6 ms·

>When stocks took a 30%+ dip in March, it was basically free money to buy them In March, people were speculating a world-wide depression due to the pandemic an

>When stocks took a 30%+ dip in March, it was basically free money to buy them In March, people were speculating a world-wide depression due to the pandemic and hoarding toiletries. People who saw it as free money were, uh, incredibly optimistic.

madamelic 6y ago
I traded on the thesis of "I don't care, I'll wait". I mean, either money becomes worthless to have or the stock market goes back up. To me, it seems the upside of _not_ trading is much smaller than the upside of betting that the market will go back up eventually like it has every time so far. I have a very tiny (10 shares) amount in cruise lines. The shares were $150 / share pre-COVID, I bought them for $30 / share. So my downside is $300 (minus tax benefits) but my upside is $1,200 (minus taxes). Nothing changed about those companies except having to weather the pandemic. I even made $70 on call options in a week for the same company. Definitely not trying my luck again but it was an education.
- vsareto 6y ago
  >I mean, either money becomes worthless to have or the stock market goes back up. It could have just remained low for a long period, and you may have been forced to cash out to stay off the street depending on how much you put up. No one was able to predict it in March.
  - ghiculescu 6y ago
    Given he put up $300 I doubt it's a real concern.
    - vsareto 6y ago
      People putting up money they can afford to lose just don't care about the risk, but that risk-free attitude is somehow getting into mainstream investing advice.
recursive 6y ago
If you're going to criticize someone's outlook, it's probably worth mentioning that they were actually correct.
- vsareto 6y ago
  I mean, if it was easy to call it as free money back in March, then clearly everything is even more-so free money today. The prevailing logic just seems to be "never not buy stocks at any point"
  - raziel2701 6y ago
    Within the context of wallstreetbets the prevailing logic and thesis as to why you should buy the dip after the March crash was simply: "Money printer goes brrr" and "stonks only go up".
hungryforcodes 6y ago
"Buy when there is blood in the streets..."
JakeTheAndroid 6y ago
If you take a look at 10 or 30 year trends then it's not really that optimistic at all. For instance, Detla Airlines was at 60 bucks a share before things tanked. There was talk about airline bailouts etc. I bought it at around 20 dollars a share. This was the riskiest stock I purchased as it was theoretically possible they'd completely dissolve. But, at 20 dollars a share Delta should eventually go back up to 60. It might take 10 years for Delta to get back to 40 but it'd still be profit. Anyone trading on a time scale of less than a few years is basically always optimistic. Buy and hold is generally the safest strategy. And the famous quote is timing in market beats timing into the market. In March you were able to effectively get on both trains simultaneously.
- vsareto 6y ago
  To me, this is the kind of thinking that justifies today's blinders about it: it basically can never go down for extended periods because people always buy the dip, but also the government will also always support struggling companies if a crisis happens and companies traded on the stock market have no risk to be dissolved. Essentially that means there's not any real risk to investing now apart from options or penny stocks. I mean, congrats, we might've eliminated risk, but surely something else has to give to support that.
  - JakeTheAndroid 6y ago
    Well, with things like inflation these stocks HAVE to go up. A dollar in 2022 is stronger than a dollar in 2020 so stocks need to AT LEAST outpace inflation to make it worthwhile at all. Now, government bailouts is a different can of worms and I am not entirely sure my opinion on that. Generally I would have to say I am against it, as it doesn't actually favor businesses that can properly adapt to the markets and new blockers. But, things like dropping the fed rate to encourage consumer spending does seem okay to me. If we removed bailouts then there would be risk involved. And there is still risks involved in stocks. Not all stocks only go up. Nikola is basically a pump and dump scheme that likely wont be around in 3 years to grow with the rest of your portfolio. Plenty of companies seem flash growth and then equalize down to something more reasonable. However, in general, if you buy diverse stocks and ETFs or index funds you should only see it go UP over 10-20 years. You will have dips, and you can even have a recession. The people most impacted by dips in stocks are people trying to retire during that retraction period. What you described seems to be like intuition though. Stocks are high, people can't afford them and they cannot see a lot of growth. When stocks drop you can capture more growth potential for cheaper. So it seems like a natural progression that people would buy back into the markets, thus helping the markets stabilize.

