Official Investment Thread

[SoonerAviator]

I searched around but didn't see that anyone had started a general investments/stock market thread. I figure it could be fun to see what market trends/sector analysis we might come across, as well as any strategies that would be worthwhile to try (or avoid).

Anyone love tossing it "all on black" with naked options these days? ETFs? Favorite financial websites/forums?

I generally keep most of my 401k investments in low cost index funds, but have accumulated a few stocks that I probably need to look at swapping to move to higher-growth potential.

 

[RyanB]

I bought MU today.

 

[WannFly]

I converted my 401k to self directed investment and never looked back, been a couple of years. Last year took some advise from Fool and made some money, one of their premium services that I had signed up for 1 year.

Played some Covid stocks too

 

[SoonerAviator]

I converted my 401k to self directed investment and never looked back, been a couple of years. Last year took some advise from Fool and made some money, one of their premium services that I had signed up for 1 year.

Played some Covid stocks too

I have a bunch of stock that was gifted to me when a company I worked for went public. I ended up with 40%of my annual salary given to me as stock and it has since doubled in value. However I'm no longer with that company and while they are still a healthy manufacturing company, I'm not sure that I want to hold my position in it. May have to roll it into a self- managed IRA or similar. Now isn't really the time for it, in my opinion as there seems to be a lot of volatility and over valuations. I don't mind being aggressive with it, but I'm not usually one to throw it all in one stock.

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[WannFly]

I have a bunch of stock that was gifted to me when a company I worked for went public. I ended up with 40%of my annual salary given to me as stock and it has since doubled in value. However I'm no longer with that company and while they are still a healthy manufacturing company, I'm not sure that I want to hold my position in it. May have to roll it into a self- managed IRA or similar. Now isn't really the time for it, in my opinion as there seems to be a lot of volatility and over valuations. I don't mind being aggressive with it, but I'm not usually one to throw it all in one stock.

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I agree there is too much volatility in the market, last year was super volatile and sometimes I had to just not open the portfolio for extended period of time so that I don’t have see the portfolio in negative (by a very big amounts).

But, if you can hold your breath and go through it.... it’s rewarding. For me it’s all in 401k, so, I won’t reap the reward until that age and I might not even live that long

 

[optionizerSS]

I have a service that I signed up for this summer called optionalarm. I trade 2 accounts and it is too hard working my regular job and managing 2 accounts so figured I'd pay them to find my trades. They have a good track record but seem to get in way too early and they have a 50% stop and 50-60% target. It usually pulls back about 30% before turning back up and takes 1-2 weeks to hit target. I'm not real happy with them. Overall I'm up with them but don't like the large pullbacks. So anyway, they alerted AAPL today and NIO a couple of days ago so I'm holding March calls for them. I also had PLUG and DKNG from them but they have been horrible so I closed those today for a loss. I'm also a member in a Discord room called EFO Edge. You can find them on twitter. Look for @bearingtontrades on there and you can get to EFO Edge. They alert several a day and the 4 mods each usually make between $10,000-$20,000/day. There are days they have losers but overall they are good. The one bought $100,000 of TSLA puts near the end of the day today. He made a bunch but not sure how much. But he was up $20,000 at the end of the day. Their trades typically either last anywhere from an hour to a few days.

I also trade my own trades. I do not use any moving average indicators, fibonacci retracements or anything, only price action. I learned this system under Rob Smith and it is called The Strat. It uses numbered candles. An inside candle is a 1, an outside is a 3 and everything else is a 2. My favorite setup is a 3-1. That is an outside candle followed by an inside candle. Your entry is as soon as it breaks the high or low of the inside candle and your target is the high or low of the outside candle before it. Very easy if you have full timeframe continuity. They also focus on multiple timeframe continuity. I used to use moving averages, MACD, etc but once I learned the strat I ditched all of that and finally started making money. If you are interested in The Strat look for it on twitter and facebook. I'm not on FB but am on twitter and there is a large strat community. There is a former airline pilot on there that we call the 1 minute millionaire. He trades off the 1 minute chart right at the open and usually makes between $400-$3000 every morning. Last year I think he said he only had 4 red days all year. Look for @JamesBradley on twitter. @robintheblack is the creator of The Strat. I scalp AMZN using the strat. I use a weekly, daily, 60 minute, 30 minute, 15 minute and 3 minute charts. I also have a script that has the boxes representing each timeframe that will turn green or red. If they are all green or all red then it is a go.

