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ancona

Praying Mantis
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It seems like the market is not sure what to do today. After Fridays rout, stocks are vacillating up and down in a small range, and doing so on higher than usual volume. It would seem they are awaiting some headline or another, since we all know stocks cannot trade on fundamentals anymore, they can only trade on rumor and innuendo.
 
Ain't that the truth.
Investing in the market seems more like gambling than investing anymore.
 
I think we are still digesting the move from last friday.

The stock market looks vulnerable. The only thing keeping it propped up at this point is the euro short squeeze/dollar profit taking. There also seems to be a bit of profit taking after the big up move in gold from Friday.

It would be nice to see some follow through but i'm afraid it's too heavily dependent on short term news driven catalysts at this point. There is no urgency to put a long position on and no real urgency to sell, until the news crosses. It's all algos at this point..
 
HCA1961 said:
Ain't that the truth.
Investing in the market seems more like gambling than investing anymore.
Click to expand...

Buying a stock at $20 a share for the single reason of hoping it increases to $30 a share and selling it for profit is no different than taking $20 to the casino and betting it on red. It is purely gambling.

The original reason for stocks was to buy a portion of a company to allow you to receive part of the profits of that company; Dividends! Buying something for the intent of recieving regular cash flows is investing.

I have, in the past, invested in dividend paying stocks. I couldn't care less if their stock prices went up or down. I only cared if they continued to pay me dividends.
 
Buying a stock at $20 a share for the single reason of hoping it increases to $30 a share and selling it for profit is no different than taking $20 to the casino and betting it on red. It is purely gambling.

The major difference is that in the long haul you have a 50-50 chance of making money on stock minus commissions, versus guaranteed loss at most gambling.
 

Odds of betting on black and winning pm a single spin of the Roulette:
18/37 ~ 48.65%

Odds of betting on a single stock and winning (minus 1% commision)
50/100 - 0.01 = 49%

:shrug:


This of course does not take into account what you "win" or "lose"

In Roulette, if you win, you double your money, or 100% return upon hitting black
If you lose, you lose the entire bet.

In the market, if you win, your gains can vary greatly.
If you lose, it varies from total loss to small partial loss.
 
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stocks are companies.. not numbers on a roulette wheel. Now if you are talking about making money in a day, week, month... Yeah.. it can be pretty random.
 
Ben:

Note two things. First I said "long haul." Odds are meaningless for one off bets/trades. Only the long haul averages mean anything, if and only if you can survive the negatives.

Second, I said "most gambling" as different forms of gambling have different odds. Apparently the roulette tables are a wash compared to stocks. If you gamble via lottery tickets, I seriously doubt that the odds would be that favorable.

**********

Markets that go sideways for long periods of time typically go fast and far once they break out of the sideways range. The tighter you wind the spring, the faster and more furious that the spring unwinds when it breaks loose.
 
So, in after hours we have:
BAC 6.87
GRPN 8.96
C 30.90
FB 26.87

All of these stocks have been hammered for the last week or two, and BAC/C are by far the most worrisome. The financials are ailing pretty badly right now, and It doesn't bode well for the industry as a whole.
 
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ancona said:
All of these sticks have been hammered for the last week or two, and BAC/C are by far the most worrisome. The financials are ailing pretty badly right now, and It doesn't bode well for the industry as a whole.
Click to expand...

Nothing the fed buying up mortgage debt wont fix. :wave:
 

Unfortunately, in the current environment you must match inflation and taxes simply to maintain your purchasing power, let alone get any real returns.

given:
n years of investment
i inflation rate
t tax rate
x initial investment
r rate of return needed to break even

x*(1+i)^n = [(x*(1+r)^n)-x]*(1-t)+x

The annoying part is if your returns merely equal inflation, the government still considers you have made a profit and tax you. Thus, you have to earn more than inflation just to maintain your purchasing power.

For example, if inflation is 5% and tax is 30%, you would have to earn a return of ~7.14% just to break even.
 
Benjamen,
If you simply buy silver to protect your wealth, you will be saved the hassle of having to perform algebra to figure out how to make a decent return. ; - )
 
ancona said:
Benjamen,
If you simply buy silver to protect your wealth, you will be saved the hassle of having to perform algebra to figure out how to make a decent return. ; - )
Click to expand...

If one was to assume I owned any precious metals, then I would have to worry about my government ruining the USD and trying to tax me on the "profits" of increased number of USD required to buy precious metals. Thankfully, that is all just theory!

:shrug:
 
I apologize Benjamen, I forgot all about that boating accident and again, I am sorry for your loss. It's really too bad the water is so deep you cannot recover your metals.
 
Looks like gold and silver levitated overnight thanks to QE rumor.
 
I'm not a magician! I'm in the peanut gallery.

 
the market sure as heck have a direction today.. i nearly soiled my pants, dow up almost 300, all the metals in the green. what's the big rumor today? i'm sure swissaustrian will update!
 
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