Losses on investments in shares

RogerIrvine

Retireby40 said:

OP what companies did you invest in just out of interest sake?

Tesla would be favourite for a couple of reasons;- it is the most heavily traded company in the world and its price peaked on Nov4th., before Elon Musk very publicly decided to sell some of his holding. The sell off has not been mirrored by other mega-caps and itself is but a fraction of the spectacular rise of the stock. If I held Tesla (too volatile for me) I would not be selling now. Up 6% this morning. So I very much agree with the advice of Retireby40 - hold on. Don't run the risk of losing heart at the beginning of your investment journey by being wrong twice.

GB12

RogerIrvine said:

Retireby40 said:

OP what companies did you invest in just out of interest sake?

Tesla would be favourite for a couple of reasons;- it is the most heavily traded company in the world and its price peaked on Nov4th., before Elon Musk very publicly decided to sell some of his holding. The sell off has not been mirrored by other mega-caps and itself is but a fraction of the spectacular rise of the stock. If I held Tesla (too volatile for me) I would not be selling now. Up 6% this morning. So I very much agree with the advice of Retireby40 - hold on. Don't run the risk of losing heart at the beginning of your investment journey by being wrong twice.

Tesla is my definition of grossly overpriced. It will take a kicking one day. But as you say it could easily recover before that happens.  
I think the OP's mistake was in not doing his research and starting his long term (hopefully) investments in the wrong investments. A huge amount of people have gone into the stock market blind (no knowledge). They have just seen the big bounce back in the market and decided to jump in late in the day. 

Prism

GB12 said:

Nor do I believe that Microsoft dominates the cloud. Amazon is big on data centres. BUT with artificial intelligence there is a long long way to go. I will give you that.  Via crowd cube I have a small Investment in the small robot company. 

Sure, between Microsoft and Amazon then. I don't think Amazon will catch Microsoft anytime soon and I don't see Google catching Amazon either. 

 I think true AI is a very long way away but between that and virtual reality is why the growth rate in these big tech companies might well be sustainable. In the end they may not be overpriced at all... this time.

GB12

Thrugelmir
"The red will reflect the broader market view of the stock. Somebody has to be last to the party and end up on the wrong side of the trade. As to buy a stock somebody else has to sell. For every winner there's a loser. Trading isn't a one sided activity."

For every winner there's a looser?
So if I sell at 20% profit the buyer can't make a profit?
That Implies every share I bought I would be at a loss?
Seriously? 

RogerIrvine

No idea whether Tesla was grossly overpriced in Nov or underpriced a year before. The same kind of dip happened to Apple three years ago when the company stopped reporting iPhone unit sales; lost a third of its value in about four months and we all know what has happened to the share price since.

 Imo the other thing to learn early is that it is not a game where you can claim your money back if you stop winning and don’t kid yourself that you have not made a profit or loss until you sell. The +/- is real all the time, 

eskbanker

adindas said:

S&P P/E ratio is already very high close to the value when there was a dot.com bubble. This is also in line with Shiller P/E Ratio. But if you look the valuation based on the Warren Buffet indicator the market is already at ATH.

S&P 500 performance are drivend by the performance of Mega Caps stocks such as by FAANG is already overheated.

Your Buffett indicator chart only seems to go as far as February 2021 - if the S&P 500 was considered overheated back then, that didn't prevent it from rising by about 25% since?

Thrugelmir

GB12 said:

Thrugelmir
"The red will reflect the broader market view of the stock. Somebody has to be last to the party and end up on the wrong side of the trade. As to buy a stock somebody else has to sell. For every winner there's a loser. Trading isn't a one sided activity."

For every winner there's a looser?
So if I sell at 20% profit the buyer can't make a profit?
That Implies every share I bought I would be at a loss?
Seriously? 

There's inflation to be considered over the longer term. Company growth and profitability is finite. 

GB12

london21 said:

Might be worth trying low risk index funds than individual shares. 

A good suggestion but I would add collectives as well 

eskbanker

GB12 said:

As an aside does anyone know why at least 3 of my posts have been removed? They contained no swearing.  Who is the moderator for this.

The forum isn't moderated as such but there is a team of administrators who react to reports of content deemed to be in breach of the forum rules, which are explained at https://www.moneysavingexpert.com/site/forum-faqs/

GB12

Thrugelmir said:

GB12 said:

Thrugelmir
"The red will reflect the broader market view of the stock. Somebody has to be last to the party and end up on the wrong side of the trade. As to buy a stock somebody else has to sell. For every winner there's a loser. Trading isn't a one sided activity."

For every winner there's a looser?
So if I sell at 20% profit the buyer can't make a profit?
That Implies every share I bought I would be at a loss?
Seriously? 

There's inflation to be considered over the longer term. Company growth and profitability is finite. 

Apologies I am simplifying. 
Inflation is a product of companies raising prices, hence they are Inflation proof!
Obviously not strictly true some are price takers some are price makers.
So it's a matter of changing your investments to take this into account. 
I am of the belief that inflation is a transitory. AI and Robotics will snuff it out in the medium term. In the short term its a supply side phenomenon, businesses will deal with it fairly quickly....please!