I'm not trying to push these on anyone and I get nothing from it. I have been with about 15 different services and the strat changed my trading and started making me money and EFO Edge ramped it up.

The Strat is free and all of Robs videos and twitter and facebook help is all free.

 

[Sac Arrow]

I don't do my own trading anymore. I have most invested in stocks, but some invested in private holdings are long term potential payoffs. I use an independent financial advisor, not some corporate jock trying to hawk the company's funds. It's worked out better than I could do on my own.

 

[Huckster79]

Im just getting to the point to jump in... wheres the best spot to start educating oneself on how to do it?

 

[optionizerSS]

I'm being cautious here. I went through some charts today and alot of doji candles (indecision) on the monthly January chart and quite a few with a 2 down (January candle went lower than December lows). If the 3 major indices break January lows then we may see a correction.I have alerts set to start buying puts at that point but will keep a tight stop on them. We could just continue running up though too. Earnings season kicked off last week and that can throw weird signals so I'm not over confident either way but I'm leaning towards us seeing a pullback soon.

Disclaimer: I am not a financial advisor and this is only what I m looking at and thinking

 

[asicer]

Im just getting to the point to jump in... wheres the best spot to start educating oneself on how to do it?

I would recommend against the WallStreetBets sub-Reddit if you are the gullible type.

 

[optionizerSS]

Im just getting to the point to jump in... wheres the best spot to start educating oneself on how to do it?

I would suggest looking up @robintheblack on twitter. He is the creator of The Strat. He doesn't give alerts but gives his take on the markets and individual stocks. He started on the floor at the CBOE (Chicago Board Options Exchange) in Chicago at 15 years old. His father was a Merill Lynch guy at the CBOE. I would also suggest checking EFO Edge on twitter. Look for @bearingtontrade and he can point you to it. He is one of the guys that run it. They have educational material but also send out alerts on twitter and on their discord channel

 

[tspear]

Im just getting to the point to jump in... wheres the best spot to start educating oneself on how to do it?

If you like the oracle of omaha, the research value investing.

If you want to minimize effort, look at standard year funds with the rails and industry they model. Then you can role your own index funds matching the year fund.

If you want to say trade, pick a paradigm, there are many. So far every one I have every looked at, depends on a certain market condition to work. E.g. a bull market, a bear market, high inflation, no inflation.... When the market fundamentals change the approach loses. So if you want to day trade, just be ready to switch approaches.

Never get emotional when trading, period.

If going to invest long term, look up dollar cost averaging.

Tim (usual all disclaimers apply, no I am not a financial investor and this is worth exactly what you paid for it)

Sent from my HD1907 using Tapatalk

 

[FastEddieB]

Im just getting to the point to jump in... wheres the best spot to start educating oneself on how to do it?

If you mean investing, I recommended “One Up On Wall Street” by Peter Lynch.

If you mean speculating/day trading, I recommend “Fooled By Randomness: The Hidden Role Of Chance In Life And In The Markets” by Nassim Nicholas Taleb. It points out how easily we can trick ourselves into seeing patterns that aren’t really there, and remembering our hits while forgetting our misses.

If you want some idea of how excruciatingly hard it is to correctly forecast market moves, this podcast from Radiolab: https://www.wnycstudios.org/podcasts/radiolab/articles/267356-fast-cash-flash-crash-mad-dash-clash

That last one shows what day traders are up against. As they try to visualize “Elliott Waves” or “Head and Shoulder” patterns or “candles”(?) they’re working at trying to outguess computers that are programmed to eke out such patterns and buy and sell in milliseconds. Good luck with that - at least to the large majority of folks who give it a try.

 

[FastEddieB]

Oh, and in that other thread, I was questioned for my mentioning of transaction costs. And I stipulated that transaction costs are at or near zero with common stock trades at many brokerages. But one must also figure the tax consequences - specifically the difference between short term and long term capital gains. Admittedly, one should rarely allow tax consequences to “wag the dog” when it comes to investment strategies, but it remains the fact that long term gains are favorably treated, while short term gains may be taxed at your normal marginal rate - up to 37% today. That does have to be figured in when contemplating investment strategies.

