I hope this helps you on your way.
If you want to get rich, build a business or learn a skill no one else wants to do and put 10-30 years of your life into it. That is how most rich people become rich (plus a bunch of other factors that you can do DD on).
EDIT: If you're interested in learning how the majority of the rich become rich, read Dr. Thomas J. Stanley's "The Millionaire Next Door" and "The Millionaire Mind".
yeah I read that it was over $93k. What a brilliant way to get $$ if you can hack Elon and safely get away with it.
edit: also if they lowered the price on Elon's from $1k to like $100 I bet they would've made a lot more. $57.4k was the peak I saw the account at. Now at $49k so assuming hackers are moving BTC now.
edit 2: NVM they are hacking a LOT more accounts. Uber and Kanye just got hit. Account up to $90k
I backtested this strategy using excel with data acquired from Yahoo Finance. Using only closing prices from January 1 1950 until today using 252 trading days (1 year) as the moving average.
1 dollar investments to start turns into 105.7636 using your strategy while a buy&hold yields 104.8761. An annualized return difference of roughly a hundredth of a percent. However, to use this strategy over the past ~64 years you would have had to buy sell your shares 156 times and repurchase them 156 times. Accounting for transaction costs quickly puts buy&hold ahead.
What your strategy is is a very basic trading algorithm. The problem with that is if anyone saw that this algorithm made money then the HFT would already be doing it until it was priced into the market and was therefore unprofitable. A question: do you really think beating the market is THIS simple? People much smarter than anyone on this website - with decades of finance experience -people who actually get PAID to do this for a living have been fighting to beat the market for decades. Do you really think they wouldn't have thought of this first?
Edited to add: A thoughtful blog take on the situation that I think Tesla bulls will probably find appealing in some regards/realistic in others (fairly lengthy discussion of Solar City's problems and how that situation may relate to Musk's current desire to take Tesla private): https://lt3000.blogspot.com/2018/08/is-elon-musks-attempted-tesla.html
It's generally a red flag when a CEO is absolutely obsessed with short sellers, as Elon is. You are not wrong: if the company can deliver results, then there shouldn't be anything ultimately to worry about.
Tesla is one of the most shorted (if not the most) shorted stock in the market. They're there for a reason and Elon has been unable to address the issues they have with the company, but also: his actions have fed their case on multiple occasions. I mean, look at what he just did: this "funding secured" tweet where it is now apparent that funding wasn't secured. If this whole tweet was all about creating a short squeeze, the short squeeze lasted a day and if this whole plan wasn't real, shorts are going to redouble their efforts (if they haven't already.)
And really, his attempt to take the company private because of "short seller propaganda" (which is one of the reasons he stated in the letter post "funding secured" tweet) - well, if you can deliver results and show shorts, then why flee the public market?
Elon has also used the short sellers to sell a story to his fanbase. Tesla short Jim Chanos said the other week: 'Musk vs The Shorts' is a far better narrative than 'Tesla vs Mercedes/Audi/Porsche,'" and I don't disagree with that.
As for a heavily shorted company that handled shorts, look the short squeeze that RH created. https://www.fool.com/investing/2018/07/17/whats-behind-rhs-450-run.aspx
To assume that this would be a self-cannibalizing move would be assuming Elon Musk has no bigger-picture in mind. Elon Musk realizes to create a revolutionary electric car would cause the currently-incredibly-saturated-and-competitive market of "vehicles" to jump on board and run him out of business.
This is a long-hold. Traditional traders / analysts will say overvalue, even based on tomorrow's numbers. We'll see. It could crash tomorrow, but it will not die. Every tech company conglomerate around today was deemed overvalued for year. In ten years, Tesla's primary metric will no longer be # of vehicles sold.
Some great reads which helped me understand the unorthodox methods of public-tech-companies: How Google Works (Schmidt), The Everything Store, Zero to One, and (despite it being circlejerk material) Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future
Almost all tech-business books echo the sentiment: One of the major factors you have to consider when investing in technological platforms is "forget the last quarter" and "forget the next quarter" -- invest in the technology you believe will continue to grow and change the world.
Costco's a great company, treats people well, offers a fun/novel experience where - for better or worse - product selection changes fairly often.
That said: ultimately Costco wasn't really for me after a while; prices aren't always the best and I didn't need to be buying the amount I was buying. That doesn't mean it isn't a good company, but I do think that it serves some people extremely well and isn't quite as useful for others.
The stock has always seemed fundamentally rather expensive to me, but I think people do value the company's quality and consistency over the years. However, when it's valued the way it is and they miss, it's a fairly decent decline when something doesn't deliver.
I definitely don't think Costco is going anywhere, but I do see Amazon Prime eating into some of Costco's business. Costco has admitted that they are not Amazon proof. (http://seekingalpha.com/article/4009628-costco-amazon-proof). Costco has never seemed very concerned about technology in any regard - the website isn't great and it wasn't that long ago that they moved from that coupon book to an app.
As for the fee increase, it's not really surprising. Costco has extremely thin margins; the membership is where the money is at. They also want/rely on people buying things aside from just coming in there for paper goods and some groceries.
Sorry to burst OP's bubble but they had a 500/1 reverse split in June. Read more here Link
For OP: if you had 10,000 shares - you now have 20 shares at the new price
Give yourself a good knowledge base by reading 3 to 4 well known and respected books about investing. I'd suggest The Intelligent Investor, A Random Walk Down Wall Street, and Common Stocks and Uncommon Profits. Go with the latest editions of each.
If you are shooting for a degree in the field, I would first suggest looking up if your university's finance department has a suggest reading list. Read those books to get ahead with your curriculum. In lieu of that, look online for reading lists suggested by prominent investors from different areas of the market (I.e. - Buffet on Value Investing, Soros on Hedge Funds, etc.) You can also find reading lists from some Ivy League schools with a bit of searching.
I think a good mix of topics to start you out are the following:
"The Richest Man in Babylon" by George Clayton
"The Intelligent Investor" by Benjamin Graham
"Security Analysis" by Benjamin Graham
"A Random Walk Down Wall Street" by Burton Malkiel
"The Alchemy of Finance" by George Soros
"Competitive Strategy" by Michael Porter
"Manias, Panics, and Crashes: A History of Financial Crises" by Charles Kindleberger
(*get the 2011 edition revised by Robert Aliber)
Investopedia is also a good resource for basic information like definitions and layman explanations.
