6 ms·
I Lost $150K in a Day
- easton 5y agoAn unusual post for Hacker News in that the $150K lost in a day isn't because someone left a few too many NAT Gateways running in AWS.
- hwers 5y agoEver since HN allowed non technical news I find it actually kind of rare to have a high percent chance what I clicked on be related to coding. I see it more like an alt reddit nowadays.
- dang 5y agoHN has always allowed non technical news. The only criterion is that it gratify intellectual curiosity. Actually, this particular type of article (sensational business-related blog post, let's call it) used to appear a lot more than it does today. Note that it got flagged in this case.
- api 5y ago
- maxerickson 5y agoBack in the never days. https://news.ycombinator.com/front?day=2010-02-01 https://news.ycombinator.com/front?day=2010-02-01
- mooreds 5y agohttps://hn.algolia.com/?q=hn+turning+reddit https://hn.algolia.com/?q=hn+turning+reddit
- iratewizard 5y agoI agree that HN has for a long time been focused on interesting and illuminating posts. The past several years, though, have been marked with reddit refugees, far fewer interesting posts, and far more average midwit discussion. If you go through the comment section on posts from 10 years ago, you'll find a higher concentration of posts from C-level execs, startup founders, and experts with deep domain knowledge.
- blowski 5y agoFrom the guidelines: > Please don't post comments saying that HN is turning into Reddit. It's a semi-noob illusion, as old as the hills. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- dijonman2 5y agoI think if the person commenting truly believes it and has other substantive points the rules can and should be bent.
- nohankyou 5y agoI agree, this place has turned to trash.
- karmakaze 5y ago> Nov 6, 2009 | on: Ask HN: Is it just me, or are HN comments becoming... > I'm at a year and a half. Hacker News is turning into Reddit. It's following the exact same path, albeit thankfully slower, and the causes behind that path—influx of users, need for attention, karma lust—aren't causes that Paul is looking to fix. > Reddit's not the worst thing in the world, but make no mistake, we're headed there. I can't say I disagree.
- ameliaquining 5y agoI was curious about the history of this, so I checked on the Wayback Machine. Originally (at least as of July 2014, the earliest archived date), this rule had an "if your account is less than a year old" clause. The rule went away entirely in August 2017, and then came back again in November 2018 without the clause.
- stjohnswarts 5y agolol that's what I tell my friends: "imagine reddit with good moderation with much improved signal to noise ratio". Which I guess upon reflection of typing that isn't reddit at all, but my powers of description are very limited as I didn't do well in my writing classes.
- msoad 5y agoI was guessing some sort of cryptocurrency mistake story
- xyzzyz 5y agoThis guy bet on red, won, then bet on black, won a few more times, and then lost when the roulette hit red. Why is it interesting?
- zydex 5y agoAlmost exactly what I was going to say. Nothing of interest here, gambler gambles with the most effective gambling vehicle of this generation.
- amelius 5y agoSame reason why Bitcoin and other cryptocurrencies are interesting, I suppose. Anyway, it's refreshing to read a story with loser-bias for a change, as opposed to survivor-bias which we get here by the dozens.
- forgotpwd16 5y agoThey ended up with big profit, 2x their salary at that, even after the loses so can hardly call it a loser-bias.
- Tepix 5y agoThe most interesting part was where he realized that his life had turned into watching the financial market 24/7 and he was happy to get out.
- api 5y ago“Someone will win big in the casino. It won’t be you.”
- orzig 5y agoI think he does a decent job of discussing the psychology of it. I've been following this stuff SPAC/WSB through Bloomberg et al and they can't really put themselves into the headspace of the traders like this (or even get significant quotes), so it's the first time I've heard a deep explanation for "What are they thinking?"
- logicalmonster 5y ago
- mrits 5y agoIt's safe to say that most engineers with a 401K and 20+ years experience gained and lost a lot more than $150K in a day several times in the last few years. This is extremely uninteresting.
- endisneigh 5y agohow much money do you think "most engineers" with a 401K and 20+ years experience have in their 401k? and what has been the largest single day swing in SPY in the past 5 years?