 

[Huckster79]

Thanks all. I have investments but what id call training wheel ones... would like to venture out on my own a bit, so thanks for the advice

 

[SoonerAviator]

If you like the oracle of omaha, the research value investing.

If you want to minimize effort, look at standard year funds with the rails and industry they model. Then you can role your own index funds matching the year fund.

If you want to say trade, pick a paradigm, there are many. So far every one I have every looked at, depends on a certain market condition to work. E.g. a bull market, a bear market, high inflation, no inflation.... When the market fundamentals change the approach loses. So if you want to day trade, just be ready to switch approaches.

Never get emotional when trading, period.

If going to invest long term, look up dollar cost averaging.

Tim (usual all disclaimers apply, no I am not a financial investor and this is worth exactly what you paid for it)

Sent from my HD1907 using Tapatalk

Agreed. I do feel that you need to pick a strategy based off of what part of the market conditions (and forecast) you want to target and find the tools that best evaluate those potential investments that meet the goal. I do feel that currently, the market will continue to hold roughly where it's at until probably fall-2021 when the stimulus packages have subsided and the ramifications of all of the rent forbearance and business loans have ended. The market may see some contraction after that, as well as the real estate market for commercial realty as many companies reduce business floor space since some employees will remain working from home. Maybe the impact of the service/entertainment/travel industries coming back to life will offset it, but in not confident in that.

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[optionizerSS]

You are correct about the tax implications on short term trading. It is harsh. Futures trading has much lighter tax implications. I have traded futures before but never had much luck with it but I was using oscillators and schotastics back then.

 

[FastEddieB]

You are correct about the tax implications on short term trading. It is harsh. Futures trading has much lighter tax implications.

Pardon my ignorance, but if you trade a futures contract for a profit in less than a year, is that not treated as a short term gain?

 

[optionizerSS]

I don't believe so. I can't say based on experience since I wasn't profitable trading futures but from what I read they are taxed as regular income I believe

 

[FastEddieB]

I don't believe so. I can't say based on experience since I wasn't profitable trading futures but from what I read they are taxed as regular income I believe

My assumption is that all short term gains aresubject to tax as regular income. That’s where the possible 37% figure comes in. That’s the drawback over long term gains, currently taxed at 15%.

 

[kyleb]

Maybe the impact of the service/entertainment/travel industries coming back to life will offset it, but in not confident in that.

I think there is a huge pent-up demand for travel/entertainment. Unfortunately, that industry hasn't had any income for the last 10 months, so some of them are bound to go under. That'll be a chaotic market over the next 6 months or a year.

IMO, the market that is really gonna suffer is business travel, whether we're talking airlines, business targeted hotel chains, rental cars, etc. The maturation of video conference technology and culture around it is gonna greatly reduce business travel, long term.

 

[optionizerSS]

My assumption is that all short term gains aresubject to tax as regular income. That’s where the possible 37% figure comes in. That’s the drawback over long term gains, currently taxed at 15%.

Yes, I think futures are taxed under long term. I'm not an accountant and hate dealing with taxes...lol. I have a CPA that handles all of that, just remembering all the chatter from back when I was trading them

 

[FastEddieB]

Yes, I think futures are taxed under long term. I'm not an accountant and hate dealing with taxes...lol. I have a CPA that handles all of that, just remembering all the chatter from back when I was trading them

Easy to find out - from "Investopedia":

"Futures traders benefit from a more favorable tax treatment than equity traders under Section 1256 of the Internal Revenue Code (IRC). 1256 states that any futures contract traded on a US exchange, foreign currency contract, dealer equities option, dealer securities futures contract, or index futures contract are taxed long-term capital gains rates of 60 percent and short-term capital gains rates of 40 percent—regardless of how long the trade was opened for. As the maximum long-term capital gains rate is 15 percent and the maximum short-term capital gains rate is 35 percent, the maximum total tax rate stands at 23 percent."

I have zero interest in trading futures, but that's still nice to know - if a tad convoluted!

 

[optionizerSS]

I might start trading futures again but I'm doing good as I am right now trading options so not sure I want to throw another wrench into the works

 

[Sac Arrow]

Follow Putin.

