The Stock Market - A daily diary

Good article.  Robinhood still way too small to have that large an effect.  

I know some of the guys that have accounts on there.  It is the gambler-mindset guys.  The older guys already have large accounts at other more established places — where they are guided for retirement.  

The young guys see this as a chance to make quick hits.  The commission-free thing is kind of neat in that it attracts the same type of folks that happen to like penny stocks, options, startups, bitcoin, etc. Most are inexperienced.  But you have to learn at some point.  But I always caution them — make sure you do not sacrifice your retirement while ‘gambling’. 

The stocks the guy says they should not be buying have obvious draw for these type of ‘investors’.  I mean they are bottom stocks that have some potential and may very well be bottomed out and some have innovative potential.  But he is right — much caution is needed.  They are hoping for BIG risk and HUGE returns. 

Key point — the pullbacks.  Add to good positions.  

Don't know if you saw in the other thread the bit about the Stanford professor that took his money out and went to the sidelines?  Just amazing to me that people that should know better do that.  He should have taken some out at the high end.  THEN he would have had his buying opportunity.  NOW he missed it — I know others who did the same.  

That would be the only advantage if the economy stalls again or the scamdemic has another ‘spike’. At least there will be more buying opportunities. 

Don’t really have single stocks anymore.  I will day trade their options from time to time.  But don’t have the time to study them and take a large position on them.  

But since you guys have talked so much about WMT I have kept up with them.  They look real promising.  As you mentioned, there was a good buy chance with them a bit ago.  Maybe still is. 

Some of the funds I have for sure have them in it. 

Good luck with them when you get in. 

Raiders... I did see you post that earlier.  You're right, people like that Stanford professor   "should know better."  It just goes to show you how powerful the "emotional" aspect of investing can get to even the most qualified people.  I've read some articles before about behavioral finance, as I'm sure you have as well..  It's just in our DNA to protect ourselves from trouble when we see uncertainty on the horizon.    

We as human beings are hard-wired to do the exact "wrong" thing when it comes to our investments and relying on our "fight-or-flight" instincts.  We often look to protect ourselves from (perceived) trouble, often times at great peril to our portfolio when we sell near the bottom.   Warren Buffet's notion of "being fearful when others are greedy, and greedy when others fearful" is a powerful reminder to fight off our natural instincts.  

The "herd" mentality is also a powerful force in investing.  When people become fearful, they become less confident and seek refuge in what other people are doing.  Often times, those people are also selling. 

A final point I recall ; the pain people feel from losing on an investment is 2x what they feel when winning on an investment.  Again, the negative things seem to overwhelm our human senses.. 

Rush,

Excellent points!  You see it every time something like this happens. 

Very good analysis. 

Rush51 always on target, thanks for WMT  

I must be the Rodney Dangerfield of covers. 

gambleholic63 your cool  

As I mentioned Monday I purchased one call of Netflix strike price 610 when the stock hit 575.  Well it then lost 50 points Monday after it’s high. Lost again Tuesday. I believe lost Wednesday a couple points.  Then today ... the day everyone was waiting for.  It closed four points up then BAM.   Four minutes or so after close I see it dropped 60 frickin points and I started to laugh.  they beat estimates by 2-2.5 million new subs , yet it crashes ?  This one took me a few hours to figure out for this newbie.  uncertain and poor third quarter outlook was the news I guess I didn’t factor in Haha.  Still in disbelief.  But just like sports betting.  It is NEVER a good sign when 95% of the people expect a certain outcome.  Goldman and all the other stiffs increased their targets on this one this week.  UBS being the exception thinking the other way.  So once again my calls will expire out of the money 

And of course the one week I don’t purchase calls on $APT , the stock skyrockets three points in 2 hours before giving back a point.  I had to look up the strike price of 20 on this one since on Monday I was gonna go “Halfsies” on calls with Netflix and this one.  This one Opened at 13 cents and rose to 1.38 at its peak.  Good god man.  1061%    And at its low .04   An increase of 3450%.   Went too big on Netflix since it was much more expensive and didn’t drop a dime on APT.  nothing worse than riding a stock for a month , then having nothing on the table when it shoots up.  Hopefully this thing ain’t done climbing with earnings first week of august.  Which like Netflix ... they should shatter expectations.  but like Netflix.  Even if they destroy earnings.   What will the demand be for Q3 and 4?   Unless a successful vaccine is developed this year.  I just can’t see a scenario where their demand diminishes as hospitals continue to be in short supply of PPE

Lol.. for sure, Gamble !!  You deserve the credit for identifying WMT as a good stock.   It wouldn't have been on my radar if you hadn't talked about it. 

You say you bought at the 'top'?  The very top?  Like at 20?  Closed on Monday around 6?

Every day It has been up to 7 or so.  How were you not stopped out of that position by now?

Did you buy something that expensive AND that short a time-frame AND not have sell orders in place?

Maybe I am not understanding what you are saying?