I'd also recommend reading up on some classics in economics if you're not intimately familiar with the field.
Continue reading the financial news daily. Nothing will teach you how to recognize patterns in the market better than seeing them as they develop. Remember that no one had a crystal ball, but a few people have developed some decent working models.
DO NOT play with your savings until you actually have done your research. Just like any other skill or sport, this takes practice. Most people who enter the market without solid education on the topic loose quickly.
Finally, good luck. Remember to foster your creative side and learn about other topics outside of finance. You'll be surprised how much these "unrelated" topics will help you connect the dots, so to speak.
The book was written about 70 years ago. Anybody that recommends this book to appear smart should have to read it ten times as punishment for the disservice they do to new investors. At the very least, I wish Warren Buffett would have the honesty to admit that he did not get rich following the wisdom inside The Intelligent Investor.
If you want to know how Buffett made his fortune, read "Buffettology" by Mary Buffett. I'm fairly certain that when this family insider spilled the beans about how Buffett really invests he was feeling betrayed.
The best podcast you’ll find on economics is not a podcast. It’s a recorded lecture by Professors timothy taylor done through the Great Courses. You can get it on Audible for $15, and it will probably change your entire perception on the field of economics.
Read these four books as a fundamental start on how to invest.
The Intelligent Investor by Graham
Common Stocks and Uncommon Profits by Fisher
Why Stocks Go Up and Down by Pike
Buffetology by Buffet and Clark
These are a great foundation to help you learn how to analyse what to invest in and why. After that invest frugally and learn as much as you can about fundamental investing.
You'll also need to either set up an account with you're bank so you can manage your own investments. That or you can use an online broker and there's a lot out there. I'm not sure what's good in the states but Questrade is pretty great if you're Canadian.
All that being said this is kind of setting you on the path of an active investor and if you just want to put your money in something like an RRSP and watch it grow I'm probably not the guy to talk to.
The cloud storage industry could see some big changes over the next 10 years. Newcomers like Storj & Sia promise to utilize decentralized storage at a fraction of the cost.
I guess it's time to transition to specific hosted instances of gitlab.
Anyone else find it ironic that Linus just made someone a couple of billion dollars via Microsoft?
Most millionaires and up attain their wealth through their own hard work.
They work doing dull, normal jobs, but they do them on their own terms. They are usually entrepreneurs who start out on own businesses at some point.
They are almost always living well below their means. They don't buy new cars, or own fancy suits or live in the Upper East Side.
Pretty much it comes down to these two simple facts.
If you want to go from nothing to wealthy, you must:
1) Do something that pays fairly well, preferably as a business owner or contractor.
2) Live as though you weren't paid well at all. No one ever got rich by spending money on gadgets and status symbols.
Surprisingly, using my friends as an example, #1 is much easier than #2.
None of us make fantastic money, but we all make far more than we need. My friends are always broke while I am always afraid of becoming broke and, as such, save. I save compulsively. I dump no less than $175/wk into various savings and investment instruments NOT including the 10% of my pay I defer to my 401(k). I'm not a millionaire, but I'm doing quite well for a 31 year old single male.
Im pretty sure all of my friends have extensive credit card debt and negative net worth.
1) Open a Roth IRA and put my $5k in that. Invest in VTI.
3) Save 50% of my take-home pay
4) You should do a lot of reading about active versus passive investing before you start trying to pick individual stocks. When I see a high schooler say he's going to make a career of day trading....I'm sorry but I roll my eyes involuntarily. Most active fund managers lose to passive index funds. For a good starter book, read A Random Walk Down Wall Street by Malkiel. One thing I wish I had done earlier is get a WSJ subscription. They're expensive but worth it. Subscribe to the 10-point newsletter and read that every day. The NYT has a daily newsletter as well. And Matt Levine's blog on Bloomberg is fantastic and entertaining.
I'd suggest buying him some books. He can learn about finance from experts that way, and also learn to teach himself by reading, which is an extremely valuable skill in and of itself. The Millionaire Next Door, The Intelligent Investor would be solid ones he could start with and easily get through. I'm sure with a bit of searching you'd find many other great suggestions.
Not really at 40 but... a bit later (before 50).
There was not 1 thing, but a combination of things:
I do not see it as luck. Extreme value investors wait for the market to misprice stocks and they swoop in. There is a LOT of studying and patience until you find something that the works for you.
To put it in perspective, in Phil Towns book Rule 1, he had a valid point. When the markets crashed in 08, Chipotle crashed down to $50 a share. The economy didnt collapse because of a great burrito shortage, it was still pumping out cash, had great ROE and so on. That is the point to load up.
Buffet calls this buying $10 bills for $5.
Im 30 myself, and heavily considering going down that path for retirement once i finish paying off my debt mid 2018.
Rule 1 by Phil Town and
The Intelligent Investor
First of all, congrats on your gains. But I would say that this is a "picking up pennies in front of steamrollers" strategy.
Charles DeMuth had a great article on XIV over at SeekingAlpha:
I almost bought in, but I realized that the risk of going to 0 on any given day is too high. I wonder, what would XIV have done on September 11th, or in 2008?
He also gets over $500M a year in dividends from his Coca Cola holdings... With the amount of money Berkshire Hathaway has invested in KO, there's just no better place to put it. He'd have to find something else to do with the $16B worth of KO shares and be able to make up the capital gains. He'd also trigger a huge sell-off and wouldn't get anywhere near the $16B it's currently worth.
So is it worth divesting his $16B worth of KO to get maybe $8B worth of cash to invest in something else? Hell no.
All depends on your style of learning.
Hope this helps.
>im trying to find the best way to guarantee a good financial future
not exactly an investing book, but Stop Acting Rich by Thomas Stanley is the best overall financial book I've ever read. he was a finance professor, and found that people who are actually rich (lots of investments/money in the bank) do not live a fancy, high-end lifestyle. in fact, people who live fancy, extravagant lifestyles tend to be broke or skint -- they might have a high income, but low savings. all their income goes into expensive cars, shoes, clothes, etc. they don't have a lot to save and invest.
