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**RAZRBAKK** · 07-14-2021, 05:16 AM

I'm just trying to gamble, ok?

**gabe** · 07-14-2021, 11:16 AM

Originally posted by Myrkul View Post

If $100,000,000,000 dollars can't get the job done, I sure as hell can't either. I'm going to buy and hold and just bank on the statistics that it will outperform active management over 95% of the time.

For my personal accounts, it's 100% index funds and ETFs all the way and I have never once regretted it. I check my personal performance maybe once or twice a year. Having seen 1000s of portfolio performance numbers, I can say with a great deal of confidence that sitting on my ass doing nothing has had by far better returns then any "strategy" I've ever seen. Just set your allocation right, do it cheaply, shovel as much cash as you can into it, and then walk away.

I hate to break it to ya but there's lots of hedge funds/managers/PE that beat the market on a regular basis. Lots of folks on the internet do too. Just because it's a large industry doesn't mean that the small guys can't win. Just look at the reversal in roles of hedge funds and retail investors. Just a few years ago the market was 80%+ hedge funds and less than 20% retail investors. Now that equation has flipped and we have anyone with a phone app investing in the stock market. Not saying everyone will beat the market but with a little DD and some smarts you can out-perform pretty handily. Heck if you just bought Tesla, Apple, MSFT, Amazon, or one of many others you've out-performed the S&P500 by a pretty wide margin.

There is of course a diminishing return to this and risk tolerance goes down as your account balance goes up but there are still smart plays out there to be made. Maybe the majority of retail traders aren't smart enough to beat the market but there will always be those that are smart enough to beat it on a regular basis. Not to mention derivatives and other incomes streams to be made off of stock holdings. Heck, just in income made off of selling covered calls and cash secured puts on my *largely S&P tracking* stock portfolio I've beaten the S&P this year.

**Myrkul** · 07-15-2021, 11:32 PM

Originally posted by gabe View Post

Yes, I meant institutions in that 80% statistic. My larger point though is that the market isn't the same one that you're referencing. The tables have turned and now we're seeing outsized returns by sheer volume of retail traders moving company valuations around.

I'm not saying you're wrong for the average person. If you're not chasing alpha and doing a lot of research then sure you will not out-perform the market. I can point to funds like Berkshire or ARK or Pershing Square as having out-performed easily. They are the big ones but even if you look at retail traders there's a good 10% that have made such outsized gains making pure plays that even if they returned zero over the next 9 years they still will beat the market. Lots of people making pure plays and using leverage to do so and making pretty massive returns. Sure they lose some but it's a different approach.

Leverage also ALWAYS carries more risk. It's going to be a while before I can dig into those alts, but most of the Alpha on funds like that are really just liquidity premiums. Its a huge pain in the ass waiting for liquidity events and just not worth it. So I guess you are banking on being top 10% of retail investors this year? I don't like those odds. If I'm playing a game, and there is a 90% chance I loose, I'm not going to play. That's gambling, not investing.

Originally posted by gabe View Post

You can harp on "short term" gains all you want or a 10 year time horizon but when it comes to beating the market it's what you're doing on a month-to-month basis that matters. You build gains a percentage at a time until you get 10 years down the road and look back at a successfully built account that has had market beating gains.

Oh man, I bet your CPA loves you. What does your tax situation look like shifting everything around once a month? If you hold a position for over a year you pay long term capital gains rates. So 15%-20% on the gains. Under a year, you are paying short term capital gains, which are identical to your ordinary income tax rates (30%?). So you aren't just trying to beat an index now, now you are trying to beat the tax code too.* So now your gains are getting hit with a 30% tax bill, is your performance good enough to overcome the tax code as well?

*(If your effective tax rate is under the long term capital gains rate you really can't afford much, if any risk. If you are doing this in a qualified account (IRA/401K/Roth/Etc.) Those are retirement accounts....please don't gamble with your retirement.)

Originally posted by gabe View Post

You're pretty obtuse in how you actually measure "the market". If you're not using the S&P as a standard to beat, what are you using? How do you define "the market'?

Apples to apples man. Some funds benchmark against the S&P 500, some funds benchmark against the the S&P Mid-Cap 400. If you have an emerging markets hedge fund it doesn't make sense to benchmark that against the S&P. It's obviously going to be more risky, so you should expect higher higher returns and higher risk. Each investment needs to be benchmarked against an appropriate index. So it really is a case by case, fund by fund basis.

Originally posted by gabe View Post

You're awfully coy about your "allocation" as well. So you just save money and stick it in some index? Which index? What are you doing to at least track the market and beat inflation? How do you hedge against inflation?

