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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
Just the same as taking margin in any other situation. But as I said the price would have to be low enough for me to take on that extra risk, which is unlikely.
StealthP3D
Well-Known Member
When I was a young investor, I naturally assumed military aggression would be disastrous for the value of my shares. But the market kept surprising me. It seems markets like military action. Even if the initial reaction is negative, it almost always rallies hard in short order. Often it skips the initial negative reaction altogether.
I don't like it but it is what it is.
That said, I think the market response might be different if the aggression had a high likelihood of turning into something more substantial than, say, the war with Iraq.
Found this article is last weekends financial times insightful on possible March madness
StealthP3D
Well-Known Member
The most painful declines for an investor are the long, slow gradual ones. A little bit down for 6 or 8 days for every one or two days up. Month after month. A slow bleed. You don't want to sell any of your stocks because they are good companies and prices are too low to sell but they keep going lower, day after day. You get a small rally or two and think it's over but then they turn around and go lower yet.
I think the person who invented waterboarding was trying to design a torture worse than this. I've never been waterboarded so I'm not sure if they were successful or not.
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8 people marked this funny. Funny how? You don’t believe there will be market crash? My opinion is that this is not nice conversation culture.I fear that crash is coming. I’m approximately 30% cash (about 50% in public stocks and 20% in not publicly traded).
Of course my guess is as good as anyone’s
I have made mental line where I will sell all public stocks (it is if my portfolio drops 10% from the current value). Of course it may lead to selling at the bottom.
But considering that at bear markets stocks drop 20-50% it may be wise.
A Brief History of Bear Markets
Of course it is only possible to know afterwards
I heard it's projected to be signed into law the second week of March which seems to fit your timing.
It was a minor retaliation so it's not likely to escalate at all.When I was a young investor, I naturally assumed military aggression would be disastrous for the value of my shares. But the market kept surprising me. It seems markets like military action. Even if the initial reaction is negative, it almost always rallies hard in short order. Often it skips the initial negative reaction altogether.
I don't like it but it is what it is.
That said, I think the market response might be different if the aggression had a high likelihood of turning into something more substantial than, say, the war with Iraq.
I didn't vote your post as 'funny' but I think your post came off as a bit dramatic to some.
Many (most?) of us are long term investors. We believe that the value of the company will be many times greater than today 5-10 years from now. What happened today, what happens tomorrow or next month, will not matter in the long run. Folks were saying the same thing last March. Was it painful? Sure. But look where we are a year later. If the market crashes, the market crashes. As long as you don't have to cash out at the market bottom, what does it matter? There have been many market crashes, but the market always comes back. And it comes back ever stronger for the best companies, of which I think we all agree Tesla is one (if not THE one).
Now if you are trying to time the market, get out before the market crashes and then buy back in at the bottom, that's a different story, and I can understand your anxiety. I wish you and all who are playing this game the best of luck. But I know I'm not smart/good enough to be able to pull that off. So I will be happy with taking advantage of drops to add to my stockpile of shares, knowing that it's going to worth a in 5-10 years.
Confusion Part Deux
So yesterday I was a bit perplexed by some expert commentary on current market dynamics. But today, thanks to penetrating journalism from Reuters and Bloomberg, I find the dynamics are as clear as raw sewage.
Wall Street ends sharply lower, tech selloff weighs as bond yields climb
...The Treasury note yield rose above S&P 500 dividend yield, wiping out the stock market yield's strong advantage.
"Rates matter. At 1.5%, the yield is comparable to S&P 500 dividend yield," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. "And there's no capital risk with a 10-year, you'll get your principal back. All of a sudden it's competitive with stocks,"
"Rates matter. At 1.5%, the yield is comparable to S&P 500 dividend yield," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. "And there's no capital risk with a 10-year, you'll get your principal back. All of a sudden it's competitive with stocks,"
I see. So this market professional claims investors buy the S&P500 for the dividends only? And you'll get your capital back from 10-year bonds... except for that pesky inflation that rising bond yields are a sign of?
Bloomberg has much the same story...
Treasury Yields Surge Past 1.6%, Sounding Alarm for Risk Assets
...and they helpfully include a chart of this mighty bond-yield surge, which is certainly tempting until you notice that the numbers are negative because they're adjusted for inflation. Look out TSLA!
So let me get this straight. Investors are dumping stocks, especially high-yielding techs, because negative-yielding bonds are crawling upward toward zero because nobody wants them. Investors are dumping stocks because they are dumping bonds. Where is their money going if they're worried about inflation? Beanie Baby futures?
I inputted all this data into the Thinkomatic 9000, my personal AI (Addled Intelligence), and generated the following conclusions:
1) Many market professionals don't understand what @StealthP3D has taught here: Great growth stocks like TSLA can keep rising much longer and farther than you imagine if you "lock in gains" by locking out further gains. And these professionals don't understand what Professor Cathie teaches nonstop: Great growth companies like Tesla are disrupting the world, which will never be the same as when "value" stocks flourished.
2) Some market professionals profit from big volatility, so we get big volatility... along with a smokescreen of utter nonsense explanations pretending that the price swings are rational.
Either way, I will thank Jesus, Mary and Allah if I get another buying opportunity like last March: a 50% drop from the high right before Tesla unleashes a megaton of progress. I've ridden this bronco before, and it don't scare me. Bring it on.
This sounds like a net present value calculation that one would do to choose which internal project to invest in...
Thank you.
Thank you. Your answer was helpful. I understand that point of view.
I’ve experienced dot.com bubble and finance crisis and in both of those I didn’t sell and eventually market and my investment recovered.
Of course market eventually always recovers. Sometimes it takes 2 months (covid) sometimes 30 years (1929).
I don’t know when is the right time to sell. If I knew I would be the richest person on earth.
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StealthP3D
Well-Known Member
This^. The financial/investment professionals profit from fear and volatility. Because if they can't instill fear then they can't swoop in and buy cheap when everyone is selling. If no one has below average returns then no one can have above average returns. Think about that!
It's much easier for an investor to achieve above average returns by selecting the companies most likely to grow at the fastest rate (and holding them through the market fluctuations) then it is to try to time the market fluctuations. That's why the old adage "Time in the market beats trying to time the market" rings so true.
Market professionals tend to not be very good at market timing either but the big brokerage houses make a killing from market volatility through numerous mechanisms (mostly related to being the market makers). Low trading volume is not good for profits. Volatility and fear stokes volume.
More buying, 50 here, 100 there, every day it seems. Excuse me, sir, but is this yours?
I suspect, dear boy, it's because you've been posting about an impending crash/bubble bursting almost non-stop for the last few years
Doesn't seem so bad, eh?
I used to think the bond market was supposed to be the stock market's placid, boring, rational cousin.
I guess in this world no such place exists.
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