Robinhood is (at least partially) self-clearing!
I think you're incorrectly assessing the value of Amazon's infrastructure. In 2015, Piper Jaffery estimated Amazon had fulfillment centers within 20 miles of 31% of the US population. In 2016, that estimate grew to 44%. So their fulfillment network is already vast and if this is the challenge you think they face, I'd say they're winning.
I also disagree with your judgement that Walmart is spending more wisely given their recent $3.3 billion acquisition that smacks of "We don't know how do win online! Please help us! Here, have truckloads of money!"
Walmart has a low PE because, right now, they deserve it. They're not going broke any time soon, but they do need to sort themselves out if they are going to fend off the death machine that is Amazon.
Edit there -> their.
I'm starting to fear that nothing is keeping this from moving sub $40 and possibly into the mid to lower $30's - there's a significant glut of supply - and any idea of a turnaround is just being pushed further and further out. If oil goes sub $40 for a considerable period, you're going to see way more distress in the energy sector.
Honestly, I've just gone with CME (which has a delightful dividend policy) and ICE (which has done very well) and betting on the financial/commodities casinos instead, with much more focus on ICE than CME. I'm not going to be investing in oil production companies going forward. Pipelines and infrastructure companies yes, but probably no more than I already have and will probably not add further to what I have.
I have to say I'm increasingly of this philosophy:
Come on, man:
43" TV vs 43" TV and they have similar top reviews.
When you find, say, a thousand examples of Amazon-branded products having a higher "top reviews" compared to their "expected number of top reviews" based on overall star rating compared to multiple competitors, come back and repost your findings.
Or read Benjamin Graham's "The Intelligent Investor". The whole book boils down to two options:
Most people would be better off with the first option, but if you're going to invest it yourself, the book gives you a really good feel for how "real" investing works, which should be enough to scare you into just opting for index funds.
Seth Klarman - Margin of Safety
Jason Zweig - Your Money And You
Philip A Fisher - Common Stocks and Uncommon Profits
George Clason - The richest Man in Babylon
Joel Greenblatt - The little book that beats the market / You too can be a stock market genius
Burton G. Malkiel - A random Walk down Wall street.
Alice Schroder - The Snowball
Charlie Munger - The Complete Investor
Howard Marks The Most Important Thing.
And ofcourse - The intelligent Investor
Visa had an investment in Square very early on, around 5 years ago. I'm guessing this is a reveal of the existing investment now that Square is public, but it becomes whether Visa has added since the early investment and perhaps they have as the stock has gone down since IPO.
Edited to add: as I thought was probably the case, this is just Visa now having to disclose the stake it purchased years ago. (http://seekingalpha.com/news/3106116-square-strongly-visa-disclosure-stake-stems-2011-investment. "Of note: Visa only has a 9.99% stake in Square's Class A shares. Its total stake in the company is estimated to be around 1.1%.") Again, wouldn't be buying Square because of this, although a lot of the financial media is acting like this is a big thing and that Visa recently bought. Visa did not recently buy, this is just Visa filing the investment it made years ago.
Visa also famously had an investment in a UK company called Monitise. Monitise also attracted the likes of famed hedge fund manager Leon Cooperman, Doug Kass (Kass: http://www.thestreet.com/story/13019858/1/doug-kass-analyzes-a-failed-trade-a-requiem-for-monitise.html), large banks, Mastercard, Visa Europe and others. Visa even installed a Visa executive as a co-CEO of Monitise. Visa then sold their investment believing that it could do things in-house instead. Monitise then proceeded to go down 97% or so since. Visa left and that was it.
I'm not saying that's going to happen here, but I will say that I'd much rather suggest investing in Visa (which will get you some exposure to Square, plus a dividend) than Square.
A Beginner's Guide to Investing: How to Grow Your Money the Smart and Easy Way https://www.amazon.com/dp/B005Y4JS0A/ref=cm_sw_r_cp_apa_DKYbAbADEP42Q
This little book was a great read that covered almost all the basics and doesn't make any assumptions about what you already know. It's like taking an introductory course.
"The Intelligent Investor" will probably come up, but it's a substantially more advanced book and it's very dense. It's worth reading, but it could be overwhelming without a primer first.
"Limits to Growth" is very much a product of its time. Back then, it was unimaginable that we could continue to extract at the same rate that we can consume.
That book also came from a rather unique group of environmentalists who advocated that humans were consuming far more resources than what the planet could produce. This includes oil, food, water, and protected wildlife habitats. For the most part they are correct - this is a very unsustainable way of building a modern civilization.
What nobody expected was the rapid development of new technology that can counteract the consumption. In this era better oil extraction method, natural gas fracking, renewable energy, fertilizer, genetically modified food, and water resource management all emerged. The reason why there's 7.5 billion people today is because we can produce more resources to feed them. Some scientists estimate that half of the nitrogen in your body comes from man-made fertilizer. While the price of oil may fluctuate day to day, the world effectively have an infinite supply of it thanks to all of these new technologies.
It's very difficult to bet on when a new technology will change the game, but it happens all the time. For example, I work with electric vehicles as a technical consultant. We help companies figure out how to be use these newfangle vehicles and develop the business and operation case. A big incentive for them is that electricity is dirt cheap compared to diesel, but we're concern that once EVs become the norm we'll be back to competing with fossil fuel again because the lack of demand will drop the price to a dollar or less per gallon.
I highly recommend checking out a new book that dive into this issue - The Wizard and the Prophet. For a sneak preview, check out the Freakonomic podcast interview
The Buffett worship is a little absurd at times and ignores some of the double-speak. Buffett has often bashed gold ("Buy stocks, America is always going to be wonderful forever and ever and ever" as he always says when on CNBC.)
No one brings up the idea that he tried to corner the silver market not that long ago.
"I repeat: There is substantial evidence that Warren Buffett cornered the silver market. Cornered, as in manipulated. Yes, Saint Warren was almost certainly a manipulator.
