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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 comp

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.

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.