Amazon engineer will let strangers manage his $50,000 stock portfolio 'forever'
cnbc.com
cnbc.com
That's the real message that's going to be received by a large amount of the population reading this story as it makes the rounds on outlets like CNBC.
Also he says if it hits $25K, then the game is over. So it's only $25K at real risk, not $50K. (True, the stocks could fall further before he liquidates.)
Makes me wonder if perhaps his account balance is $25k personal, and $25k matched by Robinhood for the stunt.
https://support.robinhood.com/hc/en-us/articles/217072366-Pa...
You can learn more of the $25k rule here: https://support.robinhood.com/hc/en-us/articles/217072366-Pa...
They can play with purchase what ifs in the stock sandbox, and plan and grow in the real tabs... among many many other things...
Disclosure: I have started putting away some money in a vanguard Roth IRA now. I don't think about it too much because it is the minimum vtsax would let me invest anyways.
I suggested Delta.
A teammate asked his dad for a stock tip and invested the rest in a company none of us had ever heard of.
Delta popped back +25% or so over the next bit (from memory).
His company made some announcement and the stock doubled in value.
... I learned a lot about how the world works from that class.
I always thought of stock-picking as something that the average Joe should be careful with. Trading on less information than insiders and slowly being eaten by fees and taxes. It's an under EV game.
Besides that there's the wisdom of crowds that will eventually follow the trends and invest irrationally (pump and dump). That's how bubbles are created.
Every day I would log in and manage my account - I was a commodities broker and I managed to build a pretty powerful little empire with my savvy transactions.
While not as powerful when it came to ore... my wheat holdings were no laughing matter... that was until the day I smoked pot, dialed in and accidentally sold all my wheat holdings as opposed to buying up all the other supply - thus eliminating my monopoly on the galactic wheat trade...
Man, Trade Wars was a blast in the early nineties.
But on the other hand I'm sure there are a whole lot of young people on the other side of things. Those who start learning about stock-trading and soon see it as a way to make money fast by taking huge risks. They get spammed by 500$ signup bonuses to various stock-trading platforms, they're presented with 100x leveraged trading options and such. I don't see much benefit in that.
What I think is young people should be taught how the market works with a huge grain of salt. Definitely not by letting them go wild with play-money since we all know what will follow up.
https://www.finra.org/investors/day-trading-margin-requireme...
does robinhood not have that?
If you want to have a hard limit on the loss, you'll have to buy a put option.
Much much much less common than a stock going down, but when large counterparties become insolvent, a lot of people start needing to write off big chunks of their positions.
If you put a limit on the stop loss then there's no guarantee it'll clear, but at least you won't sell for some ridiculously low amount.
The exchange might have circuit breakers that won't let a particular symbol change more than X% in a given period of time.
From [1]
> Robinhood is a stock brokerage that allows customers to buy and sell U.S. listed stocks and ETFs with $0 commission. ... we are able to maintain a lean bottom-line and pass the savings along to you, the customer ... Robinhood is an SEC registered broker-dealer and member of FINRA & SIPC.
[1] https://support.robinhood.com/hc/en-us/articles/202844869-Ab...
Active, long-standing account. If you're a sockpuppet you're a damned good one. :)
Out of curiosity, how significant is 50K to this guy?
10 years later the interest you earn on it will be more than the 30% you are putting in.
Games, books, whatever occupy you without draining resources.
How?
5% interest, $1,000 monthly injections, compounded monthly over 10 years. $120k in deposits, $36k in interest.
That said, I think Amazon has some unfriendly vesting terms compared to the SFBA-based companies I'm more familiar with.
And he can stop the experiment any time.
I was more commenting that many other people outside the industry are going to become familiar with this idea on a somewhat more visceral level now that it's at the point that CNBC is talking about it.
As an aside, you might be surprised at how many of those "seventh code monkey from the left" are clearing over $200k per year at Amazon. The last time I spoke to people I know at Google/Facebook I was hearing total annual compensation packages of about $250k for senior level in NY and CA.
If you don't have a family and aren't growing your spending habits to match your pocket you can easily have that much extra cash lying around (NB I hesitate to use words like "easily" because people tend to have an indignant reaction, but that doesn't really alter my point).
Anyway, it's an interesting experiment. Very popular over at /r/wallstreetbets.
You worked in AFT Picking, right?
Coming back to Amazon Fulfillment soon. Just couldn't stay away.
The only reason he is getting away with doing this for stocks is that Robin hood doesn't charge any per trade transaction costs.
