Stonk Madness

[crimsonghost747]

Latest update: stonk goes all over the place.
First down around 30% yesterday.
then up 50% today.

I don't think anyone has any idea what this one is doing

[fenders53]

After the big dip I thought it might churn around 100 awhile. Nope lol. They need to sell shares slowly and they will be funded for years. It would be foolish not to.

[jalanlong]

I have been thinking about this for a while...you know how there are certain "sea changes" that come along and we never go back to doing things the same way again. For example, once streaming music came along there was little chance we would all decide to go back to putting music on cassettes and dealing with the limitations of that format. Streaming is better. But then there are things that we start to do differently and then it blows up and we decide to go back and do it the old, "better" way. For example I think we have mostly decided that virtual learning is not nearly as productive as in-person learning for most kids, even though virtual seemed like the way of the future.

In terms of investing, when I listen to podcasts or radio/tv programs on investing now, 80% of the time I am hearing about Bitcoin, NFTs, SPACs, Wall Street Bets etc. If I hear anything about stocks it is mostly about ARK ETFs. The closest thing I ever hear about "old fashioned" investing is Index ETFs but even that is talking about stocks as if they were something like Bitcoin; a commodity to be traded in and out of with the push of a button. The notion that you are buying ownership in an actual business seems irrelevant to most these days.

Is this a sea change that is here to stay? Do I have oldmanitus or some day will these new forms of "investing" crash down and the public will once again turn to the old fashioned notion that you buy a piece of companies that you like and you feel will grow over time and then you hold them forever to bequeath to your children?

[fenders53]

(04-20-2021, 11:29 AM)jalanlong Wrote: I have been thinking about this for a while...you know how there are certain "sea changes" that come along and we never go back to doing things the same way again. For example, once streaming music came along there was little chance we would all decide to go back to putting music on cassettes and dealing with the limitations of that format. Streaming is better. But then there are things that we start to do differently and then it blows up and we decide to go back and do it the old, "better" way. For example I think we have mostly decided that virtual learning is not nearly as productive as in-person learning for most kids, even though virtual seemed like the way of the future.

In terms of investing, when I listen to podcasts or radio/tv programs on investing now, 80% of the time I am hearing about Bitcoin, NFTs, SPACs, Wall Street Bets etc. If I hear anything about stocks it is mostly about ARK ETFs. The closest thing I ever hear about "old fashioned" investing is Index ETFs but even that is talking about stocks as if they were something like Bitcoin; a commodity to be traded in and out of with the push of a button. The notion that you are buying ownership in an actual business seems irrelevant to most these days.

Is this a sea change that is here to stay? Do I have oldmanitus or some day will these new forms of "investing" crash down and the public will once again turn to the old fashioned notion that you buy a piece of companies that you like and you feel will grow over time and then you hold them forever to bequeath to your children?

Ask me again after a devasting correction.  Tech was poison after the tech bubble crash, but it obviously wasn't going away forever.  Valuation will matter eventually.  It could remain a casino for a long time though.

[crimsonghost747]

Is this even a change? Hasn't it always been this way?
Young people in general are a bit reckless. They like to gamble. They can throw away $1000 if it means there is a real chance to get $10000 out of it sooner rather than later. I don't think this is anything new. All sorts of gambling, casinos etc have been around forever. It's not much more than 10 years ago when everyone thought house flipping was an amazingly simple way to make a fortune. Now the regular dude just has access to the stock market. It's just another "location" where to gamble.

Then, after some years, these people realize that while casino stuff is fun, and may or may not have been profitable, it's maybe time to start thinking of more stable investments. The majority of my friends (in the 30-40 age bracket) are much more interested in Tesla or bitcoin than JNJ or PEP. But if we fast forward 20 years, I think those ideas have changed and it's their kids playing with whatever is the new hot thing and these guys are buying JNJ and PEP.

The media also skews this significantly. Always remember that the majority of the media is about one thing only: profit. They are businesses that generate revenue based on the amount of readers. "This is the next Tesla" will get 100x more readers than "hey, JNJ is still awesome". There is also a lot more happening with volatile things, therefore more things to report. Just look at this forum. There is a lot of posts and talk about different kind of more speculative stocks, options etc. But those are probably around 5% of our portfolio. There is just more happening there, thus more to talk about.

[fenders53]

Good post. This place is indeed a decent example. We debate all day about that hyped stock that might 3X fast, or cost us 1/2% of our port. Our average age is maybe 40 to 45? I base that on comments about our kids who may be young adults.

