Board 8 > Stock Topic 8

(+) Yeah! (+)

I am into the 12s now.

3)

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Damn. You couldve put that money into other stocks and gotten more of a return out of them than AAL.

I have been very busy with my business lately and I genuinely believe in AAL's rebound potential in the time period I need (1-3 years)

I haven't had a ton of time to research stocks lately and Tesla still makes no sense to me, so hey fair to the people who make money on it and I feel like Amazon's bubble is getting ready to burst at least a little bit, and I don't think the gain is enough to make me want to go on an adventure with them.

Either I am right or wrong on AAL, guess we'll see.

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Lmao amazon plummeting 5%! Jesus.

If you hear a lot of people saying that ABC stock can't go down or it'll go up forever, it's probably about to go down.

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red sox 777 posted...

If you hear a lot of people saying that ABC stock can't go down or it'll go up forever, it's probably about to go down.

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I'd buy more, but I'm poor

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2nd day that Dow is outperforming Nasdaq. Hopefully the long-awaited sector shift rotation is here. Still think there's a significant chance of a June 11 type day this week, but I guess if it does come it's probably going to be the tech stocks leading the way down. I guess I'm still holding.

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Amazon will never reach its 3300 mark again.

Amazon and Apple have close to the same market cap (Apple is like 10% higher) but Apple has nearly 5 times the earnings.

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I'm so fucked. I thought I left enough available margin that this wouldn't happen, but I'm in another margin call now. It's because AVCT keeps bleeding out, which I fully expected to happen until the next ER in August with the Computex numbers. I knew better than this, was just hoping I could make money off LCA and GAN before that happened. I have no one to blame but myself.

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StartTheMachine posted...

I'm so fucked. I thought I left enough available margin that this wouldn't happen, but I'm in another margin call now. It's because AVCT keeps bleeding out, which I fully expected to happen until the next ER in August with the Computex numbers. I knew better than this, was just hoping I could make money off LCA and GAN before that happened. I have no one to blame but myself.

You're overinvested in AVCT. You shouldn't be putting most of your portfolio in one stock unless it's something extremely stable like Berkshire Hathaway or Apple or something. Like you don't need a lot of diversification but having like 3-5 stocks is a world of difference from 1.

And I say 1 even though you have more than that because your exposure in AVCT is around 100% of your portfolio equity. That's effectively the same thing as putting all your money in it.

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Am I screwed with Amazon for life now, and maybe AAL? I can sell both now for a $14k loss which would bring my net stocks profit to $4k.

Took my $25 profit on XELA for now. I feel like I want some money freed up soon.

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Moonroof posted...

Am I screwed with Amazon for life now, and maybe AAL? I can sell both now for a $14k loss which would bring my net stocks profit to $4k.

Amazon will be fine even in the short term.

Airlines will recover but no one should be looking to them for short term gains.

Amazon is still higher than it was a week ago. You should be able to handle a 10% loss. I mean I do think it's overpriced but it was even more overpriced yesterday.

And the odds of it closing on Friday higher than your purchase price is like......not at all low.

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https://static.seekingalpha.com/uploads/2018/1/23/48558512-15167626365862508_origin.png

I'm sure people have seen this, but this is super useful. This bubble pattern happens over and over and over when dealing with companies that have no earnings or very little in earnings at the present, but tremendous future growth opportunity.

You just have to buy and sell on the correct parts of the graph!

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red sox 777 posted...

https://static.seekingalpha.com/uploads/2018/1/23/48558512-15167626365862508_origin.png

I'm sure people have seen this, but this is super useful. This bubble pattern happens over and over and over when dealing with companies that have no earnings or very little in earnings at the present, but tremendous future growth opportunity.

You just have to buy and sell on the correct parts of the graph!

When will this be Tesla time

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I accidentally had multiple amazon spreads purchase yesterday and I got obliterated.

going to move everything into long term and take a break for a while

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Same. Wish I had the restraint to not look for a year.

CAR is quietly up 5% today. I love this stock.

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Market is up nearly 2% but all my stocks are red.

Well...Dow is
NASDAQ is barely green
And this is what I invest in usually (I don't right now)

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red sox 777 posted...

You're overinvested in AVCT. You shouldn't be putting most of your portfolio in one stock unless it's something extremely stable like Berkshire Hathaway or Apple or something. Like you don't need a lot of diversification but having like 3-5 stocks is a world of difference from 1.