- tjader 5y agoTwo years ago the S&P 500 fell 12% in one day. You'd need about $1,250,000 invested in it to lose $150,000 in that day. That doesn't sound like an unlikely balance for a 401K after 20 years to me.
- mooreds 5y agoI read up until he mentioned reading wallstreetbets. Then I thought, "yup, another reason to avoid active trading, which I already know in my bones is a poor use of my time, money and energy" and stopped reading.
- rfd4sgmk8u 5y agoI agree, however this story is about options, which are realized gains or losses. Real actual losses on other gains, in which you may not have put aside for tax. This can be a real problem. The fluctuations on a 401K really are only significant if it occurs during a time in which you are relying on those funds, near or at or during retirement. Nobody with a 401K 'lost' anything in the last few years unless they withdrew from it.
- throwbacktictac 5y agoDon't realized gains followed by realized losses within the same tax period offset each other?
- j4yav 5y agoThis is just gambling, no?
- npilk 5y agoI appreciate how the author captures the mindset involved in this kind of trading. I would cash out if I had 6,000% gains, but that same mindset is what prevents me from getting 6,000% gains in the first place, because I’d never go all-in on a risky trade. Then again, that mindset also prevents me from losing all my money.
- ljm 5y agoI sometimes wonder, "what if I put that money I had lying around into crypto or GME," then I realise pretty much the same as you. Not only am I late to the game, I just don't have the same relationship with money that these people do. I'm cool with that.
- redisman 5y agoI had that phase but luckily I was a poor teenager. So I would spend my $50-$1000 I could scrape together per month from odd jobs and allowance on scratch tickets, online gambling, etc. Getting my first real salary made me realize how dumb it was as a way to “make money”
- newhotelowner 5y agoI have been holding NFLX & TSLA for the last 10 years. Every time, the stocks reached all time high, i became greedy and changed my target date to sell. Now NFLX is down crazily and waiting for TSLA to split again. 10000% gains and I will sell it.
- lampington 5y agoIf a stock I own ever doubles, I sell half and put the proceeds into an index tracker. Knowing that I've got the money back and it's (relatively) safe makes it much easier for me to be rational about how I treat the remainder. Obviously that might just be my own mindset...
- Ozzie_osman 5y agoThe recent frenzy in SPACs, meme stocks, NFTs don't make sense until you realize people aren't buying investments. They are buying entertainment and hope. It's all a big casino, and people don't act rationally in casinos.
- adam_arthur 5y agoThe market for growth tech/speculative stocks has been irrational for almost a decade now. New metrics always being invented to justify this/that, but plenty of stocks were at 100x Price Sales just a few months ago... Which pretty much never will make sense for a decently sized company. Yet somehow the FAANGs which are effective monopolies sit at 20-30 PE, while Costco is at 45. The market is not efficient at all, and I don't know if it's just blind index investing, herd behavior in fund managers or what. Seems to me we need a real correction to flush a lot of the idiocy out of the market. The government has supported speculators at every turn since the GFC, which is creating a weird moral hazard, most prominently now in housing. Fortunately inflation has forced their hand, and 10y rising even to 3-4%, and mortgages to 6% will crush most of the speculation.
- lanstin 5y agoCostco pays dividends. Without dividends, stock is mostly worthless except for the speculative aspect. A Google that paid dividends would be a sound investment, if you neglect the social externalities, and would burst up thru the PE ratios.
- adam_arthur 5y agoIntrinsic value of stocks comes from dividends or the potential for future dividends. Any stock that doesn't pay a dividend could pay one in the future from their earnings/cash flow. So even stocks without dividends have a measurable intrinsic value
- libertine 5y agoIt's gambling. In fact it would be a cool subject for some study to see if there's a link between gambling and it's motivations/addictions and these type of products (including some trading cards). My uneducated guess is that the motivation for collectors and gamblers are quite different.
- polote 5y ago> But most traders aren't good. And it's almost impossible to know if you're good anyway. It is easy actually. Do you consistently (over several years) beat the reference index ? Then you are good.
- btdmaster 5y ago*After fees.
