Suggestions for a speculative punt?

Malthusian

"Too big to fail" and "safe as houses" are the investing equivalent of those songs that people play at weddings because they haven't listened to the lyrics. E.g. "Young Hearts Run Free" (about an unhappy marriage) and "Every Breath You Take" (about stalking).

A lot of people were wiped out because they invested in banks that were "too big to fail". The banks may have been too big to fail but the pre-bailout shares weren't.

Amazon may be a massive part of the global infrastructure but so was General Electric.

csgohan4

Malthusian said:

"Too big to fail" and "safe as houses" are the investing equivalent of those songs that people play at weddings because they haven't listened to the lyrics. E.g. "Young Hearts Run Free" (about an unhappy marriage) and "Every Breath You Take" (about stalking).

A lot of people were wiped out because they invested in banks that were "too big to fail". The banks may have been too big to fail but the pre-bailout shares weren't.

Amazon may be a massive part of the global infrastructure but so was General Electric.

Crystal ball unfortunately, the previous performance doesn't always translate to future either as always, but as humans we can't help but be swayed by them, BG being the current flavor of the year so far for fund houses. 

As someone said, today's winners could be tomorrow's losers. 

But that's why index trackers are useful for diversity, they only have a few % points in Amazon, but having said that, most have more than 40% exposure to the US markets.

Hence why holding individual shares is risky. Look at TSLA, people who got in late are looking at significant loses

adindas

csgohan4 said:

Crystal ball unfortunately, the previous performance doesn't always translate to future either as always, but as humans we can't help but be swayed by them, BG being the current flavor of the year so far for fund houses. 

As someone said, today's winners could be tomorrow's losers. 

But that's why index trackers are useful for diversity, they only have a few % points in Amazon, but having said that, most have more than 40% exposure to the US markets.

Hence why holding individual shares is risky. Look at TSLA, people who got in late are looking at significant loses

Well, holding individual share has always been riskier then Index fund. I think everyone who invest in individual stock understand that concept. However, keep in mind it is not taking more risk for nothing. It is about Risk vs reward.

If you are investing in individual stock and you cannot beat the market then there is no point of taking risk as well as wasting time researching, doing DD and analysing really. It is better to stick to VLS, Vanguard Lifestrategy, Vanguard target retiremen VUSA S&P 500 or the like. Alternatively, the safest one is in saving account, government bond.

About TSLA, people will only lose their money if they sell it. It already shows sign of bouncing back, it will eventually bouncing back to all time high like any other technology stock.

At the time of writing TSLA = $604.87. Let see it in a few months from now.

To me TSLA and NIO stock is for my pension. I will not sell it. Unless I deperately need money. The chance these companies go bankrupt is next to none.

kuratowski

adindas said:

Well, holding individual share has always been riskier then Index fund. I think everyone who invest in individual stock understand that concept. However, keep in mind it is not taking more risk for nothing. It is about Risk vs reward.

But (the economic theory goes that) the reward of buying a single stock doesn't adequately compensate you for the risk.  Simply buying a single stock exposes you to diversifiable risk, which has no reward.  The efficient frontier is achieved by a diversified portfolio at the appropriate level of risk.  Of course, this doesn't mean you shouldn't hold single stocks, you just need to hold enough different single stocks to achieve a diversified portfolio.  If you believe the research, enough may be as few as 20 stocks.

csgohan4

adindas said:

csgohan4 said:

Crystal ball unfortunately, the previous performance doesn't always translate to future either as always, but as humans we can't help but be swayed by them, BG being the current flavor of the year so far for fund houses. 

As someone said, today's winners could be tomorrow's losers. 

But that's why index trackers are useful for diversity, they only have a few % points in Amazon, but having said that, most have more than 40% exposure to the US markets.

Hence why holding individual shares is risky. Look at TSLA, people who got in late are looking at significant loses

Well, holding individual share has always been riskier then Index fund. I think everyone who invest in individual stock understand that concept. However, keep in mind it is not taking more risk for nothing. It is about Risk vs reward.