The story in a broad outline. Beginning on 25 July, 1997, Buffett began to accumulate large quantities of silver via Phibro, a subsidiary of Salomon Brothers, an investment bank in which Buffett had a big stake, and which he had saved from extinction when Salomon traders cornered the Two Year Treasury note market in 1991. He eventually acquired nearly 130 million ounces of silver.
He stood for big deliveries in February, 1998. The market went nuts. All of the inidicia of a corner were present. Nearby prices skyrocketed relative to prices for delivery in the spring."
Buffett bashes gold to the public and would also buy the fucking shit out of it if he thought it would benefit himself and/or Berkshire shareholders.
Buffett is an enormous example of "watch what I do not what I say."
I've never done this for TSLA. I'll do it now:
G Finance: what stands out are $27.5 bn market cap, -$6.90 EPS. I extended the chart to 10 years, WOW the stock exploded in value in mid-2013.
Financials: quarterly income statement doesn't tell a clear picture, going yearly. Now i see the reason for the share price explosion, revenue exploded in 2013. Rate of growth has slowed down a lot since. Still growing pretty fast. Losses are accelerating rapidly, I'd like to see the opposite.
Balance sheet looks neither bad, nor good. It's about a wash on cash/investments to debt.
Back to Summary: they are valued at about 6:1 on revenue. If they were turning a 10% profit, that would be a PE of about 60:1. That's not all that crazy for a fast growing tech company.
Not ready to dismiss this one. Digging deeper:
On SeekingAlpha, this article catches my eye. He links to this article which also looks interesting.
After reading both of these articles, it seems some important levers that move this stock are things that are out of my comfort zone technically. I know dick about batteries and all of this stuff they are talking about.
I'm going to assume a lot of other important levers are the same. For that reason, I'm stopping here. I need to be able to deeply understand a business and their products to invest in it.
I'm a professional equities/options trader at a large trading house. Everyone in the industry has read the book below. Read that and also investopedia is a great start. Follow IG for trading tips and BE VERY CAREFUL. When you first start, only BUY calls/puts. You don't want to sell contracts when you start...unlimited downside
Link: Options, Futures, and Other Derivatives https://www.amazon.com/dp/0132164949/ref=cm_sw_r_cp_api_nEbUAb081KA5S
> Net income (loss) (GAAP) $ (30,502 )
> Net income (loss) (Non-GAAP) $ 26,284
Their "non-GAAP" net income is due to "Stock-based compensation expense" of $19 million and "Early extinguishment of DoE loans" $16 million.
They are spending $50 to $55 million on R&D a quarter, which is discretionary and means their negative GAAP net income is not so much of a big deal. Sales have gone down from $555 million to $400 million but gross profit was largely unaffected as cost of sales relative to sales decreased.
Tesla expects 20000 sales of the Model S this year and 30000 next year, the Model X has been postponed, an optimistic estimate for their GAAP net income 2013 might be $50 million, maybe 50% higher for 2014, if we try to depreciate their R&D expenses this might rise to $80-$100 million, if we ignore them we might get an estimate as high as $200 million.
Their market cap is $15.5 billion so even at the unrealistically high estimate of $200 million their p/e would be 77.5, 4 times higher if you believe my optimistic estimate.
Don't get me wrong, Tesla is a growing company and electric cars are the next big thing. Nothing is going to stop you drawing your own conclusions.
I'm just leaving this here.
I'm not sure if Tim Cook is a reliable source, but he is the CEO of Apple so I assume he knows what he's talking about.
> Apple Inc. has bought $14 billion of its own shares in the two weeks since reporting financial results that disappointed Wall Street, Chief Executive Tim Cook said in an interview.
Edit: What do I think? It's part of the buyback plan announced last year. The buyback itself isn't news, the timing of it is, and it already happened. So there's really nothing to react to.
I went to a very interesting talk by Arun Sundararajan (I believe he's a professor at Stern) who mentions that the gig economy isn't just a temporary malfunction in capitalism but a fundamental shift in the way our labor market needs to move due to the ability for mass scale technology to change how we organize work that previously couldn't be aligned globally. This shift to the gig economy, Arun argues, shouldn't be fought against. Instead, we should promote it, while fighting for laws that protect gig workers much as we did for full time workers. Here's a book he wrote that I think is worth either reading, or at least getting the brief of from his other talks and opinion pieces.
Meh. From a speculative standpoint it may be fun to watch Uber/Lyft jump up and down whenever a region/state decides to shit out a new bill. Long term the valuation can only be justified in their self driving efforts and market domination. Short of an entire country forcing their labor costs to double, this stuff doesn't matter much more than creating a slightly more laughable pnl next year. We all know the valuation isn't coming from the 10Ks and 10Qs.
You can get a much better insight into how America's upper class behave through 'The Millionaire Next Door: The Surprising Secrets of America's Wealthy', or 'The New Elite: Inside the Minds of the Truly Wealthy'.
You're missing the fact that the mining reward decreases over time. By the time 7 months rolls around, your 4.73TH/s won't be mining as much as it would now. There's also the fact that peercoin's exchange rate has been going down steadily for the past two years.
I don't understand how this could be interpreted as a good investment.
Edit: Also check out https://bitcoin.stackexchange.com/questions/16986/mining-hardware-lifespan-is-less-than-a-year. Any investment returns from mining comes from an increase in the coin price, not profit from mining itself. Your mining rig will be obsolete in under a year and there's very little chance you'll actually break even.
A few others.....
All of Warren Buffet's Letters to Shareholders. There is a book with all of them and it's cheap.
A Random Walk Down Wall Street
The little blue book that beats the market
I don't put much stock (heh) in the DOW ever since listening to this podcast episode
The DOW doesn't really use a consistent or scientific method for evaluating the economy. For example, it doesn't adjust for inflation and periodically removes under-performing companies in favor of more successful ones. With that kind of deliberate survivorship bias, its pretty much inevitable that the DOW will trend upwards, regardless of what happens to the rest of the global economy outside those select 80 companies. Is this list of best performing companies performing well? Yes, that is why they are on the list of best performing companies. You can see that the logic is a bit circular and largely irrelevant to people asking questions about the economy in general
Elon Musk agrees in principle. /u/evolutionaryflow posted this yesterday:
Although Musk cannot explicitly come out and state as much, he beats around the bush pretty aggressively and does a great deal of stuttering and stalling while he carefully picks his words.