- adhesive_wombat 5y ago"Past performance is not a predictor of future performance" is a legally required disclaimer for a reason.
- pxmpxm 5y agoIf you hold a large dice rolling competition, the person that wins will have rolled nothing but sixes in row. Retail people discovering leverage in deriv contracts will naturally sort itself out in the long run.
- b112 5y agoThe market is more like poker, than dice. Information can change the outcome, the odds, but you are toast if the wrong cards come up.
- logifail 5y ago> Do you consistently (over several years) beat the reference index ? [after fees] Most fund managers don't achieve this: "Most active fund managers in the US failed to beat the market over the past year, according to another dispiriting report on an industry that often claims it will come into its own during periods of volatility."[0] An a complete outsider to that field, I'm curious how (and why) they keep their jobs. [0] https://www.ft.com/content/7e4c0d91-8b6d-419b-9be3-80131d5cb462 https://www.ft.com/content/7e4c0d91-8b6d-419b-9be3-80131d5cb...
- raydiatian 5y agoWhat makes this post ”interesting” is the fact that OP chose stonks over BTC/ETH. If it were good crypto, $150k isn’t gone, it’s just on vacation.
- Tepix 5y agoTell that to the people who bought tokens featured on rekt.news.
- raydiatian 5y agoBitcoin and Ethereum? Sounds like they bought high and panicked at a 50% drop. Plenty of documentation that this approach is guaranteed to fail, and always corrects in a few years. Appreciate the downvotes.
- fullshark 5y ago> Maybe you only trade for a few hours during the day, but the market will plant roots in your subconscious. You'll be thinking about it, even if you aren't actively playing it. I was thinking about this re: knowledge work. It's pretty much impossible for it to be a 40 hour a week job, as you will be thinking about the problems and working through them all the time, in bed, while exercising, whenever. It can become all consuming.
- tonguez 5y ago“Now let's take a step back. I had effectively turned $6k into $400k as a 23 year-old. That is absolutely, positively, ridiculous.” self-congratulatory and boring
- xwdv 5y agoIt’s crazy that Millennials and Gen Zs are already some of the poorest generations in recent history, and then on top of that bad investment decisions like this end up making them even poorer for life. God damn, I feel like growing up we leaned too hard on hokey “Money can’t buy happiness” or “Money isn’t everything” narratives, and thus people never prioritized making as much money as possible. Now so many problems faced by these younger generations all have a common denominator: not enough money. That’s why we see these risky gambles and moonshots and digital pyramid schemes. My message to future generations would be this: You need money, you need a LOT of money. There are many amazing things in this world but they will all be out of reach for you if you do not have money. If you’re not making enough money, you’re doing something wrong, and the longer you’re in that state the worse off you will be. Get money.
- pxmpxm 5y agoI would expect this to be a consequence of the "do what you love" mentality that seems to be popular of late, especially when coupled with irrational educational decisions ($250k for a social work degree at NYU etc). It's almost as if the "oh i actually need money" epiphany only happens later in life and leads to the dynamic you mentioned.
- xwdv 5y agoYou can do what you love but does what you do love you back? Clearly not if it makes you destitute.
- vinyl7 5y agoFrom my perspective as a millennial...it's because getting enough money seems like an impossible task. Salaries at companies are not keeping up with inflation, it is difficult to get a higher paying job. Companies don't reward loyalty. Housing and rent are increasing at an absurd rate. We're getting married in our 30s+ (if we get married, a lot of people in my generation don't want to start a family) rather than starting a family in the early 20s like older generations did so there's not much need for money. It increasingly seems like hard work and effort are not rewarded. And so life for millennials and younger is way different than it was for boomers and older. Life is more like being a vagabond rather than the stereotypical financially-successful family-oriented life of older generations. I blame the social breakdown over the last two decades and I blame the failed economy. Just have to live life day-by-day and whatever happens, happens.
- NKosmatos 5y agoI know that this comment is going to get heavily downvoted, but why is this interesting? Teen greed, paired with arrogance and disrespect for the money he “earned” :-(
- personjerry 5y agotldr: Inspired by wallstreetbets, I gambled on securities and lost. Subscribe to my newsletter!
