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Your comment seems so ignorant to me. Maybe that's true if you are day trading, or picking dozens of short-term holds each year instead of long-term buys. My

Your comment seems so ignorant to me. Maybe that's true if you are day trading, or picking dozens of short-term holds each year instead of long-term buys. My stock picks have been: * Google in 2003, because I worked in a call center and saw EVERYONE using it all the sudden to find answers on tech support calls. * Chipotle at their IPO because I saw the huge lines at every location in my city. * Amazon in 2008 after the big stock market crash, simply because it just seemed super undervalued considering everyone was still using it / loved it. * Broadcom in 2014 because it was obvious the cellular industry was going to keep growing and they were well-positioned / undervalued at the time. None of that thinking required me being a wizard. Nor was it luck. More just seeing obvious momentum and being willing to act.

ryandrake 9y ago
That a great example of survivorship bias! Take a successful outcome and look back for decisions that must have led to it. This ignores the people who also "saw the obvious" in 2003, 2008, and 2014 who lost their shirt.
- Danihan 9y ago
  The issue with your argument is pretending the stock market is similar to a coin flip. That's a very facile comparison. In reality each company is a very complex black box in which you can only see very limited internals. The examples I listed were not random chance. They are companies that had absolutely dominated their market positioning and were later massively rewarded for doing so. It's fairly easy to see when a company is eating everyone else's lunch. Again, it isn't just random chance. It also isn't rocket science..
  - golangnews 9y ago
    Please tell us about your big failures as well - statistically you must have had some, and I’m sure you’ve been tracking them with equal rigour?
    - Danihan 9y ago
      I've only invested in five stocks. Four are listed above, the fifth was basically an OTC penny stock in 2009 that eventually went out of business.
  - noobhacker 9y ago
    The typical argument why traders don't make money is not that the stock market behaves as a coin flip. The argument is that, if you see "obvious momentum," many others in the market are likely to see that too, and the current stock price already factors all of that information in. Of course, it is possible that one beats the market if either 1) one has privileged information, or 2) one has exceptional insight. Both situations are possible, but rather implausible.
    - Danihan 9y ago
      I'd agree with that 100%. The coin flip example is what I was taking issue with. While it's a good illustration of survivorship bias, it does not apply to the stock market as the stock market isn't random.
  - scalesolved 9y ago
    Your reasoning seems to contradict itself, it's a very complex black box of limited internals yet you were able to still easily glean big winners? Stock picking is the same as gambling, you look for value and try overtime to beat the market. Also like gambling is how people remember and talk about their wins but forget/ignore their losses.
    - Danihan 9y ago
      Because I don't look at the internals, I look at the outcomes. Eg - Everyone using google, everyone eating at Chipotle, everyone being addicted to cell phones, etc.
      - martijndwars 9y ago
        Picking stocks based on "everyone uses..." is a great example of a bubble. What about all the companies that are not consumer facing?
        prewett 9y ago
        A bubble is "everyone buying because everyone knows someone will buy even higher." "Everyone uses..." is a great example of a revenue generator. I assume you are meaning that you buying based on popularity of places you frequent is an example of an echo chamber? Regarding non-consumer facing companies, I don't see what the problem is. If you have no information about the company, then it's gambling to buy it. So you miss out on some companies, no big deal. Most people only have enough money to make a few bets, so you should bet on what you know about. It's not like a test where you lose points if you don't answer a question; you don't lose money if you don't buy a stock you don't know about.
    - charlesdm 9y ago
      Think about it differently though. He didn't really pick stocks, he picked well established products or brands that started doing or (despite a correction) continued to do well. If the market would crash 30-50% tomorrow, which stocks would you buy? Probably Google, Apple, Facebook, Amazon, and the likes. Everyone has losses, and you can't always be right. But within your area of expertise or interests, you should probably be able to pick a few good stocks of good companies because you actually care and understand how they operate. But to do it structurally and consistently is harder. I'm sure someone will reply bullshit, but that's at least what I believe. The market isn't efficient.
  - brianpgordon 9y ago
    > It's fairly easy to see when a company is eating everyone else's lunch. If it's so easy, then everyone would be buying the stock and it would be pushed up. Then you're risking buying an overpriced stock that's not going to be able to deliver on the expectations required for it to pay off. Amazon is clearly eating everyone else's lunch in its domains but then it's trading at over 275 times earnings. It's not remotely obvious that you should buy Amazon stock at that price.
    - Danihan 9y ago
