like to read a lot, and there’s a lot of books on investing. I put chump change, like three grand, into crypto, when I only had five grand to begin with in 2017, and I lost all of it. But I was seeing everybody making money hand over fist, and I wasn't. I work in tech, and a lot of my colleagues were worth, like, $10 million. But the big tipping point was GameStop. It was just ridiculous, and I got greedy and had FOMO. It didn't start with Alibaba. It started with a $5,000 bet on AMC. Then the $5,000 became $15,000 when I bet on something else, then it became $50,000 when I bet on silver. And that's when I was like, Okay, I'm done with this. Now I want to buy a safe bet. And the safe bet was Alibaba. It had fallen from $330 to $245, but I had wanted to find a company where the price-earnings ratio was low, and every single analyst had a buy rating with like a 40-50% upside on it. Looking at all of TipRanks, my understanding was that this was a very, very safe bet with a limited amount of risk. Then I just went all in on this one single stock option: The $200 strike price call option on Alibaba. I would describe a call option as a leveraged bet on an underlying stock, which helps you increase the upside (or downside) of the bet you're trying to make. I initially invested $300,000 in February, basically every single liquid asset in my account. Not retirement, but everything cash. I didn't have anything left. My thesis was I might not make a lot of money, but I won’t lose much. The downside seemed limited, and that if worse comes to worse, it would go down to like $280,000. [The price started to continuously drop almost from the get-go.] I was watching it night and day, and it took a mental toll. The issue with Alibaba is it's dual-listed stock. It trades in Hong Kong and in the U.S. So all day you're watching pre-market and opening in Hong Kong, and then again in the U.S., Monday through Friday. You're constantly watching. My mom told me on April 13, Get out today. And it might have been ego. It might have been just stupidity, ignoring the facts. but my conviction was high. If you listened to “smart people,” they all said it would go up. So I was like, Hey, this is gonna rebound. And as my salary came in, I saved another $100,000. So in July, I put in another almost $100,000. I basically transferred all the liquid cash that I had and maxed out my account. If my company had not paid me at the end of July, I wouldn't have made my rent payment on August 1. My mom told me not to do it. And I still did it. When I invested the other $100,000, she told me sell tomorrow, sell tomorrow, sell tomorrow. I didn't listen. It was stupid, an extreme level of greed and risk taking. The next 10 days after that, it dropped by another 30 percent. It was fully out of the money by then. [Editor’s note: “Out of the money” means below the price at which the option’s owner can buy or sell the underlying security. In this retail trader’s world, it meant he was screwed.] The whole $400,000 turned to almost zero. [Editor’s note: For more about call options, go here.] It was at that time that I knew I had that there's no coming back from this. I was literally begging for it to come back so I could even get $300,000 out. Just praying, you know like once you go from desperation to literally praying? And I’m not even religious. But the truth was, I was still somewhat optimistic. I still had $75,000, and I was hoping that Alibaba would make a recovery, which of course it did not. My next thing was Okay, how do I earn all this money back? But it fell from $75,000 to $50,000 and … I was pretty depressed for like two months. I knew I messed up and felt stupid. I was so unhappy that my parents didn’t want to make me feel more stupid. Sure, my mom told me off a couple of times, but she was also supportive because she knew I was already beating myself up. I should have listened to her. She told me to diversify a little. Don't go all in on one. But I felt like, because she told me not to do it so many times, I actually had to. I sold and shut down my Robinhood account in October, right before my birthday. I decided I don't want to have this hanging over my head. [Editor’s note: He walked away with under $20,000.] The day I sold it, I was like, You know what? I fucked up. It was a mistake. But clean slate, dust yourself off and move on. I felt better when I sold, much better actually. One of the things that actually helped me was I met this random person. He told me a story that changed my perspective a little. This guy, he’s in his 50s or something. It took him a long, long time to save up like $150,000. He put it in the market, and he lost I think $110,000 out of the $150,000. What he told me touched my heart. He said that all he really cared about now was having enough money now to send this to two girls to college. And I was like, what am I really crying about? I have a roof over my head. I have food on the table. It changed my perspective. I don't believe in passive index investing. You know how Warren Buffett made a multimillion dollar bet that the index will outperform a bunch of hedge funds over a decade long period? My truthful belief is I don't necessarily believe passive investing to be the answer. But I also don't think this maniacal [way is the answer either], because a lot of retail traders are simply not educated, and trading stocks is not within their circle of competence. I feel like the younger folks are really, really stupid, especially folks who have money now. There’s a lot of other folks like me who think they know the stock market and the right way to manage risk exposures and diversify, but a lot of them do not. They're just overconfident idiots. When you want to do videos on YouTube about credit spreads or any of these options or derivative-centric strategies, which have inherent risk, most people have this inclination to believe they're smarter than the rest. The truth is we're not. I was fucking stupid. I had no idea what the hell I was doing. I just felt so confident in my bet. It's my fault. At the end of the day. I was stupid enough to not diversify. But I don’t think Robinhood is a net positive for society. The way it's designed, you get dopamine hits. When you place a trade, when you see it go up or down, the green or the red, it's addictive. If their model is payment for order flow, there's no question they just want you to trade, no matter if you win or lose money. [Editor’s note: “Robinhood Markets Inc. gets about 80% of its revenue from payment for order flow,” according to Bloomberg.] Making Facebook addictive is one thing. But making people's financial livelihood addictive is a whole next level of evil. And Robinhood has gamified their application. It hurt me quite a bit. I've been fortunate and lucky, and I'm still young. But if somebody who's working a minimum-wage job gets addicted to stuff like this, that is financial ruin, and that's what I don't want. Alibaba is today trading at $125, which is almost half of where it was at the beginning when I bought it. In retrospect, it's extremely obvious that it was a stupid decision from a risk management perspective and from a basic investment fundamentals perspective—a combination of ego, greed, overconfidence, and FOMO. Still, if I could do it again, I wouldn't have put the other $100,000 in, but I would have still made the initial $300,000 bet, even if I would have lost it all. Had I not gotten this lesson, had I not lost the $300,000 now, I would have thought Hey, this is something within my circle of competence, which I absolutely know now it is not. What if I had waited another three years, and it had been $2 million instead of $300,000? When I lost the money, the things that I regretted were actually not losing the money. I realized I just had no other passions at all. For three years now, all I've done is work. I can't think of one weekend when I was just having fun. How stupid is that?" MY COMMENT YES....another SAD TALE from a single stock trader......or at least someone that thought they were a trader. What a beginning investing experience. Probably the DUMBEST thing in all the above is that this person......STILL.....after this experience says: "I don't believe in passive index investing. You know how Warren Buffett made a multimillion dollar bet that the index will outperform a bunch of hedge funds over a decade long period? My truthful belief is I don't necessarily believe passive investing to be the answer." UNFORTUNATELY the GAMBLING and TRADING mentality is very strong and hard to break. As usual I will say.......the KEY to real wealth for most people is steady, long term investing.