And I say 1 even though you have more than that because your exposure in AVCT is around 100% of your portfolio equity. That's effectively the same thing as putting all your money in it.

No doubt about this. When I chased it during its sudden surge I was putting most of my money on it, GNUS style. When it went down I really should have cut my losses, even as badly as a 4k loss would have hurt. I stuck with it because I believe in it and absolutely still do, but I realize that the whole "you only lose money when you sell" mentality is asinine for speculative stocks like this.

I mean, I fully expected it might drop to the levels I originally bought it at (2.12) when the end of June ER didn't have the Computex numbers or forward guidance. And now I could now be putting my capital back into it at these levels. I guess the reason I didn't is because as likely as I thought it might be that it would keep bleeding out, stocks are still unpredictable and I would've been mad if I sold and it suddenly surged again if there was PR. I didn't 100% know I would be given the opportunity to buy again this cheap, I just thought it likely.

It's pretty tricky, and I'm not sure there's even any takeaway I can have from it. Cut losses quickly even at a significant chunk of your portfolio, and even when it's a company you've researched for hours and fully believe in? Hard to swallow.

Actually, one good takeaway is that if I ever double down on a surging stock I need to get out just as fast. There was a point that my account value was at 36k and I could have closed my position. Now it's half that.

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Oh hey, GAN and LCA are green for me now today. I might catch a lucky break here.

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StartTheMachine posted...

No doubt about this. When I chased it during its sudden surge I was putting most of my money on it, GNUS style. When it went down I really should have cut my losses, even as badly as a 4k loss would have hurt. I stuck with it because I believe in it and absolutely still do, but I realize that the whole "you only lose money when you sell" mentality is asinine for speculative stocks like this.

I mean, I fully expected it might drop to the levels I originally bought it at (2.12) when the end of June ER didn't have the Computex numbers or forward guidance. And now I could now be putting my capital back into it at these levels. I guess the reason I didn't is because as likely as I thought it might be that it would keep bleeding out, stocks are still unpredictable and I would've been mad if I sold and it suddenly surged again if there was PR. I didn't 100% know I would be given the opportunity to buy again this cheap, I just thought it likely.

It's pretty tricky, and I'm not sure there's even any takeaway I can have from it. Cut losses quickly even at a significant chunk of your portfolio, and even when it's a company you've researched for hours and fully believe in? Hard to swallow.

Actually, one good takeaway is that if I ever double down on a surging stock I need to get out just as fast. There was a point that my account value was at 36k and I could have closed my position. Now it's half that.

I'm not saying to sell a position in a fast moving stock quickly, whether it moves up or down. I'm saying to avoid making that position so big that it's potentially portfolio-destroying in the first place. If you limit opening a position to say, 1/3 of your equity, one big downward move in a stock won't do a debilitating amount of damage.

Now you may say, but then a big move up doesn't give me as much reward. True, but you can use the other 2/3 of your equity to buy other stocks. Those can move up too. It's much less likely that all 3 of your stocks suffer big downward movements at the same time, so you don't have to worry so much about cutting losses or taking profits too early and can be more objective in your decisionmaking and comfortable. The thing is a -50% move is a much bigger deal than a +50% move. If you suffer a -50% move, you need a +100% move to make back what you lost!

3 is way less diversified than most people would advocate but I think it already captures most of the gains of diversification. That is, if you were to go from 1 stock to say, 100, I think the move from 1 to 3 already provides probably 60%+ of the variance reduction that you would get from going to 100 stocks. Warren Buffett has advocated holding as few as 3 stocks that you've heavily researched and strongly believe in rather than holding a lot more in the name of diversification, because the number goes up you have to invest in companies you don't believe as strongly in, losing advantage.

But if you want less risk, maybe go to 5-10 stocks. If you're one of those people who wants to hold 30+ stocks you might as well just buy SPY and save yourself the time and effort.


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I'm putting some money on CREX (got in at $2.29 currently at $2.41) as they're going up due to a partnership with Samsung that should be announced tomorrow (unless reddit is lying to me)

Fairly stable baseline that has a limited downside currently-- could easily see it doubling+ tomorrow. We'll see.

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New vaccine news this afternoon! All the travel stocks are up big after hours.

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Lets hope it holds!

Go my MRNA

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A few more days like these for VLO and I just might land back in the green.