      Tesla is a good example of that. Much riskier investment. I've personally invested all my capital into my own ventures at this point, so I haven't really thought much about the next big thing, stock-wise. But, short answer, look around at what products people (or businesses) are addicted to now that they weren't two years ago. Not many people I know are addicted to Teslas. And Amazon was just as addictive two, or even five years ago. So it's well past its prime now (lol).
      - charlesdm 9y ago
        Tinder is doing great with millennials. Match Group stock is up 100% YoY.
pfarnsworth 9y ago
Stories about buying stocks is utterly useless. When did you sell? And what is you track record of wins vs losses?
brianpgordon 9y ago
That kind of stock picking is dangerous. First, it's easy to look around your little bubble and see that people are lining up at your local Chipotle or that people use Google for solving tech support problems, and conclude that Chipotle and Google are taking off. They may be not be doing as well in other locales/sectors. And second, how do you know that these signs of promise aren't already priced in? If you can see signs that Chipotle is doing well, so can everyone else. And they have deeper pockets and better information-gathering capabilities than you do. Nowadays satellite imaging and computer vision are used to count the number of cars in parking lots of retailers to predict earnings! Lastly, there are innumerable complicating factors that the average retail investor has no idea how to account for. Maybe the stock price is low because their EBITDA is barely staying ahead of debt service payments. Did you read the SEC filings? Maybe they're having difficulties scaling their supply chain because they lost a big contract with a major supplier. Do you know enough about the domain to account for how much that should affect the stock price? Who knows, maybe there's even a seasonality factor to the number of people who go to eat spicy food, and your guesstimates will fall apart in 6 months. I wouldn't even bother with this kind of investing. It's just gambling. If you seem to be winning over time it's either because you're lucky or because the markets are going up in general. So just invest in index funds- you'll have lower volatility and you won't be betting against people who have nothing to do but sit around all day thinking about how to beat you.
- Danihan 9y ago
  I'm sure you're correct, all stock picking is dangerous though. I'd assert that my style is the least dangerous. > look around your little bubble I didn't (and don't) have a bubble. In fact, I frankly despise the Bay Area and SV because it constantly tries to put you in a liberal / wealthy bubble. >If you can see signs that Chipotle is doing well, so can everyone else. Apparently not, though. They doubled on IPO but most people were still VERY skeptical of them. I could see that they had 100% solved the problem of "fast casual" service. >Nowadays satellite imaging and computer vision are used to count the number of cars in parking lots of retailers to predict earnings! That should make you want to invest in the #1 company that manufactures satellite components.
  - 9y ago
nkrisc 9y ago
How many losers have you picked?
- deleted 9y ago
  [deleted]
georgeecollins 9y ago
Your last five stock picks were winners. And yet strangely, every academic study done on this indicates that the chances your sixth pick outperforms the market is the same as someone whose last five picks are losers. I know it seems strange, but you are a living example of the lucky coin flipper analogy.
kcorbitt 9y ago
...Google's IPO was late 2004.
modfodder 9y ago
Are those the only stocks you have picked? Have you picked any that didn't do as well? Or any that were losers? What led you to miss on Apple or Priceline?
- Danihan 9y ago
  I picked one OTC penny stock loser in 2009 that went completely out of business. Something associated with vertical farming. I missed out on Apple because almost NOBODY used Apple in the Midwest in the mid 2000's -- everything was MS. That's a great example of me living in a bubble (which I just said in another comment that I didn't, but there ya go) I missed out on Priceline even though the tech support center I was working in had a whole division dedicated to doing their customer support! Basically, they just never seemed "legit" to me, they seemed like a scam, who the hell wants to "choose your own price" for something important like a flight and then wait and see if it gets accepted? Very weird to me. People also never seemed too excited about them in general... extremely hard to predict they would become the acquisition masters that they did. Both solid examples of blind spots in my strategy.
  - donarb 9y ago
    “Everyone using their tech support” doesn’t appear to be a viable purchasing decision for a company’s stock.
oaijdsfoaijsf 9y ago
Those are all your stock picks in the last fifteen years? No losers at all?
phlipski 9y ago
How'd you miss on Domino's Pizza? Could have picked it up for about $5/share back in November of 2008. Closed at $178 today. You'd be up about 3460% in 9 years. Google (+574%), Amazon (+2000%), or Chipotle (+350%) can't touch that - assuming you bought all three in November of 2008 and sold today.
- Danihan 9y ago
  I had no idea Dominos outperformed the rest of the food industry to that extent. Sort of crazy.
timdierks 9y ago
Buying Google pre-IPO is a very clever trade, you must be a market wizard.

ryandrake 9y ago

That a great example of survivorship bias! Take a successful outcome and look back for decisions that must have led to it. This ignores the people who also "saw the obvious" in 2003, 2008, and 2014 who lost their shirt.

