6 ms·

> 1 is a 10x winner out of 10 stocks, 1 being a 10x winner is an absolutely rarity and the fact that you would manage to pick it is pure luck tbh.

by chii 2y ago

WalterBright 2y ago
QQQ is up 5x in 10 years. Being an ETF, that means many of its components must be 10x. I suppose it's dependent on your time horizon. MSFT is up around 10x since Nadella took over. It's more common over 20 years, obviously.
- silisili 2y ago
  The other neat thing about ETFs is that there are so many similar, you can effectively use them for TLH to help offset future gains.
  - WalterBright 2y ago
    The IRS disallows wash sale deductions if you reinvest in a substantially similar investment within 30 days. I'm not an IRS agent and have no idea what they mean by substantially similar. You might want to talk to your tax accountant.
    - silisili 2y ago
      > substantially similar investment They actually use the word 'identical' instead of 'similar', if that matters. It seems to be a grey area with ETFs, and I'm not a financial advisor, so won't make any further claims. > You might want to talk to your tax accountant. Absolutely agreed. You can also just let a reputable robo do it for you if you don't have the time or energy for it, there are multiple. It is what I ended up doing. It's modest but every bit helps.
      - tenuousemphasis 2y ago
        Robo advisors are intricately familiar with tax law? That's new to me.
        Scoundreller 2y ago
        US lets you claim $3k of capital losses each against income, so a robo advisor can optimize for this
      - sgerenser 2y ago
        Indeed, the wording is “substantially identical”, which is important. 2 different ETFs that track similar, but not identical indices (e.g. S&P500 vs Russell 1000 large cap, for example) are clearly not substantially identical, and make great tax-loss harvesting pairs. There’s tons of case law, opinions from tax experts, and automated tax-loss harvesting tools from a variety of brokers that agree with this viewpoint.
    - voldacar 2y ago
      IIRC they have never defined "substantially similar" and they don't actually go after people who sell etf X and immediately buy etf Y with an identical price graph
- biminb 2y ago
  Are 'many of its components up 10x'?? Isn't it the case that a few large cap stocks have the vast majority of the growth? If you didn't like Tesla, didn't like Nvidia, didn't like big 5 tech, you might have had very mediocre returns.
chrismarlow9 2y ago
Oh there's more luck required than that. You have to get lucky many times to win at a 10x stock. - You have to be lucky enough to find it when it's cheap. - You have to be lucky enough to hold on to it even if it loses money - You have to be lucky enough to not sell it when it's at only 5x and hold off for the top - you have to be lucky enough to have bought enough initially that the return is meaningful to you These are the thoughts that made me clean up how I invest and stop thinking I'll get lucky at some point just rolling the dice. It's way more luck required than just buying in early.
- sgerenser 2y ago
  The 4th point (bought enough that the return is meaningful) is the killer one. There’s always “that guy” that brags about buying TSLA or NVDA in 2015 and having 100x his money. Then it turns out he only bought like $500 worth. Sure, $50K isn’t nothing, but it’s not going to be meaningful to the retirement of someone making tech worker wages. Of course, the reason he didn’t buy more was because he knew it was a lottery ticket and putting most of his money in the S&P500 in his 401k was obviously more prudent.
xenihn 2y ago
I've done it repeatedly over the past ten years while DCA'ing. I basically made my own custom funds with 5-10 stocks, set daily purchases for a specific amount, and didn't think about it. Unfortunately I didn't invest enough each time for the amount to be significant, and I also stopped DCA'ing as soon as I couldn't resist checking, saw that I had reached or was approaching a 10% loss in my overall DCA portfolio, and stopped the auto-buys because I felt like I was starting to burn money, when this was actually the best time to continue investing. I haven't sold anything either though. Overall I'm up 80%, which is only $50k. I think DCA is the most effective investment strategy. Unfortunately I don't have the discipline to keep it up during a downturn. Next time I try it again with picked stocks will be my 4th time, but for now, I'm doing it with index funds. I'm not going to feel as inclined to pause my purchases during an index fund downturn.
- lazide 2y ago
  Well, also the market has done almost nothing but go up over the last 10 years, correct?
  - xenihn 2y ago
    No, I went under significantly multiple times, including 80%+ losses that eventually reversed on some. Though these dips wouldn't have been as drastic if I had not stopped DCA purchases.
- kragen 2y ago
  I'm guessing "DCA" means "dollar-cost averaging": https://www.investopedia.com/terms/d/dollarcostaveraging.asp https://www.investopedia.com/terms/d/dollarcostaveraging.asp
  - eru 2y ago
    Yes, and it's silly and doesn't work.

