Investing megathread extravaganza

[DaFace]

A place to talk about investing stuff.

[Rain Man]

Originally Posted by DaFace

That sounds kinda sorta like something Rain Man was doing for a while. I think it worked until it didn't. The whole "stocks don't always go up" thing is more than a minor issue, especially if you're focused on volatile stocks that have the potential to tank.

Yeah, I started to type it and then had to leave for a meeting.

I had a 2+ year experiment doing something similar. At some point I had two stocks that moved around a bit but were pretty stable, and I theorized that they might move in opposite directions during their meanderings. They were RCL (cruise line) and PSX (oil). So I tried an experiment with them. I put Amount X in one and Amount .2X in the other. Whenever I had a day where I got a 2 percentage point change with the bigger holding outperforming the smaller holding, I would move 80 percent of the money from the bigger one to the smaller one. Then I would wait for the reverse to happen and switch it back.

The result didn't generate profit per se, but it let me build up the number of shares in each stock. In practice, I was selling .8X on a good day, parking it in a stock that had gotten proportionately cheaper, and then buying back the stock when random movements made the cheaper stock more expensive.

I did it for a year with those two stocks and liked what I was seeing, so I wanted to see if I could generalize it. I took a bunch of stocks and randomly paired them, and did the same thing with them.

I did this in two IRA accounts so I didn't have to worry about short-term gains. One is my active IRA that's still getting contributions, and the other is a rollover IRA that I don't contribute more money into.

The rollover was a great experiment because I'm mostly a buy and hold guy, so 95 percent of the activity was this "rocking back and forth" strategy. That made it easier to evaluate results. It was more of a hassle to evaluate in the active account, but still possible.

Here's what I learned. In a relatively stable market, it MIGHT have worked. I think it did. The rollover account was easy to evaluate, and what I saw was that this "rocking" strategy gave me returns that were 3.5 percent over what I would have gotten if I just kept the portfolio constant. The strategy was letting me increase my number of shares at no cost. So that was a big win, and it was clearly attributable to this strategy. The key was to be patient and never sell at a loss, and only make the flips when it was a gain over the previous flip. I invested in stocks that I liked, so I didn't really worry about it if I didn't flip for a while.

It was harder to tell the outcomes with the active IRA since I was adding money during the experiment. But I think the strategy didn't make money in that account, and it was mostly for one reason. At some point I "rocked" money into a couple of industries that were experiencing a sustained decline. Because of that, they kept going down and I was now overweighted in them, and I couldn't rock the money back. That kind of stank. I underperformed in that account and I think it was because of this issue.

Then the shutdown hit and I stopped the strategy because the random variations that I was concentrating on were blown out of the water by big industry-specific changes that were happening for specific reasons. The strategy's not going to work in that market.

I concluded that the strategy works if you're in a stable market that's mostly sideways. It doesn't work if you have a lot of sustained movement that differs by industry (i.e., differentials in stocks are happening for a reason as opposed to just random walks around a price range). That volatile environment has been happening for two years now, so my game has stopped. But if we ever get back to "normal", I might try it again.

[lewdog]

I wish some of you shorting experts would come in this thread and school us.

I don't know enough strategy to short for meaningful gains.

[scho63]

Originally Posted by lewdog

I wish some of you shorting experts would come in this thread and school us.

I don't know enough strategy to short for meaningful gains.

Don't get into shorting stocks. Buy long term puts instead.

Much safer and less risk

[eDave]

Originally Posted by Hog's Gone Fishin

Shorting should be out right illegal and people that short stocks should be shot in the face.

Gotta respect the balls though.

[scho63]

I still like my DIS and TLRY

[eDave]

Originally Posted by Hog's Gone Fishin

Why, its 99% institutions like citadel. They can all go lick my left testicle.

True. They've invaded crypto as well. And they are moving that market at it's will.

[chiefforlife]

Originally Posted by Hog's Gone Fishin

Question: How long would it take to make 201 trades that avg a 3.5% return ?

There's tons of stocks that are volatile enough for a 3.5% return during the coarse of a week if not a day.

For example TSLA just today opened at $897 .If you set a buy order at a 1% discount you could have picked it up at $888 and then set yourself up a standing sell order with a 3.5% swing at $919 and accomplished your goal.

As of right now the TSLA high /Low today is $881-$932 Thats actually a 5.7% swing today.

So my thinking is if you can make 201 trades and AVERAGE 3.5% assuming some will be less and some will be more , it will turn $1000 in to $1,000,000.

This sounds too easy. What am I missing other than stocks don't always go up. LOL

Could this be done in 3 years ?

I have a buddy that has done this with Tesla for a few years. He has made a ton of money doing it, Im sure he isnt the only one.

Its an expensive stock and risky if you ask me. He will spend about 40 thousand each time, then sell when it inevitably goes back up. So far, it always does.

My problem is thats its way over valued and my luck, everyone figures that out as soon as I buy it.

[DaFace]

Originally Posted by chiefforlife

I have a buddy that has done this with Tesla for a few years. He has made a ton of money doing it, Im sure he isnt the only one.

Its an expensive stock and risky if you ask me. He will spend about 40 thousand each time, then sell when it inevitably goes back up. So far, it always does.

My problem is thats its way over valued and my luck, everyone figures that out as soon as I buy it.

Out of curiosity, has he compared his own results to what it would have been like buying and holding in the same time period? It's not like it's been hard to make money off of TSLA these past few years.

[Rain Man]

Originally Posted by Hog's Gone Fishin

Shorting should be out right illegal and people that short stocks should be shot in the face.

I kind of wonder how much of the money in the "stock market" is really money that's invested in companies based on earnings and potential, and how much is gambling based on guessing investor psychology and market directions. All short selling is gambling, and I think all options are gambling. And I think a fair amount of stock volume is gambling. I'm not really a fan of that, recognizing that I've done a little bit of it myself over time.

[Rain Man]

Originally Posted by Hog's Gone Fishin

Tesla has been a swingers dream. I've got some bought right now at 915 with a standing sell order at 980 targeting a 7% gain.

It's also been a buy and holder's dream. Even with some fallback recently, I'm still up 700+ percent in 6 years.

[ChiliConCarnage]

Originally Posted by ChiliConCarnage

That Rivian listed and went to 100 billion marketcap. It's heading back down a bit.

I watched a video review of the truck and it does seem really nice. I like the fleet Management components built into fleetOS.

I just noticed this in the $50's. Wow, the hype didn't last long. It listed Nov. 10 around $100 went up to $175 a share and came back down quick. That's a heck of a roller coaster ride in less than 4 months.

[scho63]

Originally Posted by scho63

SchoDog giving you two:

Tilray TLRY
Disney DIS

Look for good upside over the next 2-3 months

20-25% or greater for both

Originally Posted by scho63

I still like my DIS and TLRY

Nailed the piss out of these two!

Great day for me!

[scho63]

Tilray has a HUGE short interest. If this keeps moving up, it could pop!

[KChiefs1]

This would be huge news. On my phone.

https://youtu.be/oGmWjNeFK50


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[Rain Man]

It seems like we have a lot of violently volatile days over the past couple of years. Pre-2020 a 1 percent change seemed kind of strong. Now it seems like 2 percent changes are not uncommon at all. I kind of wish things would settle down a little. I'm hoping this isn't the new reality.