The wealth-building thread

[amper42]

If you liked the SPY at 470, you gotta love it at 399.

 

[andrewjohn007]

I pulled everything out after catching Jeremy Grantham on YT

 

[Tom C]

I don’t even look at the value of my portfolio but twice a year. I’m not going to trade, so it doesn’t do any good to check more often.

 

[JeffS7444]

I don’t even look at the value of my portfolio but twice a year. I’m not going to trade, so it doesn’t do any good to check more often.

Good idea: I got no investment apps installed on my devices, and I don't receive any alerts. Of course the stock market will crash sometimes, but so far as I can see, most of the companies which make up the S&P 500 composite index still produce real value over time.

 

[Suffolkhifinut]

It's been a bumpy ride for sure. Nearly all equities have been slammed, even the largest entities; value-oriented ones less so. At some point this year it will become attractive to invest in them again. I couldn't tell you when that will be.

Particularly difficult at the moment when in most Western Economies inflation is heading towards 10%. People need to be extra careful at the moment with savings shrinking due to inflation, a perfect environment for fraudulent scams. If it looks too good to be true avoid at all times. Pyramid selling will become a fact of life as it takes some time for them to collapse and by that time the money has been salted away. Never underestimate many peoples gullibility.
A while back Barlow Clowes were a big investment company in the UK. One of their schemes had two guaranteed returns on the same portfolio, 11% & 6%. The 11% rate was based in Gibraltar, the 6% was based in London and was covered by the Government’s FIMBRA scheme. Barlow Clowes went bust and the guy running it went to jail, people with Gibraltar based investments got nothing back. There were demonstrations outside Parliament where the investors wanted the Government to reimburse them, to no avail.
Greed has its own reward or desperate people trying to protect their savings?
As a post note the criminal’s wife continued living in a house valued at the time at £2 million!

 

[JeffS7444]

One of their schemes had two guaranteed returns on the same portfolio, 11% & 6%. The 11% rate was based in Gibraltar, the 6% was based in London and was covered by the Government’s FIMBRA scheme.

Guaranteed 6% is already "too good to be true" IMO.

 

[Suffolkhifinut]

Guaranteed 6% is already "too good to be true" IMO.

It was in the ‘80s when 6% wasn’t difficult to find.

 

[amper42]

MaxPAIN data indicating SPY could be significant higher by May 20. This amazing sell off may be losing steam?

 

[JeffS7444]

Sounds like tech-bro tribal talk to me

 

[JeffS7444]

It was in the ‘80s when 6% wasn’t difficult to find.

Maybe, if you were looking and had money to invest 30+ years ago! I dunno whether I could have made the minimum purchase price for USA Treasury Notes back in those days - 10K USD, if I recall.

 

[Chromatischism]

MaxPAIN data indicating SPY could be significant higher by May 20. This amazing sell off may be losing steam?

Have a link?

 

[amper42]

Have a link?

SPDR S&P 500 ETF Trust (SPY) Options - Max Pain - Calculator | StockNinja.io

View SPY Options and Max Pain. Calculate Your SPY Option Profitability Odds with Calls, Puts, IV, Volume, and Open Interest Data.

www.stockninja.io

 

[Suffolkhifinut]

Maybe, if you were looking and had money to invest 30+ years ago! I dunno whether I could have made the minimum purchase price for USA Treasury Notes back in those days - 10K USD, if I recall.

At the moment finding a safe haven for your savings where you can keep up with inflation is impossible. Maybe the thread should be renamed ‘How to cut your losses,’

 

[amper42]

At the moment finding a safe haven for your savings where you can keep up with inflation is impossible. Maybe the thread should be renamed ‘How to cut your losses,’

While the SPY seems crazy at times it's a fools errand to bet against it long term. You will see bear and bull markets but the S&P 500 can offer a much better growth vehicle than a bank CD over extended periods. Having money in both vehilcles offers safety for near term needs and long term growth.

Its human nature to want to buy something while it's up and going higher. It takes a bit of training to know what to do when the direction has seriously reversed.