EDIT: Thanks for the overly-generous gift of gold. This is not a deserving post. I thought I would pass it on to /u/evolutionaryflow as penance and I see that he's also been gilded. Thanks Daddy Warbucks.
If you want to be 100% sure that there's no digital trace of your private key, you could:
But honestly for most people that's probably overkill.
Seeking Alpha is not a carefully curated magazine. Anyone can publish on Seeking Alpha. There's an approval process on articles, but (as I'm sure you've noticed) it's not terribly strict. They also have a reasonably nice reward scheme that incentivizes bloggers to publish there. The outcome of this? Great variance among the quality of blog posts.
Why does Seeking Alpha not curate their content more carefully? Because they make money from ads, and more articles = more search results linking back to SA = more page impressions = more ad revenue. Beyond that, there's a honeymoon effect to news articles: people will keep coming back to a site even if only 1 in 10 articles is good. (Hello, Reddit!) The bad ones you stop reading after a few seconds, the good ones you're impressed by for minutes. You keep coming back in the hopes of occasionally reading a worthwhile article.
Consequently, the editors of the site can allow plenty of low-quality articles -- these articles earn them ad revenue from page impressions, but don't discourage readers from leaving the site permanently.
The Intelligent Investor has a 2009 edition which has commentary (both as side notes with a chapter and after every chapter) from Jason Zweig relating Grahams lessons to the modern day. I found the it to be a really good read. I wish there was a version of Security Analysis that did the same thing.
One interesting point about Berkshire Hathaway that I read in the book "The Four Pillars of Investing" is that when Buffett buys into a company, he provides guidance on how the company should proceed, sometimes as a director.
I think one major factor in his success is not only that he pays close attention to fundamentals, but also that he has the ability to positively influence the direction of his companies in a way that none of us could.
It's structured as a partnership so it doesn't have to pay corporate taxes. The tradeoff is it has to pass all income directly through to shareholders, and they have to deal with the taxes. They are a large and reputable company though, the largest alternative investment firm in the world, with $434 billion AUM.
This is the best answer to all of these dumb /r/investing posts.
JUST FYI. The CBOE volatility index aka the VIX gives an actual, probabilistic measurement of what people think will happen 30 days from now. It tracks the s and p. Same same.
Ok, take a look at the may 130's for the DIA etf here. On friday they traded at around .50. That means some people are willing buy a 7% correction in the market. Not that crazy.
EDIT 2: sorry i keep thinking about this. If the price of the option is 50 cents and thats a 13 point move, for it to be an expected value of 1 the probability that the market thinks DOW will go to 13000 is 1/26 which is about 3.8% chance.
There you have it. There is a 3.8% the dow will close at 13000 in may.
An absolute must read is: The Intelligent Investor by Benjamin Graham, who was Warren Buffet's Mentor.
You will Learn the basics of value investing and the important differences between investing, trading and speculation.
The Millionaire Next Door covers this. It's about how you teach your children about money. Children who belong to the self made millionaire often have easier times than trust fund babies (who oftentimes suffer from subsidies via trust) but it's all on your philosophy as a parent and what you deem important enough to pass on to your children.
Both of my little girls know the value of a dollar that's for sure.
This post reminds me an article I just read a couple days ago:
>a careful study of the Forbes 400 list provides a reality check on the dreams of avarice that motivate many investors. With few, if any, exceptions, the billionaires on the list didn’t make it by engaging in some particularly shrewd trading strategy on Wall Street. On the contrary, the most well-worn path on to the list is through starting a company that eventually gets bought or goes public. Another popular pathway is to be born to rich parents who leave you with a hefty inheritance.
Most millionaires are self made.
I don't know how people can still believe most wealthy people inherit.
Most millionaires are hardworking, down-to-earth people who attain their fortune by working themselves to the bone, often doing inglorious work.
In 1959, Thorp figured out how beat the house at blackjack by counting cards and published a book on his findings (Beat the Dealer). In the early 1960s, he did the same for roulette and baccarat. Thorp then moved to warrants, perfecting a method to make money of these derivatives devised by Kassouf. Also on this subject, a book was published: Beat the Market – one could argue that Thorp did not come up with the most original titles for his books.
Not long after his last book Thorp devised a theory on option pricing, similar to the Black-Scholes model. When the Black-Scholes model was about to be published, Thorp moved forward to futures contracts. He made handsome money by exploiting mispricings in these contracts.
Reading up on the techniques used to exploit such mispricings is definitely worth your time. The Myth of the Rational Market by Justin Fax touches upon it in Chapter 12 ('Beating the Market With Warren Buffet and Ed Thorp'), and there are various other books which explain it more in-depth.
This is generally false. Thinking like this is what stops a lot of people from becoming millionaires. It is a self defeating attitude.
According to Thomas J Stanley, Author of The Millionaire Next Door (among other books studying the wealthy in the US), more than 80% of millionaires are first generation millionaires. They did not receive an inheritance.
>Most of us [millionaires studied] have never felt at a disadvantage because we did not receive any inheritance. About 80 percent of us are first-generation affluent.
If you look at the Forbes 100 or 400 lists I think you will find that most of the wealthy did not inherit their wealth. Some definitely did, but most did not. Mainly, it is through private business ownership and real estate.
The ones that did inherit their wealth generally did so through a family business that they now have a hand in operating the business, like the Waltons.
My dumb ass thought you were talking about the Waterloo: BlackCherry sparkling water and I just spent time researching water stocks
> debt to the government is absolutely fucking irrelevant
Oh god this is so misguided it's terrifying.
Go read This Time Is Different
Or ask yourself why Zimbabwe couldn't currency-control itself out of financial collapse. Yes, government debt is more complex than consumer debt, and controlling the monetary supply is a powerful tool. But it's not a license to do whatever the fuck you want. Countries can and do misuse this power all the time to their own peril. The US is no different. We must manage this stuff, and right now we're not. We're doing the opposite of what we should be doing.