The gambling will continue until most everyone bleeds. Many specs are now down 50%, but if you had 25% in crypto you are still good. One major downside to a proper correction that lasts is a generation can be soured for a decade. It's harder for the bull to get traction then.

[jalanlong]

I currently invest in a variation of the Permanent Portfolio which allocates 25% to cash, 25% to long treasuries, 25% to stocks and 25% to gold. I have tweaked it a bit to give myself more stocks and less gold/LTTs.

However, as well as that portfolio has backtested over the last 40 years, it did so using the tailwinds of lowering interest rates. Now its sitting on cash paying 0% and Long Term Treasuries at historical lows relying on stocks and gold to do the heavy lifting.

I am closer than ever to going back to my grandparent's old time investing ways. No Bitcoin. No NFTs. No Modern Portfolio Theory. Back to basics. 10% of my funds in cash and the rest in "safe" dividend paying stocks like JNJ or UNP etc. I will ignore the daily fluctuations, live off of the (hopefully) increasing dividends and leave the principal for my heirs. That is my plan. But I haven't pulled the trigger on it yet. I am sure the moment that I do long bonds will take off, although I don't know what the catalyst for that would be right now.


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[ken-do-nim]

(04-22-2021, 07:07 PM)jalanlong Wrote: I current invest in a variation of the Permanent Portfolio which allocates 25% to cash, 25% to long treasuries, 25% to stocks and 25% to gold. I have tweaked it a bit to give myself more stocks and less gold/LTTs.

However, as well as that portfolio has backtested over the last 40 years, it did so using the tailwinds of lowering interest rates. Now its sitting on cash paying 0% and Long Term Treasuries at historical lows relying on stocks and gold to do the heavy lifting.

I am closer than ever to going back to my grandparent's old time investing ways. No Bitcoin. No NFTs. No Modern Portfolio Theory. Back to basics. 10% of my funds in cash and the rest in "safe" dividend paying stocks like JNJ or UNP etc. I will ignore the daily fluctuations, live off of the (hopefully) increasing dividends and leave the principal for my heirs. That is my plan. But I haven't pulled the trigger on it yet. I am sure the moment that I do long bonds will take off, although I don't know what the catalyst for that would be right now.


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I love the idea of living off the dividends and leaving the principal to your heirs.  Personally, if I were in drawdown mode from my portfolio, I would switch over more to AT&T and MO where the yield is substantially higher than JNJ and UNP.  Even Verizon and and Consolidated Edison have a much higher yield than JNJ and UNP.  I guess it all depends upon what you consider safe.

[jalanlong]

(04-22-2021, 07:23 PM)ken-do-nim Wrote:

(04-22-2021, 07:07 PM)jalanlong Wrote: I current invest in a variation of the Permanent Portfolio which allocates 25% to cash, 25% to long treasuries, 25% to stocks and 25% to gold. I have tweaked it a bit to give myself more stocks and less gold/LTTs.

However, as well as that portfolio has backtested over the last 40 years, it did so using the tailwinds of lowering interest rates. Now its sitting on cash paying 0% and Long Term Treasuries at historical lows relying on stocks and gold to do the heavy lifting.

I am closer than ever to going back to my grandparent's old time investing ways. No Bitcoin. No NFTs. No Modern Portfolio Theory. Back to basics. 10% of my funds in cash and the rest in "safe" dividend paying stocks like JNJ or UNP etc. I will ignore the daily fluctuations, live off of the (hopefully) increasing dividends and leave the principal for my heirs. That is my plan. But I haven't pulled the trigger on it yet. I am sure the moment that I do long bonds will take off, although I don't know what the catalyst for that would be right now.


Sent from my iPhone using Tapatalk

I love the idea of living off the dividends and leaving the principal to your heirs.  Personally, if I were in drawdown mode from my portfolio, I would switch over more to AT&T and MO where the yield is substantially higher than JNJ and UNP.  Even Verizon and and Consolidated Edison have a much higher yield than JNJ and UNP.  I guess it all depends upon what you consider safe.

I am still in the accumulation phase. Im 51 and made bad financial decisions most of my life. However, now I am debt free and able to sock away a large % of my income. So I am trying to find stocks which balance growth and income.

[ken-do-nim]

I think we've all made some bad financial decisions. I know I have!

Why don't you head on over to the "My Portfolio" forum and share what you are invested in so far.

[fenders53]

That's good idea. And if you are moving significant amounts of money. I'd be inclined to have average on stocks sitting on all time highs if they are clearly over valued.

[crimsonghost747]

+10% on a day when all the major indexes are in the red.
And the party is just getting started! Go STONK Go!