 

[Chromatischism]

While the SPY seems crazy at times it's a fools errand to bet against it long term. You will see bear and bull markets but the S&P 500 can offer a much better growth vehicle than a bank CD over extended periods. Having money in both vehilcles offers safety for near term needs and long term growth.

Its human nature to want to buy something while it's up and going higher. It takes a bit of training to know what to do when the direction has seriously reversed.

Or even better, when to get out before it's too late. Easier said than done. Studying the last 6 months has been very interesting. I can see the signs now that pointed to getting out in November/December 2021, so if we can learn to spot them and learn to follow the big players, that's the key. You can't swim against the current so you have to swim with the fish.

 

[digitalfrost]

With the current inflation into what would you get out to.

 

[JeffS7444]

At the moment finding a safe haven for your savings where you can keep up with inflation is impossible. Maybe the thread should be renamed ‘How to cut your losses,’

I've heard it said that beyond a certain base level of prosperity to cover the essentials of living, plus some luxuries, much of a person's perception of how wealthy they are is based on comparison with how well other people seem to be doing. So like the old joke about two guys being pursued by a lion, maybe the trick is not to beat inflation, but simply to do less-badly than everyone else

 

[Chromatischism]

With the current inflation into what would you get out to.

For investments, commodities tend to do best during inflationary periods. And value over growth.

But even "growth" stocks of the biggest companies like Microsoft, Apple, Amazon, and Google should do well from here. Large caps over small.

And ironically, cash is still a safe bet until you step back in. Remember, "inflation" figures are YoY not MoM.

The best I can do now is study what happened to better learn what to do in the future. Based on the last 6 months, I would have sold in November and just waited in cash to see what happens. I wouldn't have been able to predict the future, especially not the war.

 

[JeffS7444]

Thanks to the person who recommended Charles Mackay's Extraordinary Popular Delusions and the Madness of Crowds earlier in the thread; if one skips most of the section on alchemy, it's a pretty short and sweet read. I imagine that many people who got caught up in the various crazes were no less intelligent than we are today. And maybe we'd appear to be the slow-witted ones, unable to do simple arithmetic or find our way around without consulting our apps and devices!

At least for me in the USA, the section on alchemy seemed moderately interesting but not worthy of such lengthy coverage. But I suppose the search for the Philosopher's Stone did not capture the public's imagination in this country as it did elsewhere. And maybe as a result, Jo Rowling's first novel is titled Harry Potter and the Sorcerer's Stone in these parts.

 

[JeffS7444]

What's everyone's mood like as of early October, 2022?

Me: Ugh, no great joy at seeing what I've "lost" (unrealized!) this year. But I'm still a lot better off today than I was at the start of 2020, when I suddenly had time on my hands and tidied-up my investments.

Ever wondered about how you would have made out if you hadn't sold a certain stock? Me neither. But yesterday I got curious about the nVidia Corp stock I owned in the late 1990s! This was in the midst of the tech boom / IPO-mania years. My token participation in the madness was to put 1000 USD into NVDA, simply because I liked nVidia Graphics Processing Units (GPUs). For awhile, not much happened, then the stock became part of the NASDAQ composite index, and within 18 months, value had soared 10x, and I was nervous, so I cashed out. Not too shabby, right? (cough) Turns out that over the years, stock splits would have increased my shares 48-fold from 3,000 to 144,000, and had I cashed out by early November, 2021, I might have brought in more than 40M USD, plus dividends reinvested - whew! But of course from my perspective in the early 2000s, this was unknowable, and much of the soaring value in recent years was tied to the rise of cryptocurrencies - nVidia's GPUs were the de facto standard for Bitcoin mining. But at the moment, the trend in crypto is away from Proof-of-Work, else crypto market values make crypto mining uneconomical, and suddenly, GPUs are no longer such a hot commodity, and in the span of just under 1 year, I might have seen my $40M fall by 50%.

Still, I gotta wonder how my life would have changed by having an extra 10, 20 or $40M tacked onto my net worth, and whether coming into serious money a lot earlier in life might've made me insufferable