A few of the brokers have courses. Example: I use TD Ameritrade and they have a system where you go through courses and "earn points" to level up your investor status. They even have daily web casts to cover the US markets before they open. As far as books go, "A Random Walk Down Wall Street" is fantastic. It'll at least explain the basics of strategies you might be missing.
The Intelligent Investor sits on my bookshelf next to me; its why the majority of my equities wealth is in Vanguard index or target date funds. With that said, I do have the occasional YOLO (I've invested heavily in TSLA since they went IPO).
> I guess it depends on when you cherry pick the start and finish dates.
To add, what JP Morgan is actually selling in that chart is their 60/40 and 40/60 portfolios because it would absolutely be followed up with a conversation about risk and they would compare those asset classes to a chart showing the worst 1 year % drops, REIT and SP500 would have seen substantial declines compared to those 60/40 and 40/60.
they would probably say something like "the average investor trys to time the market and often makes emotional decisions when they should just stay invested but be invested in a way that allows them to sleep at night. Here is a portfolio that has less risk and will allow you sleep at night when the SP500 is down 40%+ and your portfolio is not..."
edit: worst 1 year declines from schwab
For people in the 60-65 age bracket, $1mm and $2mm net worth correspond to being in the 80th and 90th percentile brackets respectively. That is not the same cohort as the 2/3rds Bankrate reported as being unable to come up with $500 or $1000 for an emergency. For one thing, the Bankrate survey would include the young who generally have lower savings. Secondly, the survey was conducted one week before Christmas. I wonder whether the timing of the survey impacted the result since people do spend a lot of money around that period on gifts and travel.
If you are a retiree (or near retirement) with $1-$2mm net worth, it means you are rich. But many of those people don't feel rich. Maybe they feel unsettled due to the lack of salary income. For the first time, they are looking to draw down on their savings. Amongst their cohort - their neighbours, family, and colleagues - they are not in the 80th or 90th percentile. They don't compare themselves to the poor family in rural Kentucky.
America is rich country. 70% aren't going to end up destitute. This angst some (near) retirees have about whether $1mm or $2mm is enough is all about how to ensure they don't lose their relative position in society. It's status anxiety.
I think they talked about the 1960s bubble in A Random Walk Down Wall Street. During this bubble, because everyone loved the idea of "tech", changing your company name from "Mom's Cookies Inc." to "Mom's Cookies Technologies" would result in a huge increase in stock price.
Do not buy mutual funds with load greater than .5%. Do not buy anything with deferred or declining rear end or front end fees. Do consider a broad based, well diversified portfolio of low cost ETF's. Say 35% S&P 500, 10% BRIC, 10% China, 10% Energy, 10% REIT, 10% Small Cap, 10% short term bonds, 5% cash. Consider reading "A Random Walk Down Wall Street". It will serve you well.
I hate to sound uninformed (I am) but can you explain to a newbie investor exactly what you did and why I should be excited for you? I want to be, but I just don't know why!
(I have The Intelligent Investor and A Random Walk Down Wallstreet coming my way but until then consider me a child who knows nothing)
Amazon doesn't have cashier-less tech. They only pretend to. http://www.businessinsider.com/amazon-go-grocery-store-opening-delayed-due-to-technical-issues-2017-3
Walmart has the Scan and Go tech. And they've implemented it with heralded success into Sam's Club. And now they're rolling it out into their Walmart stores:
/u/fupduck is right, it is actually about the "everything else". Verizon owns the pipes and until now, is not a content creator. This acquisition will give them access to content and thus ad inventory. By owning access to the pipes and content, which the pipes lead to, a byproduct is the ability to learn user behaviors (data) and make these available for advertisers to utilize at a premium. Verizon can make location and mobile device behavior data available exclusively to AOL ad inventory.
That said, there is also concern that this is dangerous. Unrelated to the new advertising opportunities, by controlling both pipes and content, you're giving a lot of power to one entity to control consumption. There's some of that discussion on my post on HN here: https://news.ycombinator.com/item?id=9531425
In theory yes. They teach you in school and rumor has it that the SEC investigates anomalies in trading.
Then there's reality, whereas whistleblowers go unheard at best, or - at worst - get prosecuted. There were a few people who blew the whistle on Bernie Madoff and the SEC did nothing. Before that with the whole Mortgage clusterfuck the SEC did nothing, and... nobody was ever investigated let along prosecuted. Just one guy from CS who was a whistleblower about some mortgage related shady trades who went to jail.
Retrospective timing... take a look at this Motley Fool article on Amazon price history Man, you'd have been pulling your hair out in 2001 when the stock dropped 94%! Now consider if you'd purchased $399 of AMZN in 2001 at the low (might as well make the math look amazing) you'd now have $121,992.
Also, if AAPL had AMZN's PE, AAPL would be at $1,911 per share. Math is fun.
You pretty much have it however the rates do not get very good usually unless you are borrowing around a few million and this is usually pretty standard .
For example at schwab you can see the rates here
at 100k the rate is 4.7% what is horrible and no idea who would take that as you would be better off getting a mortgage/car loan/loan from a credit union
however at 2.5 million not its at about 1.95% what is a much better rate
Our tax rate really isn't competitive internationally, among major economies it is by far the highest. See here: https://www.npr.org/2017/08/07/541797699/fact-check-does-the-u-s-have-the-highest-corporate-tax-rate-in-the-world
Generally I don't trust 'great deals' that also spend a lot of money advertising.
My BS alarm is going off like crazy.
"I started reading everything that I could get my hands on, from classics like “The Intelligent Investor” and “Think and Grow Rich”"
"Think and Grow Rich" doesn't have anything to do with stocks, it's motivational mumbo jumbo.
"I even started watching MSNBC on a daily basis to familiarize myself with the current markets."
You mean CNBC?...
"This strategy is very scalable, so the higher my account goes, the more money I can make."
Day-trading/penny stock "strategies" are by definition not scalable.
"Pennystocking Silver – This was by far the best resource that I found for learning how to trade."
So first you talk about how you've made so much money and then talk about your best resource, which is a subscription product AND you include an AFFILIATE link to the product?!?!? AND judging from the comments, people actually believe him? No wonder day traders don't make money, they're fucking idiots.