Pretty much. I can't disclose the exact funds, but I assure you they are all publicly traded indexes. Nothing crazy or wild, but its as aggressive as I can stomach. 8 funds total. I set it 3-4 years ago, have it set to automatically rebalance once a quarter, and check it maybe once or twice a year. Risk adjusted I doubt it beat the S&P, but I have been super happy with my returns though. My time horizon is long enough anyway that I really don't care. Returns will probably be less next year, markets like to return to the median, which over the last 100 or so years is around 7% a year. Why would I hedge inflation? The market already reflects inflation. Equity returns are far in excess of it. If you are super concerned about it just drop 5% of your bonds and dump it into your equities.

Originally posted by gabe View Post

If you're a "financial expert" then surely you have some better advice for us than just stash money away and stick to the indices.

Absolutely. And you are really not going to like it, because it's boring and pretty hard for most people. 401(k)s allow you to to sock away $19,500 a year tax free. If you are over 50, that number goes up to $26,000 per year. Max it. It really doesn't even matter if its a target date fund. Just max it. If you already are maxing it every single year, there are other places to go. It REALLY is just about working the tax code to your advantage. If you have access to a Roth 401(k) through your employer, that's even better.

Originally posted by gabe View Post

Plus I'm not sure what you're doing in this thread. Not to make you feel unwelcome but it's just a little strange to barge into a stock trading thread and say "you're all dumb for even trying, you can't beat the market". Chad move but still a little bit odd.

Ya. I'm a bit of a bleeding heart for the average investor. I'm not here to try and convince you. That's never going to happen. This is the internet, and I already know you are arrogant enough to think you can both beat the industry as a whole and beat the tax code on top of that. Why the FUCK would you listen to me if the tax code and the industry as a whole aren't enough? If you are actually that good go start a hedge fund and make a couple million a year making both yourself and your clients a metric fuck ton of money. I sincerely mean it when I say: Good luck! because you are going to need that in spades. I apologize if I'm coming off as a Chad, I am aware I have a tendency to do that. I'm only saying anything because I'm completely disgusted by how "casino like" apps like robin hood have made that market recently. It's all bullshit, I'm posting/replying at all in the hopes that someone on the fence sees this and "gets it".

**gabe** · 07-16-2021, 11:36 AM

Originally posted by Myrkul View Post

Oh man, I bet your CPA loves you. What does your tax situation look like shifting everything around once a month? If you hold a position for over a year you pay long term capital gains rates. So 15%-20% on the gains. Under a year, you are paying short term capital gains, which are identical to your ordinary income tax rates (30%?). So you aren't just trying to beat an index now, now you are trying to beat the tax code too.* So now your gains are getting hit with a 30% tax bill, is your performance good enough to overcome the tax code as well?

A lot to unpack but I just don't think I will...you seem pretty much on the index bandwagon and that's fine. Just seems like you've reduced investing to either super-short term swing trading or even day trading vs. long term indexing. Believe it or not you can just hold securities of a high quality for a long time. I'm pretty Apple and Tesla heavy since I think they will perform over the long term better than the indices. Other positions I swing trade like PLTR and others. Some I know are cyclical so I trade them on a cylical basis (oil, XOM to be specific). It's not about choosing one thing over another but rather enjoying myself in investing. Heck, I have a small account that I treat like a savings account that's through M1 and is only index funds and a couple REITS and it's great but not nearly as fun as being active in trading.

In terms of tax liability you are right but you're also overstating the situation. In the end we all pay taxes if we make money. Obviously using tax shelters like a 401K or HSA (both of which I do) is a great avenue but you can also use real estate (which I do a LOT of) to write off quite a bit of W2 income as losses and greatly reduce tax liability. Sure long-term capital gains are taxed at a lower rate but if I'm making money the gov is making money so whether it's 15% for long term or 22-28% for short term the % in the middle isn't sinking the ship. It might be a major concern if you're swinging around a super large day trading account but for the average Joe throwing a few grand back and forth it's not going to amount to even a grand in taxable gain which even that you're throwing just $150 on your tax bill. I swing trade and make perhaps $5k a year on swing trades and another $2k on options premiums which does bump my taxes up but again, between RE write offs and tax-advantaged account contributions I'm still in a low tax bracket and taxed at the same 22%. Not saying taxes are my favorite thing, just that you have to pay to play.

If you want a justification for generating tax liability, it allows me to raise funds to invest in long term investments much faster. I can sell monthly options contracts against many of my holdings and make 10x back passively on those holdings than I would have on dividends. Something like PLTR or SPCE are gambling stocks sure, but you can run an options wheel on them selling cash secured puts, getting assigned then selling covered calls until you get assigned to drum up a couple hundred dollars per month per position in cashflow and capital gains. It's a very efficient way to build an account's cash position to then roll into long term dividend yielding stocks.