 

[optionizerSS]

Just looked at some charts and got my watchlist together. Everything on it is bearish setups. Currently I'm holding AAPL march calls, DIS march calls, NIO march calls, NOK 2023 calls, SLV calls, and VXX calls. VXX is an inverse so when the market goes down VXX goes up. SLV looking very good tonight. Futures are up about 6%. S&P, DOW, and NASDAQ futures are all down right now. They were down about .8% but have bounced back.

My watchlist is:

AMZN below 3184.55 > target 3175.00
NFLX below 515.73 > target 509.25
SPY below 364.82 > target 362.03
PYPL below 225.00 > target 215.00
AAPL below 126.38 > target 123.45
NVDA below 492.00 > target 469.17
ROKU below 316.46 > target 268.14
CAT below 179.34 > target > 175.11
QCOM below 147.14 > 141.11

Some of these (ROKU) have a long way to get there to trigger so probably won't trigger but some will. Some like SPY doesn't have much room until target is hit so I would likely trade weekly expiration puts on that. Others with larger targets I would be buying longer term expiration puts. NVDA I would likely be buying March expiration because it might take a few days or even a week to hit my target.

These are my own picks and you can do what you want with them but I will track them and see how many work out. I'm typically about 75% accuracy on these but only IF they trigger. No trigger and they don't count. I will keep tighter stops on any of these because longer term we are still bullish for now. If we do get a pullback I think it's only maybe 2 weeks tops then we bounce back but will see how things play out.
I usually do a weekly watchlist and also one each night but on;y did longer term ones this weekend due to everything going on. With the volatility I think I would get shaken out of shorter term trades but will be taking quicker scalp trades during the day if I see a setup or possibly alerts from the EFO Edge service I'm in.

We may go higher but if we break my levels for going up my targets would be previous highs and there isn't much room between my trigger and my target so won't be trading any longer term bullish setups right now

Also, I won't likely trade AMZN because of the price on options. Too rich for my account to hold overnight.

DISCLAIMER: I am not a financial advisor and this is for my own use

 

[FastEddieB]

I think there is a huge pent-up demand for travel/entertainment. Unfortunately, that industry hasn't had any income for the last 10 months, so some of them are bound to go under. That'll be a chaotic market over the next 6 months or a year.

This is maybe a good launching point for my philosophy on this.

Everything you know about the travel/entertainment industry is knowledge available to everyone*. So that knowledge is pretty much already baked into whatever a particular stock is selling for.

That concept is known as “The Efficient Market Hypothesis”. It’s not perfect, but goes a long way to explaining why it’s hard to find “buys” when everyone knows what you know. Is Tesla currently overpriced? I think that’s meaningless, except in retrospect. At Monday’s opening, the number of buyers and sellers of Tesla will be evenly matched, making whatever price it’s at the “right” price. Any imbalance will cause the price to go up or down, and if not random, it’s inherently unpredictable.

Maybe I’m jaded because I remember in the 1990’s being warned that Apple stock was overpriced. In retrospect, I don’t think that was accurate. To wit:

https://www.quora.com/If-I-invested-1-000-in-Apple-stock-in-1990-how-much-would-it-be-worth-today

Once I decided that “overpriced” and “underpriced” were essentially meaningless, it really helped me to see how little stock market prognosticators actually knew and how poorly they performed - not better than chance, on average, as the hypothesis predicts.

That said, I do think that in spite of everyone having the same information, an informed investor can have intuition or insights as to how well or poorly a given company will do, and that can aid them in selecting stocks that, though fairly priced at any given moment, and equally likely to go up as down in the short term, can have growth potential others can’t see. I think that was one of the lessons I took from the aforementioned “One Up On Wall Street”.


*Barring insider knowledge, and trading on that is illegal.

 

[FastEddieB]

My watchlist is:

AMZN below 3184.55 > target 3175.00
...
AAPL below 126.38 > target 123.45...

I really hope this doesn’t come across as bragging, but I think it’s a perfect setup for comparing different market philosophies.

I own AMZN with a basis of about $235/share. Will hold it as long as I like the company.