Monday morning when Netflix was at 575.  Yes it’s top.  I bought one call at $19.24 for a 610 strike.  I’m as dumb as they get thinking earnings would kill and this could only go higher.  it lost every single day basically with today’s after hours crash.  

I don’t think I’ll sleep.  Four weeks ina row purchasing calls on APT.  then the fifth week I flock to a “public” pandemic stock and get bent over haaaaaard.  I see there was 2.56% of float shorted on Netflix from market watch.  unbelievable.  Wish I would’ve gone against the trend and shorted.  lol.  That’s something I’ve yet to do.   they say wayfair is the next company to short.  maybe you’ll see an opportunity and have it on my desk whenever it presents itself.  Hehe.  

and no sell orders in place.  I’ve told you im a all or nothing gambler.  I wait and wait till end of week basically.  That’s why I’m a pale shaped loser and my own dog won’t even let me pet him.  gotta get back on the APT train next week 

So you paid $1924 for a call and are going to let it expire?  All in or nothing?  You are willing to just lose ALL of the $1924?  Why not at least save $700 or so? 

I didn’t put a stop loss on why?  Because I thought not even an act of god could make this stock tank this week with earnings today. 
millions of new subscriptions yet they still MISSED earnings per share by 13%   Q2   How?  Good god man   Put me on a planet where normal makes since   This thing was hyped all Fukin week  
Man I wish I could cash out the remaining 300 that’s still tied to this call lol.  Once that market opens... it may be worth 30 cents.   thanks for checking in 

You should be able to -- they made it up to 7 today -- they should bounce around a good bit tomorrow.  There is a lot of volume.  But You should put the orders in tonight.  You can always adjust tomorrow.  But don't let them expire altogether.

Is this Groundhog Day?

Everyone keeps saying the risk reward set up on the markets is the worst it has ever been right? I have heard that 100 times over the past 3 months. 

So why isn't the market testing the lows? Such an interesting situation. Every day that ticks off the clock is one day closer to a vaccine. As days turn into weeks and weeks turn the clock into October and the markets hang in this 60 day range over the past 2 months, I will be beginning to think that a retest is not coming. 

A proven vaccine hits and these markets might go off and create the biggest bubble we have ever seen. Old highs might get blown out of the water!

Very true.  I think somewhere on here I posted a link/quote a bit ago about how there is not much else people are willing to do with their money right now to try to make more money.  I think there is some truth to that -- but partly because it is simply the overall best thing to invest your money in.

I think there has been 12 straight weeks where the Coronavirus Death Rate has dropped.  There has been too much credit given to the 'hope' for a vaccine.  There has never been a coronavirus vaccine.  This is an upper respiratory deal -- basically an external system.  Very difficult to develop a vaccine because of that and other reasons.  This time there is so much money and political push behind it, maybe they get something out of it.  But not sure it is monetarily worth it compared to letting the Farr, Pareto, FIT, and herd immunity just run its course.

I really think reasonable people see the charts that matter -- not these new inflated infection numbers -- and couple that with the fact that things are getting better and decide the market is fine for now and, for sure, fine long term.

Bottom line is I do not think a vaccine will matter that much to the markets.  By the time it has been developed, tested, distributed, etc. -- there really will be no need for it.  The virus will have more or less run its course.  Unless you are in some of those particular stocks and there is a big 'political' push to force vaccinations on everyone -- especially, in view of the fact we have 'invested' so much time and money in it by then.

However, the markets may balloon and bubble for a lot of other reasons.

Just have to view it as a money making opportunity.

Jeezus, by the time we can get a vaccine  here  in this country,  it might not be worth it .  I agree w Raiders here....

  Somewhere along the way (protesters,  ""girls gone wild parties"") ,  the U.S. has gone completely off the rails when it comes to confirmed cases.    About 4 weeks  ago,  the trajectory completed changed compared with Europe, for example.   Theirs continued to go down, ours in the opposite direction. 

As of today on a 7 day average, we have 70k new cases a day !  Europe... 5k cases.   WSJ source. 

So, how do we tie all of this into the market? .... I don't know, other than to say Trump's 11% deficit to Biden means time is running out !! He truly faces almost unsurmountable odds to turn this around IMHO.   I think people will blame him for the out of control conditions,  which he certainly shares some responsibility.  

BTW, the South China Sea is becoming a bit of a tinderbox if anyone is paying any attention ( the press isn't) .   Trump realizes that his re-election chances have fallen victim almost completely to the Chinese virus, and Trump  might become  a bit more aggressive  in U.S actions as a result.   JMHO 

Rush look at the death rate. Falling every week.  So, they use only cases now.  Of course they are way up because way more testing is being done. 

If you go in for elective knee surgery you get tested. Everyone gets tested now even if you have no symptoms.  Etc. etc. 

Since you say Trump should have some of the responsibility — what would you say he is responsible for exactly?  What should he have done differently?  Even Fauci and Birx said he was doing everything they asked him to do.  The issue is he was in a no-win situation.  They stuff they asked him to do did not work.  There is even evidence that the lockdowns did not work and even made it worse.  And he does not even control that aspect of it.