- ziml77 5y agoBasically. Though I've seen worse on wsb. Some dude inherited 200k from his grandmother and lost it all. He had half of it in a single stock for some used car sales company. His logic? He liked them and got a good deal on his car from them (others pointed out that they actually have bad prices...)
- de_keyboard 5y agoI really enjoyed this piece, and it is probably more interesting than the comments (you know who you are). The quote at the end is a great take-away. How do you know you are good at trading or just got lucky? How long will it take to work that out? And is it worth the energy?
- jackraines30 5y agoThank you! (I'm the author of the piece haha)
- qwertox 5y ago> Ironically, losing $250K was the best thing that ever happened to me. > And the craziest part about it? I was still up more than $100K in a year and a half. Not too bad. Why is this on HN?
- it_citizen 5y agoQuestion from someone that has never played with stocks: when someone like the writer or some random friend tells me that stock X is undervalued or overvalued, do they really have any objective way to evaluate that? What do they think they know over other people that are willing to sell the stock to them? Over the past two years I have seen more and more friends starting to do day trading, some of them even waking up hours earlier before work to read about stocks and organize their trades for the day. Is this really just irrational gambling with extra steps? And if so, why aren’t those people, which I consider pretty reasonable otherwise, are led to believe their reasoning and knowledge will give them an edge.
- Flankk 5y agoYou can evaluate long-term value by doing your due diligence by researching the company's strategy and financials. You can tell if a stock is undervalued by calculating its price to earnings ratio. Day trading is gambling. Valuation and long-term forecast is irrelevant to a day trader. Stocks constantly fluctuate and gains on one time scale can be losses on another. This is just one reason a seller of an undervalued stock is not necessarily stupid.
- enos_feedler 5y agoI had a friend Dan and we both worked on the same team at Google. He figured out this idea where he sold SPY puts each month to generate enough income to live. Covid tanked the market temporarily as this story touches on and he lost everything. Turns out he was leveraged as well and got margin called. I think he was playing with around $300k in real capital. He filed for bankruptcy last year. Its tempting to think we can outsmart the market there are so many of these stories. The funny thing is I also quit Google shortly after Dan did and independently had been trading stocks to live as well. Fortunately I started as a result of the pandemic dropping the market. Once I started raking in money, I left the job. I know of Dans story bc I went to him for advice. I thought he was still in it. His story was a reality check and made me somewhat more cautious. But really only in the back of my mind sitting next to another question: “when is it my time? When will I need to back to work bc I have nothing?”
- IAmGraydon 5y agoI’ve been able to extract 6 figures per year for the last 3 years in the options market. This year may end up at 7 figures. I’m also well aware that I could lose it all. We’ll see. The basis of what I do is look for irrational behavior of the masses, patiently wait for the realization of truth to start spreading and buy long dated options into it. The real challenge is knowing and recognizing your own cognitive biases and understanding that almost every human shares the same biases. So in knowing yourself, you can know the irrationalities of the masses and the next realization they will come to. This is an incredibly important tool. Another is patience. Short dated options will kill your account. It’s only a matter of time.
- bradleyjg 5y agoQuod cito acquiritur cito perit.
- deleted 5y ago[deleted]
- Shadonototra 5y agoOur civilization is very not worth defending, hopefully my next simulation will bring a better universe
- joeman1000 5y agoI like the article, but for the author to say they’ve ‘mastered’ the markets at 23 is just laughable. He’s doing a higher level of /biz/ trading which is essentially betting based on memes and sentiment. This is gambling. Anything other than value investing is gambling.
- intherdfield 5y agoHe didn't mean that literally. It's a tongue in cheek way of saying "when you're a 23 year old and you think you've mastered the markets, you don't think about wealth preservation." Original quote: "When you have mastered the market at 23 years old, and you're up 6000% in less than a year, you don't think about wealth preservation."
- jackraines30 5y agoAs the author of this piece, I wanted to thank you for sharing it here. It is interesting reading some of the comments, a lot of negativity floating around on the interwebs I suppose.