Day trading cryto would kill him in trading fees.
You are overestimating his risk, right now, for stocks.
The current setup isn't likely to lose him much money. Throwing darts to pick your stocks will cause your stock portfolio to be surprisingly diversified.
Random stock pick is actually a not crazy investment strategy that is likely to get you the same amount of return as putting your money in an index fund.
Transaction fees in cryto, on the other hand, would cause him to lose 10k a month.
This is actually HIGHER than the on chain transaction costs.
The main downside is that as soon as Bitcoin goes super volatile Coinbase will go down like clockwork.
(And of course pay taxes on any dividends)?
It's kind of ridiculous, but most traders will have some sort of automated solution to help with it. The exchange you use should give you a nice report of your trades.
Was talking with your folks about your project at various recent Langley weddings.
Kudos for a great idea, well-executed!
We should stay in touch though, add me on LinkedIn if you use it:
The more interesting and complicated components are the UI and the scheduling and a publish-subscribe module that I created, tho no plans to open source it anytime soon.
What part of application is that for ?
Game events also get published through it (round end, trade placed, new round, etc)
I'd actually love to see more dedicated troll attacks. So far the main attack seems to buy $SEB since it's so expensive, but sometimes it later gets sold at a profit.
Personally, I've mentally written off the $50k so, I'll just be enjoying the show.
Good to know you've written of the $50K, because if those guys decide to mess around with this, that money is basically going straight out the window.
It's just as hard to lose money on stocks as it is to gain them (aside from racking up trade fees or something).
I mean, I understand that $50k might not be a lot for you, but if the aim is to see what the majority of random people on the internet feel like buying, while measuring the return of these decisions, this could be accomplished without putting up any actual money.
Two things:
1. This is assuming it was done for the press coverage, and not just as a hobby project
2. If I were to do this, I don't think I'd advertise it was fake money. What's the difference anyway? It's not as if people on the internet benefit at all from the investment return. I always assumed this was more of a "Twitch plays Pokemon" thing than anything more serious.
Looks like they're down $577.18 so far. Jebaited
What was second place, two shares of Zynga? :-)
I find the experiment pretty interesting, how many people will try to make him go to zero? How many will want to make the value higher? If you were leveraging a pump and dump house how does that work? And home much can you trade at once? (all would seem to be a silly amount, but it has to be enough to make reasonable trades)
And how do you know it is actually real money? We used to do office stock pools where folks would start the month with "$100,000" and got two trades a day, one at noon and one when the market closed (easy to do on the west coast) at the end of the month the one with the most "money" would "win". It was fun and taught me a lot about market volatility (and that I would suck as a day trader :-)) but there was no actual requirement for money to actually trade hands. And even at $50,000 you're not buying or selling enough to move most stocks.
As of current rules, you can only make one trade of one share every five minutes.
I will likely change and tweak these rules over time.
It would give a good window into the work-flow and skills required to do this successfully. Even if it's retrospective, going back a few years.
Amusing excerpt. Highly relevant, of course.
https://www.nytimes.com/2017/02/17/sports/football/indoor-fo...
(Disclaimer: I'm one of the developers)
I wonder if that'll be the case here, and if so, whether that means better or worse investing.
There have been other x plays streams with a small number of viewers that did pretty well at slowly beating their games. When you have thousands of people like TPP did, you attract trolls who spam "down9" ;)
https://www.twitch.tv/stockstream
Buying or selling a share is basically atomic, so there's no coordination needed apart from the overall portfolio. Looking at the portfolio, http://stockstream.live/portfolio.html , most positions are just a few shares.
He also talks about some regulation at the end. Does the entity needs to be setup legally in a certain way?
Here's the one I use, which has great rates: https://www.interactivebrokers.com/en/index.php?f=5041
The regulation bit not special, just a restriction on what trades are allowed.
Did you set it up as some formal entity or just through your personal account? Any pointers to learn about the restrictions. I'd love to so some interesting apps myself.
Update: I think i found it - https://github.com/sanko/Robinhood . Thanks!
Global Warming.
Rising Sea-levels.
Human stupidity.
Profit.
Your grandchildren will be grateful. Or spoiled brats.
Now you can extort from any company going there, wanting to build something the money for the little area you sell + the money it would cost to restart construction elsewhere - 1$ + the legal fees saved by not going to court.
ProTip: You might want to share the wealth with local legislators later upon, to avoid having zoning-laws changed.