Danihan 9y ago
The issue with your argument is pretending the stock market is similar to a coin flip. That's a very facile comparison. In reality each company is a very complex black box in which you can only see very limited internals. The examples I listed were not random chance. They are companies that had absolutely dominated their market positioning and were later massively rewarded for doing so. It's fairly easy to see when a company is eating everyone else's lunch. Again, it isn't just random chance. It also isn't rocket science..
- golangnews 9y ago
  Please tell us about your big failures as well - statistically you must have had some, and I’m sure you’ve been tracking them with equal rigour?
  - Danihan 9y ago
    I've only invested in five stocks. Four are listed above, the fifth was basically an OTC penny stock in 2009 that eventually went out of business.
- noobhacker 9y ago
  The typical argument why traders don't make money is not that the stock market behaves as a coin flip. The argument is that, if you see "obvious momentum," many others in the market are likely to see that too, and the current stock price already factors all of that information in. Of course, it is possible that one beats the market if either 1) one has privileged information, or 2) one has exceptional insight. Both situations are possible, but rather implausible.
  - Danihan 9y ago
    I'd agree with that 100%. The coin flip example is what I was taking issue with. While it's a good illustration of survivorship bias, it does not apply to the stock market as the stock market isn't random.
- scalesolved 9y ago
  Your reasoning seems to contradict itself, it's a very complex black box of limited internals yet you were able to still easily glean big winners? Stock picking is the same as gambling, you look for value and try overtime to beat the market. Also like gambling is how people remember and talk about their wins but forget/ignore their losses.
  - Danihan 9y ago
    Because I don't look at the internals, I look at the outcomes. Eg - Everyone using google, everyone eating at Chipotle, everyone being addicted to cell phones, etc.
    - martijndwars 9y ago
      Picking stocks based on "everyone uses..." is a great example of a bubble. What about all the companies that are not consumer facing?
      - prewett 9y ago
        A bubble is "everyone buying because everyone knows someone will buy even higher." "Everyone uses..." is a great example of a revenue generator. I assume you are meaning that you buying based on popularity of places you frequent is an example of an echo chamber? Regarding non-consumer facing companies, I don't see what the problem is. If you have no information about the company, then it's gambling to buy it. So you miss out on some companies, no big deal. Most people only have enough money to make a few bets, so you should bet on what you know about. It's not like a test where you lose points if you don't answer a question; you don't lose money if you don't buy a stock you don't know about.
  - charlesdm 9y ago
    Think about it differently though. He didn't really pick stocks, he picked well established products or brands that started doing or (despite a correction) continued to do well. If the market would crash 30-50% tomorrow, which stocks would you buy? Probably Google, Apple, Facebook, Amazon, and the likes. Everyone has losses, and you can't always be right. But within your area of expertise or interests, you should probably be able to pick a few good stocks of good companies because you actually care and understand how they operate. But to do it structurally and consistently is harder. I'm sure someone will reply bullshit, but that's at least what I believe. The market isn't efficient.
- brianpgordon 9y ago
  > It's fairly easy to see when a company is eating everyone else's lunch. If it's so easy, then everyone would be buying the stock and it would be pushed up. Then you're risking buying an overpriced stock that's not going to be able to deliver on the expectations required for it to pay off. Amazon is clearly eating everyone else's lunch in its domains but then it's trading at over 275 times earnings. It's not remotely obvious that you should buy Amazon stock at that price.
  - Danihan 9y ago
    Tesla is a good example of that. Much riskier investment. I've personally invested all my capital into my own ventures at this point, so I haven't really thought much about the next big thing, stock-wise. But, short answer, look around at what products people (or businesses) are addicted to now that they weren't two years ago. Not many people I know are addicted to Teslas. And Amazon was just as addictive two, or even five years ago. So it's well past its prime now (lol).
    - charlesdm 9y ago
      Tinder is doing great with millennials. Match Group stock is up 100% YoY.

