I Lost $150K in a Day
youngmoney.co
youngmoney.co
New metrics always being invented to justify this/that, but plenty of stocks were at 100x Price Sales just a few months ago... Which pretty much never will make sense for a decently sized company.
Yet somehow the FAANGs which are effective monopolies sit at 20-30 PE, while Costco is at 45.
The market is not efficient at all, and I don't know if it's just blind index investing, herd behavior in fund managers or what.
Seems to me we need a real correction to flush a lot of the idiocy out of the market. The government has supported speculators at every turn since the GFC, which is creating a weird moral hazard, most prominently now in housing.
Fortunately inflation has forced their hand, and 10y rising even to 3-4%, and mortgages to 6% will crush most of the speculation.
So even stocks without dividends have a measurable intrinsic value
In fact it would be a cool subject for some study to see if there's a link between gambling and it's motivations/addictions and these type of products (including some trading cards).
My uneducated guess is that the motivation for collectors and gamblers are quite different.
Then again, that mindset also prevents me from losing all my money.
I'm cool with that.
Now NFLX is down crazily and waiting for TSLA to split again. 10000% gains and I will sell it.
Anyway, it's refreshing to read a story with loser-bias for a change, as opposed to survivor-bias which we get here by the dozens.
The funny thing is I also quit Google shortly after Dan did and independently had been trading stocks to live as well. Fortunately I started as a result of the pandemic dropping the market. Once I started raking in money, I left the job. I know of Dans story bc I went to him for advice. I thought he was still in it.
His story was a reality check and made me somewhat more cautious. But really only in the back of my mind sitting next to another question: “when is it my time? When will I need to back to work bc I have nothing?”
God damn, I feel like growing up we leaned too hard on hokey “Money can’t buy happiness” or “Money isn’t everything” narratives, and thus people never prioritized making as much money as possible. Now so many problems faced by these younger generations all have a common denominator: not enough money. That’s why we see these risky gambles and moonshots and digital pyramid schemes.
My message to future generations would be this: You need money, you need a LOT of money. There are many amazing things in this world but they will all be out of reach for you if you do not have money. If you’re not making enough money, you’re doing something wrong, and the longer you’re in that state the worse off you will be. Get money.
It's almost as if the "oh i actually need money" epiphany only happens later in life and leads to the dynamic you mentioned.
And so life for millennials and younger is way different than it was for boomers and older. Life is more like being a vagabond rather than the stereotypical financially-successful family-oriented life of older generations. I blame the social breakdown over the last two decades and I blame the failed economy. Just have to live life day-by-day and whatever happens, happens.
It is not difficult to get high paying jobs. I also don’t understand what loyalty has to do with anything. I’ve not been loyal to any company and have only gotten better and better jobs with ever increasing salaries.
Over the past two years I have seen more and more friends starting to do day trading, some of them even waking up hours earlier before work to read about stocks and organize their trades for the day. Is this really just irrational gambling with extra steps? And if so, why aren’t those people, which I consider pretty reasonable otherwise, are led to believe their reasoning and knowledge will give them an edge.
It is easy actually. Do you consistently (over several years) beat the reference index ? Then you are good.
Retail people discovering leverage in deriv contracts will naturally sort itself out in the long run.
Most fund managers don't achieve this:
"Most active fund managers in the US failed to beat the market over the past year, according to another dispiriting report on an industry that often claims it will come into its own during periods of volatility."[0]
An a complete outsider to that field, I'm curious how (and why) they keep their jobs.
[0] https://www.ft.com/content/7e4c0d91-8b6d-419b-9be3-80131d5cb...
I was thinking about this re: knowledge work. It's pretty much impossible for it to be a 40 hour a week job, as you will be thinking about the problems and working through them all the time, in bed, while exercising, whenever. It can become all consuming.
Original quote: "When you have mastered the market at 23 years old, and you're up 6000% in less than a year, you don't think about wealth preservation."
It is interesting reading some of the comments, a lot of negativity floating around on the interwebs I suppose.
self-congratulatory and boring
If you go through the comment section on posts from 10 years ago, you'll find a higher concentration of posts from C-level execs, startup founders, and experts with deep domain knowledge.
> Please don't post comments saying that HN is turning into Reddit. It's a semi-noob illusion, as old as the hills.
> I'm at a year and a half. Hacker News is turning into Reddit. It's following the exact same path, albeit thankfully slower, and the causes behind that path—influx of users, need for attention, karma lust—aren't causes that Paul is looking to fix.
> Reddit's not the worst thing in the world, but make no mistake, we're headed there.
I can't say I disagree.
Actually, this particular type of article (sensational business-related blog post, let's call it) used to appear a lot more than it does today. Note that it got flagged in this case.
> And the craziest part about it? I was still up more than $100K in a year and a half. Not too bad.
Why is this on HN?
Then I thought, "yup, another reason to avoid active trading, which I already know in my bones is a poor use of my time, money and energy" and stopped reading.
The fluctuations on a 401K really are only significant if it occurs during a time in which you are relying on those funds, near or at or during retirement. Nobody with a 401K 'lost' anything in the last few years unless they withdrew from it.