The Intelligent Investor by Benjamin Graham (Value Investing)
Technical Analysis of the Financial Markets by John Murphy (technical analysis)
The Bible of Options Strategies: The Definitive Guide for Practical Trading Strategies by Guy Cohen (options)
Paul Wilmott Introduces Quantitative Finance by Paul Wilmott (Quantitative Finance)
Oh...and lot and lots of blogs. And always be skeptical. There's a lot of pump n dumps out there.
Alright, I'm curious now. Let's calculate their margins.
And just to refresh anyone's memory who doesn't remember their basic finance class, Profit Margin = Net Income/Revenue. So we get:
Wow, that actually came out to be perfect 1.3% growth each year for the past three years that I have data for. I'm not seeing these flattening margins. This is really steady growth.
Were you talking about their Operating margins perhaps? I'm not going to calculate those right now but from the little chart on the link you provided (I probably should have looked at this first before doing all the calculations) we can see that their operating margins flattened out at about 26% or so. But a steady operating margin at 26% is frankly phenomenal. Let's compare it to LULU's competitors:
You can see here that LULU's operating margins are much higher than their competitors who are hovering between 8%-13%. I think I really ought to do some more research on this company, their growth prospects, really gotta take a close look at their financials sometime soon.
PS: This has been a fun discussion, I gotta remember to swing by this subreddit more often.
There is a book called, "The Millionaire Next Door," that basically discusses how many low-level millionaires are made. It's a great read for the fiscally responsible or those who want to be.
I'm suprised nobody has mentioned The Intelligent Investor by Benjamin Graham.
>I only like low cost total market mutual funds. Not sure if Schwab can compete there.
Schwab has exactly that, it's SWTSX. It has the lowest fee (.03%) and the lowest minimum investment ($1) of any total market mutual funds available.
Invest in yourself to get the largest returns at your age. Buy some books and learn some life skills. You’re going to need them... Dollars and Sense by Dan Ariely is a book I wish I could have read at a young age. https://www.amazon.com/Dollars-Sense-Misthink-Money-Smarter/dp/006265120X
Sure but that doesn’t mean Tesla will be profitable. Graham really hits on this in The Intelligent Investor. If you haven’t read it I recommend doing so. It can be hard to follow at times as it was last updated in the 70s. However, the commentary was added after the dotcom bubble and is great.
Avoid any run by people who sell investments because they use the classes to get new customers, and some use odd terminology meant to confuse the students so they will become customers. That practice is called "creating a dependency" and is even taught to financial sales people.
The last 2 books are by a fund manager who actually did beat the market and are easy to understand. But he recommends index fund, just as Warren Buffet does.
The last title is recommended by futures and options traders who were specialists for some of the exchanges.
It seems many professional traders keep much of their own money in cheap total market index funds. Jim Cramer does that for his retirement fund, maybe because he doesn't believe Jim Cramer type BS that plays on CNBC all day.
Don't start with "The Intelligent Investor" as it's not an introductory book - better start with "The Bogleheads' Guide to Investing" or "A Random Walk Down Wall Street" (a great intro book) to familiarize yourself with the terms and the mechanics of investing.
Random Walk Down Wall Street
The Little Book of Common Sense Investing
Google. If you can - William Bernstein. There is a beginner pdf floating out there that's a great read.
I learned a lot from just going here and working my way through
I know very little compared to everyone else but these gave me a very good overview and foundation.
> I believe tether has some relationship with the Bitcoin blockchain which helps to verify the supply
Not really. Tether has it's own blockchain. Here you can actually learn what a blockchain is: https://www.coindesk.com/information/what-is-blockchain-technology/
> Think of it like this, Tether is the most used market in the Bitcoin trading network.
> Meaning that more USDT/BTC changes hands than almost every other market combined and almost all the new money coming into the market over the last 6 months is via Tether currencies.
Sooooo no. Use that same site.
> If Tether were to fail somehow or have its markets closed, the volume of BTC trading would plummet.
Just really no. Again, check the site.
> Tether failing at this stage would mean destabilization of almost every crypto market available, not just Bitcoin.
Nope. Tether failing would just mean tether failing and maybe a little less volume. Most crypto traders simply use Tether as a low-volatility harbor for money in the otherwise volatile space.
> A scandal like a 9-figure fraudulent margin trade being lent out(or stolen somehow) would be a big problem for cryptocurrencies in general.
No, just for whoever made Tether.
This sub really needs some resident crypto experts because you are one of a seeming army of people who think they know what they're talking about but just don't. Nice to be reminded as a long-time crypto trader that we are still early adopters.
Because it comes off the stock price, it's not free money. If you do want to chase dividends though there are several ETFs that focus on dividend paying stocks.
"Dividend aristocrats" have outperformed the market in aggregate since around 1990. However there have been periods of underperformance and focusing just on these tends to completely exclude tech, which are both too new to be included in a "dividend aristocrat" index (which requires a history of 20-25 years increasing dividends) and are less likely to pay a dividend in the first place.
If you are going to cherry pick sectors like this, investing in a broad tech index like QQQ, which has a particularly low dividend yield, would have done substantially better than focusing on dividend aristocrats, if you bought it at any stage other than right at the peak of the 2000 bubble. 1999 and you'd be well ahead. 2001 and you'd be massively ahead.
In fact there is only about a single month, around February-March 2000, which is where you would be behind the general market, if you bought QQQ in January 2000 or April 2000 you'd STILL be ahead of the S&P500. Any time other than that and you would be leagues ahead.
So while the "dividend aristocrats" have outperformed the broad market in certain periods in the past it's not clear that is going to continue in the future. (And the same goes for tech.) Past performance doesn't indicate future performance.
A leveraged bet on an extremely undervalued (and currently out of favor) company that is likely to generate significant cash in the next 5 years. It's like a 5 year call option (expires Jul 2019) with a small premium.
GM also stands to benefit significantly from low fuel prices should they persist.