pfarnsworth 9y ago

Stories about buying stocks is utterly useless. When did you sell? And what is you track record of wins vs losses?

brianpgordon 9y ago

That kind of stock picking is dangerous. First, it's easy to look around your little bubble and see that people are lining up at your local Chipotle or that people use Google for solving tech support problems, and conclude that Chipotle and Google are taking off. They may be not be doing as well in other locales/sectors. And second, how do you know that these signs of promise aren't already priced in? If you can see signs that Chipotle is doing well, so can everyone else. And they have deeper pockets and better information-gathering capabilities than you do. Nowadays satellite imaging and computer vision are used to count the number of cars in parking lots of retailers to predict earnings! Lastly, there are innumerable complicating factors that the average retail investor has no idea how to account for. Maybe the stock price is low because their EBITDA is barely staying ahead of debt service payments. Did you read the SEC filings? Maybe they're having difficulties scaling their supply chain because they lost a big contract with a major supplier. Do you know enough about the domain to account for how much that should affect the stock price? Who knows, maybe there's even a seasonality factor to the number of people who go to eat spicy food, and your guesstimates will fall apart in 6 months. I wouldn't even bother with this kind of investing. It's just gambling. If you seem to be winning over time it's either because you're lucky or because the markets are going up in general. So just invest in index funds- you'll have lower volatility and you won't be betting against people who have nothing to do but sit around all day thinking about how to beat you.

Danihan 9y ago
I'm sure you're correct, all stock picking is dangerous though. I'd assert that my style is the least dangerous. > look around your little bubble I didn't (and don't) have a bubble. In fact, I frankly despise the Bay Area and SV because it constantly tries to put you in a liberal / wealthy bubble. >If you can see signs that Chipotle is doing well, so can everyone else. Apparently not, though. They doubled on IPO but most people were still VERY skeptical of them. I could see that they had 100% solved the problem of "fast casual" service. >Nowadays satellite imaging and computer vision are used to count the number of cars in parking lots of retailers to predict earnings! That should make you want to invest in the #1 company that manufactures satellite components.
- 9y ago

nkrisc 9y ago

How many losers have you picked?

deleted 9y ago
[deleted]

georgeecollins 9y ago

Your last five stock picks were winners. And yet strangely, every academic study done on this indicates that the chances your sixth pick outperforms the market is the same as someone whose last five picks are losers. I know it seems strange, but you are a living example of the lucky coin flipper analogy.

kcorbitt 9y ago

...Google's IPO was late 2004.

modfodder 9y ago

Are those the only stocks you have picked? Have you picked any that didn't do as well? Or any that were losers? What led you to miss on Apple or Priceline?

Danihan 9y ago
I picked one OTC penny stock loser in 2009 that went completely out of business. Something associated with vertical farming. I missed out on Apple because almost NOBODY used Apple in the Midwest in the mid 2000's -- everything was MS. That's a great example of me living in a bubble (which I just said in another comment that I didn't, but there ya go) I missed out on Priceline even though the tech support center I was working in had a whole division dedicated to doing their customer support! Basically, they just never seemed "legit" to me, they seemed like a scam, who the hell wants to "choose your own price" for something important like a flight and then wait and see if it gets accepted? Very weird to me. People also never seemed too excited about them in general... extremely hard to predict they would become the acquisition masters that they did. Both solid examples of blind spots in my strategy.
- donarb 9y ago
  “Everyone using their tech support” doesn’t appear to be a viable purchasing decision for a company’s stock.

oaijdsfoaijsf 9y ago

Those are all your stock picks in the last fifteen years? No losers at all?

phlipski 9y ago

How'd you miss on Domino's Pizza? Could have picked it up for about $5/share back in November of 2008. Closed at $178 today. You'd be up about 3460% in 9 years. Google (+574%), Amazon (+2000%), or Chipotle (+350%) can't touch that - assuming you bought all three in November of 2008 and sold today.

Danihan 9y ago
I had no idea Dominos outperformed the rest of the food industry to that extent. Sort of crazy.

timdierks 9y ago

Buying Google pre-IPO is a very clever trade, you must be a market wizard.