madamelic 6y ago

I traded on the thesis of "I don't care, I'll wait". I mean, either money becomes worthless to have or the stock market goes back up. To me, it seems the upside of _not_ trading is much smaller than the upside of betting that the market will go back up eventually like it has every time so far. I have a very tiny (10 shares) amount in cruise lines. The shares were $150 / share pre-COVID, I bought them for $30 / share. So my downside is $300 (minus tax benefits) but my upside is $1,200 (minus taxes). Nothing changed about those companies except having to weather the pandemic. I even made $70 on call options in a week for the same company. Definitely not trying my luck again but it was an education.

vsareto 6y ago
>I mean, either money becomes worthless to have or the stock market goes back up. It could have just remained low for a long period, and you may have been forced to cash out to stay off the street depending on how much you put up. No one was able to predict it in March.
- ghiculescu 6y ago
  Given he put up $300 I doubt it's a real concern.
  - vsareto 6y ago
    People putting up money they can afford to lose just don't care about the risk, but that risk-free attitude is somehow getting into mainstream investing advice.

recursive 6y ago

If you're going to criticize someone's outlook, it's probably worth mentioning that they were actually correct.

vsareto 6y ago
I mean, if it was easy to call it as free money back in March, then clearly everything is even more-so free money today. The prevailing logic just seems to be "never not buy stocks at any point"
- raziel2701 6y ago
  Within the context of wallstreetbets the prevailing logic and thesis as to why you should buy the dip after the March crash was simply: "Money printer goes brrr" and "stonks only go up".

hungryforcodes 6y ago

"Buy when there is blood in the streets..."

JakeTheAndroid 6y ago

If you take a look at 10 or 30 year trends then it's not really that optimistic at all. For instance, Detla Airlines was at 60 bucks a share before things tanked. There was talk about airline bailouts etc. I bought it at around 20 dollars a share. This was the riskiest stock I purchased as it was theoretically possible they'd completely dissolve. But, at 20 dollars a share Delta should eventually go back up to 60. It might take 10 years for Delta to get back to 40 but it'd still be profit. Anyone trading on a time scale of less than a few years is basically always optimistic. Buy and hold is generally the safest strategy. And the famous quote is timing in market beats timing into the market. In March you were able to effectively get on both trains simultaneously.

vsareto 6y ago
To me, this is the kind of thinking that justifies today's blinders about it: it basically can never go down for extended periods because people always buy the dip, but also the government will also always support struggling companies if a crisis happens and companies traded on the stock market have no risk to be dissolved. Essentially that means there's not any real risk to investing now apart from options or penny stocks. I mean, congrats, we might've eliminated risk, but surely something else has to give to support that.
- JakeTheAndroid 6y ago
  Well, with things like inflation these stocks HAVE to go up. A dollar in 2022 is stronger than a dollar in 2020 so stocks need to AT LEAST outpace inflation to make it worthwhile at all. Now, government bailouts is a different can of worms and I am not entirely sure my opinion on that. Generally I would have to say I am against it, as it doesn't actually favor businesses that can properly adapt to the markets and new blockers. But, things like dropping the fed rate to encourage consumer spending does seem okay to me. If we removed bailouts then there would be risk involved. And there is still risks involved in stocks. Not all stocks only go up. Nikola is basically a pump and dump scheme that likely wont be around in 3 years to grow with the rest of your portfolio. Plenty of companies seem flash growth and then equalize down to something more reasonable. However, in general, if you buy diverse stocks and ETFs or index funds you should only see it go UP over 10-20 years. You will have dips, and you can even have a recession. The people most impacted by dips in stocks are people trying to retire during that retraction period. What you described seems to be like intuition though. Stocks are high, people can't afford them and they cannot see a lot of growth. When stocks drop you can capture more growth potential for cheaper. So it seems like a natural progression that people would buy back into the markets, thus helping the markets stabilize.