I own AAPL with a basis of under $1/share. Ditto on how long I’ll hold it. Nice benefit is regardless of price moves, it pays a nice little dividend as well.

From my perspective, day or option trading is chasing after nickels and dimes in all the little wiggles on charts, while ignoring the dollars to be made by just buying and holding good companies. Not to mention the work involved. But more power to you if you can make it work - keep it up.

And I’d be very curious how much you make or lose on your trading in the month of February based on your watch list going forward - if you’d like to share that information, of course.

 

[kyleb]

This is maybe a good launching point for my philosophy on this.

Everything you know about the travel/entertainment industry is knowledge available to everyone*. So that knowledge is pretty much already baked into whatever a particular stock is selling for.

I agree with this philosophy. But the challenge for the traders is figuring out when the cash will start flowing again (the timing) and who will tap out before the money starts flowing again. And that's why the traders can (not will) miss the value of the equity.

 

[optionizerSS]

Yes perspective changes things. If your plan is long term then no reason to sell them. But from my perspective as a day trader/short term options trader this strategy works well. In January I made about $1500 using this strategy and I was never in for more than about $5000 total on all trades at any time so my risk was fairly low. I'm up about $3000 in the last 6 weeks. And as far as chasing after nickles and dimes that is a matter of perspective too. I know quite a few traders that have quit their jobs and live off of these nickles and dimes. One moderator in the EFO Edge room made $650,000 last year doing the same thing. He made $20,000 Friday, most of that buying puts on TSLA. To make $1500/month using your strategy I would probably have to have about $300,000. Most people can't do that, including me. In atypical scenario a stock like AAPL or AMZN may make 20%/year at best. A good day trader can increase their account by 100%-200% per year but the risk is higher and it is more work. I work from home for my day job and have 4 monitors set up for trading so to me I'm sitting in front of the screens anyway so really not much extra work for me.

I will update how much I make in February but some of that will be from other trades from alerts in one of the other services. I can try to separate out just my watchlist and I won't enter all of those trades even if they do trigger. But we can see which ones do hit their target if triggered.

 

[FastEddieB]

I can try to separate out just my watchlist and I won't enter all of those trades even if they do trigger.

No need. Just curious as to how consistent your overall gains are.

 

[optionizerSS]

No need. Just curious as to how consistent your overall gains are.

I'm a very conservative trader. I typically only go in a trade for no more than about $700 and most trades probably under $500. I could have probably easily made $4000-5000 last month if I wasn't so conservative. I usually sell at around 25% profit but many run to 50-75% but I'm too chicken to hold out for it. And when I say 'chicken' I'm referring to my conservative nature but I'd rather take 25% than to end up losing money

 

[optionizerSS]

No need. Just curious as to how consistent your overall gains are.

Back when I was doing traditional technical analysis I was tracking my trades and had about a 75-80% winning % but my losers were usually bigger then my winners so my profit/loss (P/L) wasn't great. Now I'm probably closer to 70% but my winners are bigger then my losers since I ditched all indicators.

 

[optionizerSS]

Here are my daily results for January. Friday killed me. I lost my discipline...lol

$283.42
-$366.96
-$531.29
$818.46
-$379.84

$340.61
$199.31
$150.54
-$794.78
-$380.88


-$169.67
$559.42
$497.96
$360.16

$575.54
$341.32
$566.16
-$5.14
-$737.57

 

[NealRomeoGolf]

I like dividends.

 

[optionizerSS]

Trading isn't easy and I will be as transparent as I can be. If it helps anyone then great. I'm on Twitter and try to help those on there too. This isn't a pride thing for me so if I have a losing day I'll be honest about it. Very few people can make money trading and I'm lucky enough to be doing that now. It took me several years and several thousands of dollars but I didn't give up and if I can help shorten that curve for others then I'm glad to help. I also understand most don't want to day trade like me but I will share my knowledge.