At the end of the day...that's my way of doing things. For a lot of investors it IS a casino and it's a fun thing to throw a little cash at. You can't demean them for simply using the market in that way because it's a free market and free individuals are free to gamble on risky positions. If only straight laced serious investors got into stock investing (trading) then things would be boring and the market would be run by crooked ass hedge funds who manipulate the market on CNBC. Instead we have a now very democratic market run largely by retail investors who do things like run up meme stocks to squeeze out greedy hedge funds. Aside from being fun to watch it gets the average person involved in the stock market and maybe some of those will turn into "serious" investors and leverage the market to improve their financial situation. It's different things to everyone and that's the beauty.

**ReconSWS** · 07-19-2021, 11:00 AM

Holy FUCK dude I am so fucking pissed of. I missed by a WEEK. ONE FUCKING WEEK.

All my SPXS shit missed last week, coulda been yuuuuuge.

Thankfully, I had my VIX calls set out anouther 7-days, so those got a nice 3x pop and saved me 50% of my funds.

So now I've got 450CAD to blow on something.

I'm thinking, THIS AIN'T NO CRASH, I'm buying this dip.

**gabe** · 07-19-2021, 02:01 PM

A stock market bear is always right twice a year

**ReconSWS** · 07-22-2021, 04:15 PM

---

I actually managed to do it... I managed to psyche myself out and actually TRUELY execute an 'inverse yourself' strategy. I actually felt the play this morning, I felt it through my bones, and woulda made it if I could have but was distracted. Did the complete inverse at the perfect bottom.

Unfortunately, we still playing with trash out-of-the money 3 day expiry trash, but literally just need 2% up to make like 1000%.

SPY 445c x100 7/26

**Axel** · 08-04-2021, 09:14 AM

I had my doubts, but this week it looks like buying into Robinhood's IPO was a good move. Suck it, Reddit 😆

**gabe** · 08-04-2021, 11:43 AM

Good play. Seems the WSB crowd is really down on it but tbh it is one of the best trading platforms.

I switched my smaller trading portfolio back into cash secured puts and covered calls. Trying to stay cash rich and keep the income coming in. I don't forsee this market holding out much longer. Not normally bearish but I'm hoping for a flatter year or two in the market to even out this explosive growth caused by Jpow and his money printers.

**gabe** · 09-01-2021, 04:05 PM

Hows the gang? Recon you still with us?

Been running covered calls and cash secured puts on MMAT, EMAN, and SNDL. Basically all trash companies with negative earnings but massive implied volatility so the option premiums are huge. Reasoning is that even if they drop below my strike I'm still at a very low cost basis and can turn around and sell options to get rid of the shares at the cost basis and collect premium again. God I love options.

*edit* oh and I love crypto. Etherium has really brought my account back to life.

**Axel** · 09-01-2021, 05:05 PM

Yeah, it's been a good couple weeks. I sold some shares to cover a few expenses, but the account balance is roughly back to what it was before the withdrawals.

And second on Ethereum. I have currently doubled my investment, which was free gubmint stimulus money in the first place 🤘

**Axel** · 09-07-2021, 10:12 PM

I just checked the rest of my posted dividends for the month and they come to... $10.99... lol

**bellicose** · 09-11-2021, 01:43 PM

Dutch bros IPO drops this week. Oregon largest IPO in a long, long time. I'm jumping in on that. Way back when they had private ownership of individual retail locations, I wanted to invest in one if someone I knew was going to start a new location. Next best thing, I guess.

**Euphie** · 09-12-2021, 10:14 AM

Originally posted by Axel View Post

I just checked the rest of my posted dividends for the month and they come to... $10.99... lol

I have both a covered call strategy and a dividend one and, I swear I am always tempted to cut the dividends each time I look at that statement and just go 100% covered calls, but I am too chicken to do it.

**gabe** · 09-12-2021, 02:01 PM

I like to have both but I only run covered calls on non-dividend paying companies. Your dividends should add up as you grow your account. I've pushed for yield with some energy and telecom holdings and get about 4% yearly which amounts to about $100 a month in dividends. In addition to dividends, I add at least $100 per week to my account on a scheduled deposit it adds up to a nice account growth. I'm going to start looking at adding to the JP Morgan covered call fund JEPI to boost dividend yield to get to $200 per month by the end of the year.

In my little $2500 "day trading" or play money account though...I'm ruthless about yield. I'm writing covered calls and cash secured puts like crazy on some pretty awful little dollar stocks with super high IV. So far it's worked out just writing puts, getting assigned, writing a call all at the same strike and collecting premium only at a 10-15% yield per month on each contract. I'll probably get bit if one of these companies tanks but I guess that's how you learn. My favorite right now is MMAT with a nice big $60 premium on a monthly put contract that costs $400 to secure.

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