Been seeing a lot of posts about extraordinary returns this past year... thought I'd share my own too.
Everyone could look like a genius in a bull market, but outsized returns demands outsized risk.
What I do to try to get the best of both worlds
- Use options: Had plenty of heartbreaks when my put gets assigned or shares gets called away, but that's how I get shares for cheaper or hedge against risks of big drops in the market. I generally only sell opti...
Everyone could look like a genius in a bull market, but outsized returns demands outsized risk.
What I do to try to get the best of both worlds
- Use options: Had plenty of heartbreaks when my put gets assigned or shares gets called away, but that's how I get shares for cheaper or hedge against risks of big drops in the market. I generally only sell opti...
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Just by investing in good companies instead of memes and biomed
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Average Joesephine OP FireLand27 : Hello,
My biggest winners are some growth stocks (Palantir, Sofi) and some cyclical stocks (e.g. robin hood, coinbase)- as a general rule of thumb, I look at 2 things
Macro elements: E.g My brokerage plays are in anticipation of falling interest rates leading to greater money supply and therefore more liquidity into crypto.
Forward PE ratio: Lower multiple = Closer to fair value. So stocks like Google are something I own too.
Of course sometimes I don't follow the rules and make some momentum plays but usually I don't sleep well when I do this.
Buy something that you can go to sleep with, I suppose is the most important:)
Average Joesephine OP Avalanche95 : Hello,
I did not start off with 100k, and had to work my up to get there. But that was clearly not the point.
What you're alluding to is exactly my point: That there are so many people flexing their gains now but what you don't see is the lows that they've had to/could go through. In fact if you look at my chart carefully, I've certainly fallen off the horse before (approx -50%) and it had certainly been hurtful.
As for taking risks, that's up to your own appetite. I'm not sure why you are criticising me for mine. I'm not advocating for taking big risks but taking controlled risks.
Just sharing some of my thoughts from the roller coaster which is the stock market. Thanks for taking the time to read and effort to leave a comment.
Average Joesephine OP Avalanche95 : I like your point about continuous learning- I too am always trying to learn, about macroeconomics, about psychology, about companies.
I also agree that it may not be for everyone if you do not have a certain level of capital to sell options, as they have some capital requirements.
However I disagree that it's an effortless way to generate wealth- it takes time to learn about all the things I've mentioned above before I decide to invest in a company.
I also disagree that putting in effort equates to better returns- if that's the case then you wouldn't have >90% of hedge funds armed to the teeth with CFAs underperforming the index. For the average person, you'll be better off buying the index fund.
What I'm advocating is to invest in good companies at fair valuation- and doing so through options is a way to generate steady income /reduce cost of purchase. I really don't believe in 2x,3x or 10x your money over a short time as that would involve tremendous leverage and risk.
If all I had was $1000, I'd rather it grow at 10% a year than try to 10x it and losing it all.
As for being the beta, I'm not sure where that came from. I certainly don't have any pride. We are just in the market hoping to reach our financial goals faster, so if I am wrong I am happy to change.
Average Joesephine OP glenda yung : I agree that investing in ETFs is an excellent method for beginners. Always keep it simple!
Average Joesephine OP Avalanche95 : Indeed, not everyone has the skill and stomach that you have to go up and down 10x
. Best wishes and I hope you reach Rome faster than I do :)