My watchlist above is based on reversals and breaking the previous candles low on either a weekly or monthly timeframe

Here is a screenshot of a trade I made August 5th. It's the most recent screenshot I have. Pretty sure this was TSLA. I know I sold this one too early but if you rode this to my red line you probably would have made about $1000 or so with 1 contract. This would have been about a 2.5 hour trade

EDIT: went back and checked using my records and the On Demand function in thinkorswim. It was actually NVDA and I did not actually enter this trade. But if I would have I would have likely bought the current weeks 450 calls and they were at about $3.30 at entry and about $5.15 at exit so 56% win or $185/contract. I would have likely only traded 1 or 2 contracts but know I wouldn't have held until my target I noted in there. TSLA moves much faster due to IV so that's why I said about $1000 earlier. Oh, and this was August 3rd, 2020

 

[FastEddieB]

Here are my daily results for January. Friday killed me. I lost my discipline...lol
...
I know I sold this one too early but if you rode this to my red line you probably would have made about $1000 or so with 1 contract.

...
It was actually NVDA and I did not actually enter this trade. But if I would have I would have likely bought the current weeks 450 calls and they were at about $3.30 at entry and about $5.15 at exit so 56% win or $185/contract. I would have likely only traded 1 or 2 contracts but know I wouldn't have held until my target I noted in there.

Don’t take this personally, but there is an informal logical fallacy called “Special Pleading”.

This is not my first rodeo going back and forth with a day trader or someone defending technical analysis as a reliable way to profit long term from small market moves. Invariably I’ve been regaled with arguments like those above. “If only I had followed my own rules, I would have made $xxx.” Or “I would have turned a profit in February if I just had stuck to my guns”. Or “Except for that one big losing trade in AAPL, which I should have seen coming, I would have been WAY ahead following my system”.

I think that mindset is covered by Taleb in “Fooled By Randomness”. Regardless, it’s well known in skeptic circles as a commonly used fallacy.

A few others to always have in mind are “cherry picking data”, “confirmation bias” and “moving the goalposts”. I have in mind a thread on another forum where a forum member confidently forecast $40 silver in the near future. Years ago. I’ll see if I can find it.

edited to add: Found it! The original prediction was made in 2011. Lots of back and forth (27 pages!) but covers similar ground to what I’m discussing here.

http://www.internationalskeptics.com/forums/showthread.php?t=205790&highlight=silver&page=26

 

[JOhnH]

I don't do my own trading anymore. I have most invested in stocks, but some invested in private holdings are long term potential payoffs. I use an independent financial advisor, not some corporate jock trying to hawk the company's funds. It's worked out better than I could do on my own.

Same here. Back when I was young and stupid (as opposed to old and stupid), I used to trade my own stocks. Admittedly, using an advisor that is truly plugged into the business is a lot less exciting than making my own huge gains (and huger losses), but over the years it has saved or made me a ton. The biggest benefit is instead of panicking while reading the dire news reports, I run my "dump it all" thoughts by my broker and he calms me down and things always seem to be better for it.

 

[ebetancourt]

There are so many variables in all this that no one philosophy is "best." How much money are you trying to manage, what are your goals, what is your time horizon, are you trying to grow your wealth or retain it, how much time do you have to spend on money management, what tools do you have access to, ...

There is a lot of room between day trading and buy and hold. I'm not a follower of either, but something in-between. Seems to me each person should take the time to understand their own situation and select the best option for their position.

 

[SoonerAviator]

There are so many variables in all this that no one philosophy is "best." How much money are you trying to manage, what are your goals, what is your time horizon, are you trying to grow your wealth or retain it, how much time do you have to spend on money management, what tools do you have access to, ...

There is a lot of room between day trading and buy and hold. I'm not a follower of either, but something in-between. Seems to me each person should take the time to understand their own situation and select the best option for their position.

Sure, but that's part of why I started this thread. To hear what situation others are in and how they are choosing to respond to that situation. I don't know any "stock brokers" personally, and I'm not sure that the CFP lackeys at Edward Jones or similar are any more informed than I am since they mainly want to peddle whatever products their company has to offer rather than customize a solution specifically for me. Additionally, I'm playing with less than $500K of total 401K/stocks/etc. so it doesn't likely doesn't make a stock broker really want to spend much time optimizing anything versus just letting it ride in a broad index or mutual fund. I actually loved my investments courses in college and probably would have pursued something along that avenue if I had lived in a city where those type of jobs were more prevalent, but I honestly need to brush up on my knowledge and understanding of the various vehicles and such as it's changed a great deal in the 10 years since I graced the halls of an investments classroom.