> 1 is a 10x winner out of 10 stocks, 1 being a 10x winner is an absolutely rarity and the fact that you would manage to pick it is pure luck tbh.

by chii 2y ago

> 1 is a 10x winner out of 10 stocks, 1 being a 10x winner is an absolutely rarity and the fact that you would manage to pick it is pure luck tbh.

WalterBright 2y ago

QQQ is up 5x in 10 years. Being an ETF, that means many of its components must be 10x. I suppose it's dependent on your time horizon. MSFT is up around 10x since Nadella took over. It's more common over 20 years, obviously.

silisili 2y ago
The other neat thing about ETFs is that there are so many similar, you can effectively use them for TLH to help offset future gains.
- WalterBright 2y ago
  The IRS disallows wash sale deductions if you reinvest in a substantially similar investment within 30 days. I'm not an IRS agent and have no idea what they mean by substantially similar. You might want to talk to your tax accountant.
  - silisili 2y ago
    > substantially similar investment They actually use the word 'identical' instead of 'similar', if that matters. It seems to be a grey area with ETFs, and I'm not a financial advisor, so won't make any further claims. > You might want to talk to your tax accountant. Absolutely agreed. You can also just let a reputable robo do it for you if you don't have the time or energy for it, there are multiple. It is what I ended up doing. It's modest but every bit helps.
    - tenuousemphasis 2y ago
      Robo advisors are intricately familiar with tax law? That's new to me.
      - Scoundreller 2y ago
        US lets you claim $3k of capital losses each against income, so a robo advisor can optimize for this
    - sgerenser 2y ago
      Indeed, the wording is “substantially identical”, which is important. 2 different ETFs that track similar, but not identical indices (e.g. S&P500 vs Russell 1000 large cap, for example) are clearly not substantially identical, and make great tax-loss harvesting pairs. There’s tons of case law, opinions from tax experts, and automated tax-loss harvesting tools from a variety of brokers that agree with this viewpoint.
  - voldacar 2y ago
    IIRC they have never defined "substantially similar" and they don't actually go after people who sell etf X and immediately buy etf Y with an identical price graph
biminb 2y ago
Are 'many of its components up 10x'?? Isn't it the case that a few large cap stocks have the vast majority of the growth? If you didn't like Tesla, didn't like Nvidia, didn't like big 5 tech, you might have had very mediocre returns.

chrismarlow9 2y ago

Oh there's more luck required than that. You have to get lucky many times to win at a 10x stock. - You have to be lucky enough to find it when it's cheap. - You have to be lucky enough to hold on to it even if it loses money - You have to be lucky enough to not sell it when it's at only 5x and hold off for the top - you have to be lucky enough to have bought enough initially that the return is meaningful to you These are the thoughts that made me clean up how I invest and stop thinking I'll get lucky at some point just rolling the dice. It's way more luck required than just buying in early.

sgerenser 2y ago
The 4th point (bought enough that the return is meaningful) is the killer one. There’s always “that guy” that brags about buying TSLA or NVDA in 2015 and having 100x his money. Then it turns out he only bought like $500 worth. Sure, $50K isn’t nothing, but it’s not going to be meaningful to the retirement of someone making tech worker wages. Of course, the reason he didn’t buy more was because he knew it was a lottery ticket and putting most of his money in the S&P500 in his 401k was obviously more prudent.

xenihn 2y ago

I've done it repeatedly over the past ten years while DCA'ing. I basically made my own custom funds with 5-10 stocks, set daily purchases for a specific amount, and didn't think about it. Unfortunately I didn't invest enough each time for the amount to be significant, and I also stopped DCA'ing as soon as I couldn't resist checking, saw that I had reached or was approaching a 10% loss in my overall DCA portfolio, and stopped the auto-buys because I felt like I was starting to burn money, when this was actually the best time to continue investing. I haven't sold anything either though. Overall I'm up 80%, which is only $50k. I think DCA is the most effective investment strategy. Unfortunately I don't have the discipline to keep it up during a downturn. Next time I try it again with picked stocks will be my 4th time, but for now, I'm doing it with index funds. I'm not going to feel as inclined to pause my purchases during an index fund downturn.

lazide 2y ago
Well, also the market has done almost nothing but go up over the last 10 years, correct?
- xenihn 2y ago
  No, I went under significantly multiple times, including 80%+ losses that eventually reversed on some. Though these dips wouldn't have been as drastic if I had not stopped DCA purchases.
kragen 2y ago
I'm guessing "DCA" means "dollar-cost averaging": https://www.investopedia.com/terms/d/dollarcostaveraging.asp https://www.investopedia.com/terms/d/dollarcostaveraging.asp
- eru 2y ago
  Yes, and it's silly and doesn't work.