If you are investing in individual stock and you cannot beat the market then there is no point of taking risk as well as wasting time researching and analysing really. It is better to stick to VLS, Vanguard Lifestrategy, Vanguard target retiremen VUSA S&P 500 or the like. Alternatively, the safest one is in saving account, government bond.

About TSLA, people will only lose their money if they sell it. It already shows sign of bouncing back, it will eventually bouncing back to all time high like any other technology stock.

At the time of writing TSLA = $604.87. Let see it in a few months from now.

To me TSLA and NIO stock is for my pension. I will not sell it. Unless I deperately need money. The chance these companies go bankrupt is next to none.

NIO has been up and down like a YO yo last few months. Also on my short list together with Xpeng, But given the China hammer on BABA, I am a bit apprehensive to put some coin in. 

TSLA might be an option, but volatile to say the least. Musk is a maverick. Although you could do worse with EVFM's management. 

adindas

kuratowski said:

adindas said:

Well, holding individual share has always been riskier then Index fund. I think everyone who invest in individual stock understand that concept. However, keep in mind it is not taking more risk for nothing. It is about Risk vs reward.

But (the economic theory goes that) the reward of buying a single stock doesn't adequately compensate you for the risk.  Simply buying a single stock exposes you to diversifiable risk, which has no reward.  The efficient frontier is achieved by a diversified portfolio at the appropriate level of risk.  Of course, this doesn't mean you shouldn't hold single stocks, you just need to hold enough different single stocks to achieve a diversified portfolio.  If you believe the research, enough may be as few as 20 stocks.

True, based on statistics of majority of people cannot beat the market. This is not only applicable to retailer investors but also applicable to HF managers.

However, if other people cannot do it, it does not mean you could not and you will never know this if you have not tried it. Look at on YouTube and to some extend Reddit view people show you evidence showing their journey blog to beat the market significantly. Some of them are scam just want to sell their course but people with common sense could easily spot them.

Also just be aware about the research saying 90% of people (including HFs) cannot beat the market ;Most of this publications are already very old written around 1970s. Nowadays with online analytical tools, websites offering free analytical and price prediction (to be take it with a pinch of salt) the game has changed.,

What you probably not aware of vast majority (if not all) of retail investor who are investing in Individual stock have also invested in index fund.

Apart from a very few Iron hold stocks to be hold for a very long term, majority of the individual stocks are for short term momentum play, to be swing traded. It is not to be hold for long term.

Example:

AMC stock: those people who do DD diligence will conclude that the possibility of short squeezed is very high as the ape control 80% of the stocks and the amount of publicity. Also it is well known that percentage of naked shorting going on on the dark pool by the HFs are unmmignable, just to let them stay above the water. Majority of those who enter this game joining the apes army earlier have already up 100%+. Risk: go to $0, Reward: Upside potential is unlimited, it could go to infinity. If you research you will find many people say. AMC is MOASS (The mother of all short squeezes).

Past Example: GME stock go from $20-$400 in just a few months, Volkswagen EUR100 to EUR1,000 in a very short period.

This is not investing but betting with lottery stock but with calculated risk. But people say stock market is the largest casino on earth.

adindas

csgohan4 said:

adindas said:

csgohan4 said:

Crystal ball unfortunately, the previous performance doesn't always translate to future either as always, but as humans we can't help but be swayed by them, BG being the current flavor of the year so far for fund houses. 

As someone said, today's winners could be tomorrow's losers. 

But that's why index trackers are useful for diversity, they only have a few % points in Amazon, but having said that, most have more than 40% exposure to the US markets.

Hence why holding individual shares is risky. Look at TSLA, people who got in late are looking at significant loses

Well, holding individual share has always been riskier then Index fund. I think everyone who invest in individual stock understand that concept. However, keep in mind it is not taking more risk for nothing. It is about Risk vs reward.

If you are investing in individual stock and you cannot beat the market then there is no point of taking risk as well as wasting time researching and analysing really. It is better to stick to VLS, Vanguard Lifestrategy, Vanguard target retiremen VUSA S&P 500 or the like. Alternatively, the safest one is in saving account, government bond.

About TSLA, people will only lose their money if they sell it. It already shows sign of bouncing back, it will eventually bouncing back to all time high like any other technology stock.