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There goes penis tonic

I suggest buying the dip, but dont hurt me if it dips more cuz I can't buy the dip and feel bad we both lost money

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https://www.oldschoolvalue.com/investing-strategy/kelly-criterion-investing-portfolio-sizing/

Here is an article on the Kelly Criterion which I find to be very useful in helping with bet sizing. The Kelly Criterion tells you what percentage of your capital to bet given the odds and your expected edge. Roughly speaking, an optimally sized Kelly bet is:

Percentage of Capital = Edge / Payoff

So, let's say stock A is trading at $10. You think it has a 50% chance of going to $30 and a 50% chance of going to $0 (bankruptcy). How much do you bet?

Applying Kelly, we first calculate your edge. The expected value of the stock price is $15 (1/2*0 + 1/2*30). You can buy it now for $10. Therefore, your edge is 50%.

Next you divide your edge by the payoff (+200%). So 50/200 = 25%. Thus, an optimal Kelly bet for this situation would be 25% of your capital.

As the article says, in practice a full Kelly bet is very risky and humans are likely to feel extreme psychological pressure when a full Kelly bet goes bad. Thus, in practice, it's probably better to do a half-Kelly bet. So in the above situation, bet 12.5% of your portfolio instead of 25%. According to the article, a half-Kelly bet captures 75% of the edge of the full-Kelly bet with only half the risk.

Once you increase your bet beyond full-Kelly, your expected bankroll growth actually starts going down because your risk is increasing much faster than your edge. Thus, betting substantially more than full Kelly is likely to lead to portfolio ruin even if you have an edge because the volatility will be so high that when a downswing comes it will wipe you out. For an extreme example, imagine playing Powerball when the prize has reached $1 billion. Your EV is majorly positive, your edge may be something like +400%, but if you invest your life savings in Powerball tickets, there is still a 99.999999% or something chance you go broke. If you have enough money to buy every single combination of numbers, you would do that for $200 million or whatever it cost and pick up your free $800 million. But since you don't, even though the edge doesn't change, the risk does.

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Dow is up a lot. Nasdaq not as much. Definitely looks like the tech stocks had their 15 minutes (note like three months) and now theyre returning back to normal. Ugh amazon.

*Looks up*

AAL is at this moment in the green for me overall lol.

Come on AAL, spike by 100% just to be weird.

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Hopefully the travel stocks continue bouncing back. Itd be nice to win on one of my big positions!

Also I might just sell amazon for the 10% loss because it craters

Id like to wait until the earnings report but it could stop another 10% by then.

in the panic of march AAL got down to a little under 9 a share.

It being at 11 something when there are flights and a clear path forward long term made no sense. It was just like 'haha you got a loan from the government and clearly even biden if he wins will bail you out because MURICA, let's lower the price more.'

<_<

I don't put this much money into anything that I am not certain of long term.

Also I expect AAL to crater on opening as people who bought in at like 12 take their money and run

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Moonroof posted...

Also I might just sell amazon for the 10% loss because it craters

How terrible is it that I am more confident my horrific Amazon spread position will recover now

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With this rise, I am debating whether to sell some of my CAR shares again. I probably should since it's run up a lot and therefore isn't as good a deal as it once was. But man, when it is so strong and other stocks have lagged I kinda want to hold the entire line.

I guess I'll sell some incremental amount and put it into AMTD. Their earnings report is next week.

Do I sell MRNA and then buy back in on a pullback? Seems like the right move

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neonreaper posted...

Do I sell MRNA and then buy back in on a pullback? Seems like the right move

Imo yes, I expect a pretty big dumpo, probably should be able to get back in for a few days......unless I'm wrong

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Smart money (in my head) is on WYNN right now, but might be too late there. I still see it rising with Macau back online though.

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I put in BRK.B again because if tech is kinda stalled, then BRKB will do pretty good.

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Finally got some cash on hand to buy back in but it's too late

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Considering MSFT considering its earnings are in about a week.

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That said I'll prob sit out this morning

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I set limit sell orders for a portion of my shares for CAR at $31.30 and DAL at $29.40. Well, CAR is unlikely but possible, DAL looks like it's not happening today barring some more major news. Looks like we probably won't be hitting those today so we continue holding.

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Eventbrite was up more than 12% this morning but has since faded back down to +4%. I had been looking to buy that stock and thought my opportunity was gone when I saw the +12%.

Glad to see Amazon and Tesla finally declining. Some sanity returning to the market (although this could end up just being a short pullback).

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