You can find my analysis from several months ago here: http://seekingalpha.com/article/2526945-general-motors-a-contrarians-opportunity
If you look just at the stocks, probably Coke? https://www.fool.com/investing/2017/03/14/best-performing-stocks-of-all-time.aspx
Buying a single mine or a piece of land with oil/minerals under it was good as well.
A wharton professor did that. Here's his book. I've added an edit explaining his conclusion.
Everyone should know that investing is an extremely emotional process, and that even seasoned professionals often do a really bad job keeping their emotions in check. I work at an asset management firm and we deal directly with financial advisors; their job is often to act as a therapist and emotional counselor for their clients, and our job is often to reassure them that the sky isn't falling and that they shouldn't sell while they're down.
"Buy low, sell high", and "Just hold on and ride out the dips" sounds really easy, and if you can avoid looking at your positions every day (or even every month) you're going to have a far easier time handling the inherent volatility of the markets. Lots of people, through no fault of their own, just don't know what to expect when they see things trend downwards and they need a lot of hand-holding to ride through it.
In much the same way that a gambler can go on tilt and just start making stupid moves when their emotional response starts to outweigh their more rational parts of their brain, investors will make absolutely idiotic moves when things aren't going their way. The big key to long-term investing is to be prepared to deal with these situations without panicking.
This is a great book on the topic of behavioral finance: https://www.amazon.com/Emotional-Investor-Influence-Investment-Decisions/dp/0692531807
r/personalfinance has a decent starting guide that ties your individual financial knowledge into getting your feet wet in investments. Check the PF wiki and the prime directive in the side bar first.
Investopedia has also been an excellent resource for topics not covered in r/personalfinance and goes deeper into the business-side of investing.
People wise, follow the words of Warren Buffett. He is considered the greatest investor in history and he has been teaching countless lessons in business and investment.
Book wise, The Intelligent Investor by Benjamin Graham is the paper you need to read to get more paper.
I was curious if you were full of shit, because everything you said seemed wrong to me, as I was not aware that BP sold any assets to pay for DW and instead just wrote it against their profits for the last 3 years to build up a fund to pay for damages.
BP had 192.4B in revenues in 2010 and last year $214B
BP had total assets of $173.9B and $182B last year.
Total shareholder equity rose from $60B in 2010 to $71B last year.
I don't see a "shell" of the same company that existed before.
The legal requirement is that they have to give you nbbo.
Some brokers will do better than nbbo. They call that price improvement.
This page explains what I'm talking about
I know Bill Marler, it changed the industry.
Fun fact: McDonalds knew the proper cooking temperature to prevent Ecoli 0157 but didn’t share it with the industry and “a competitive advantage”
So McDonalds has plenty of blood on their hands.
Good book on it: https://www.amazon.com/Poisoned-Deadly-Outbreak-Changed-Americans/dp/098495435X
I’m even in it.
> he did not get rich following the wisdom inside The Intelligent Investor.
Well he did get rich following the wisdom of intelligent Investor, he was going to retire at 30. Then he met Munger who changed some of the investing rules in Buffett's philosophy.
tl;dr Zero to One by Peter Thiel is one ~~beginner~~ everybody can start with.
Zero to One by Peter Thiel is definitely a well-rounded and easy read. It's my go-to recommendation. It really opens your eyes to the differences between a great product, a great company, and a goddamn monopolized-money-machine.
It's not gospel, but it's one of my favourites.
In terms of understanding the scope and speed of tech: Kurzweil's Singularity is Near (it's a science/tech-heavy focus, little to do with investing) which discusses how the insane changes will be seen at an insanely fast time-frame (relative to what 99% of folks are expecting).
In-between the lines, you can apply it to forward-revenues from entrenched incumbents (e.g. Waymo is about to make Google an insane amount of money, despite what competition people believe is out there). (hint: there is none. )
Nanobots in your blood vessels cleaning out that nasty-ass KFC you had seems far fetched, until he demonstrates the math on why this is possible very sooner, reminds you whats out there now that most people don't know about....and that he's Google's Chief of Engineering.
How Google Works by Schmidt is a great one. It exposes their methods of thinking, and you see how they are almost directly in line with those mentioned in Zero to One. You won't learn much about investing; just an interesting read that might shed some light on why these companies require you to throw out everything that once was about investing and business to reap the real rewards of this internet-era.
Stock and bonds are a good way for the middle class to "keep up" with the wealthy. To catch up, you most likely have to provide a good or service in a new and unique way and build a successful company out of it. The vast majority of millionaires earned a lot of their income from a private business. They some of them invested in securities.
There is a good book on this by Thomas Stanley, a professor that researches wealth, called <em>The Millionaire Next Door</em>. Here is the NYT displaying the first chapter for free. It's a good read, it will tell you a great deal about how people in the United States get and stay wealthy.
If I could put my plug in here...the single best thing you can do for yourself is to learn fundamental analysis. The Edgar system from the SEC has every public company quarterly and annual filing, which is the basis for Fundamental analysis.
Read Ben Graham's "The Intelligent Investor". I would also recommend Peter Lynch's "One up on Wallstreet".
Finally, I have a tool that might be useful to you. I would like to think it embodies Ben Graham's investment principals into a easy to use stock screener, rating every public company from 0-200. You can apply for an alpha key and get access...inside you'll find simple explanations as to why companies are good or poor, as well as financials for the last 8 years (read: their profit and their assets)
Atleast have the decency to give some credit to the original author you copied this word for word from:
>>Is Exxon Mobil About To Feel The Bern?
>>Exxon Mobil was recently placed in the crosshairs of Senator Bernie Sanders.
>>The senator from Vermont is calling for a DOJ investigation into alleged fraud by Exxon's executives dating back to the 70s.
>>Investors should be concerned that an investigation could distract management for years to come and potentially result in expensive fines.
>> The cost of defending against a federal investigation will weigh down earnings, distract management and cause public outcry. In the light of a presidential campaign, the intense media attention should be taken seriously. Despite the remaining wide use of tobacco products, American tobacco companies have never recovered from the years of litigation and class action lawsuits. That industry is in a slow decline. If Bernie Sanders has his way, the same fate is imminent for Exxon Mobil.
I found some articles that compare Vanguard and Fidelity. In summary, the low fees with Vanguard make it the more appealing choice.