At the time of writing TSLA = $604.87. Let see it in a few months from now.

To me TSLA and NIO stock is for my pension. I will not sell it. Unless I deperately need money. The chance these companies go bankrupt is next to none.

NIO has been up and down like a YO yo last few months. Also on my short list together with Xpeng, But given the China hammer on BABA, I am a bit apprehensive to put some coin in. 

TSLA might be an option, but volatile to say the least. Musk is a maverick. Although you could do worse with EVFM's management. 

At the time of writing

NIO: $45.02

XPEV: $41.03

TSLA: $604.87

Let revisit these stocks in a few months time from now.

About volatility. Peter Lynch: "Ohhhh I love volitility".

The contrarian investor: The time to buy is where there is blood on the street. "Be Greedy When Others are Fearful".

Malthusian

kuratowski said:

adindas said:

Well, holding individual share has always been riskier then Index fund. I think everyone who invest in individual stock understand that concept. However, keep in mind it is not taking more risk for nothing. It is about Risk vs reward.

But (the economic theory goes that) the reward of buying a single stock doesn't adequately compensate you for the risk.

It would if you had enough skill to consistently identify shares that are undervalued by the market.

Economic theory says "Nobody can consistently beat the market" and individual share punters say "I feel lucky".

Of course, this doesn't mean you shouldn't hold single stocks, you just need to hold enough different single stocks to achieve a diversified portfolio.  If you believe the research, enough may be as few as 20 stocks.

But by the time you've done enough research to identify 20 stocks that are diversified enough over sectors and continents to adequately reflect the performance of the global stockmarket, you may as well just buy an index fund holding thousands.

If you didn't do meticulous research in picking your 20 shares, you could easily end up overexposed to something like mining or fossil fuels, and in turn run the risk that those sectors fall out of favour.

The original research suggesting the benefits of diversification topped out at 20 shares was done decades ago when the S&P 500 was virtually the global stockmarket and the world moved a lot slower. To be confident of not falling behind the MSCI World with a 20-share portfolio you've got to pick 20 shares across the US, Europe, Japan and Pacific that adequately reflect not just what is profitable now but what will be profitable in the future. 20 shares picked from the S&P 500 in 1970 would probably have looked a lot more diversified than it would now.

Thrugelmir

adindas said:

kuratowski said:

adindas said:

Well, holding individual share has always been riskier then Index fund. I think everyone who invest in individual stock understand that concept. However, keep in mind it is not taking more risk for nothing. It is about Risk vs reward.

But (the economic theory goes that) the reward of buying a single stock doesn't adequately compensate you for the risk.  Simply buying a single stock exposes you to diversifiable risk, which has no reward.  The efficient frontier is achieved by a diversified portfolio at the appropriate level of risk.  Of course, this doesn't mean you shouldn't hold single stocks, you just need to hold enough different single stocks to achieve a diversified portfolio.  If you believe the research, enough may be as few as 20 stocks.

 Volkswagen EUR100 to EUR1,000 in a very short period.

When did the VW share price hit a €1,000 ?  

adindas

Thrugelmir said:

adindas said:

kuratowski said:

adindas said:

Well, holding individual share has always been riskier then Index fund. I think everyone who invest in individual stock understand that concept. However, keep in mind it is not taking more risk for nothing. It is about Risk vs reward.

But (the economic theory goes that) the reward of buying a single stock doesn't adequately compensate you for the risk.  Simply buying a single stock exposes you to diversifiable risk, which has no reward.  The efficient frontier is achieved by a diversified portfolio at the appropriate level of risk.  Of course, this doesn't mean you shouldn't hold single stocks, you just need to hold enough different single stocks to achieve a diversified portfolio.  If you believe the research, enough may be as few as 20 stocks.

 Volkswagen EUR100 to EUR1,000 in a very short period.

When did the VW share price hit a €1,000 ?  

There are a lot of info about VW short squeeze. Around 2008 VW became the most valuable stock on earth for a few days. Keep in mind the chart you see above is not a daily chart, so it does not catch the spike on the particular hours on specific day..