Day trading and penny stocks

[ken-do-nim]

My sister-in-law ... well, ex-sister-in-law if you want to quibble but we still consider each other siblings (divorce totally messes with your sense of family), started with $500 about a month ago.  She has been watching YouTube videos and listening to podcasts all about the hottest penny stocks and how to trade them.  She found a Bitcoin-based penny stock that reliably trades between .72 and .82.  She sells when it hits .82 and rebuys when it goes back down to .72, and does this several times a day.  She has grown her $500 to $4000 in just a few short weeks.  I have to say, I'm impressed.

It was she that gave me the tip on MARA, and I thought I'd indulge her by buying some, but of course whenever I go near stuff like that it just tanks.  Clearly this area isn't for me, but I just wanted to mention it to you all in the way of making conversation.

[fenders53]

(05-06-2021, 08:20 AM)ken-do-nim Wrote: My sister-in-law ... well, ex-sister-in-law if you want to quibble but we still consider each other siblings (divorce totally messes with your sense of family), started with $500 about a month ago.  She has been watching YouTube videos and listening to podcasts all about the hottest penny stocks and how to trade them.  She found a Bitcoin-based penny stock that reliably trades between .72 and .82.  She sells when it hits .82 and rebuys when it goes back down to .72, and does this several times a day.  She has grown her $500 to $4000 in just a few short weeks.  I have to say, I'm impressed.

It was she that gave me the tip on MARA, and I thought I'd indulge her by buying some, but of course whenever I go near stuff like that it just tanks.  Clearly this area isn't for me, but I just wanted to mention it to you all in the way of making conversation.

True penny stocks, the ones that actually sell for about a penny are a trip to the slot machines. I helped a friend get started but talked him into stocks priced like your sis-inlaw.  He is also up like 300% in months.  He is now sticking with stocks that trade a little higher. 

The real problem is greed gets you eventually, and I include myself in that list when I did pennies.  I was there for one reason and that was to 3X my bet in a short amount of time.  You place a few $100 bets and double your money.  Suddenly you think you have something figured out and you triple down on something and lose 75% of your money in a week.  There is nothing more manipulated than penny stocks.  Market makers have a license to steal, selling shares of shell companies.

[kblake]

Just buy the fake company DOGE and become a millionaire over night lol

It's these kind of stocks that are ruining the market and the fact that will be paying more capital gains. Your losing before you even started.

I am actually near the point of selling everything and done playing these games. The capital gains are going to kill us all. Investing almost isn't fun anymore lol

I may just consider taking me money an opening up that pizza shop I always wanted

[NilesMike]

(05-06-2021, 01:32 PM)kblake Wrote: I may just consider taking me money an opening up that pizza shop I always wanted

Cash only 

[fenders53]

Cashy's Pizza lol.

[ChadR]

There is a BBQ joint in downtown Fort Worth that is cash only. And it is right across the street from the Federal Building in which the IRS Fort Worth branch is located. I would think that this screams audit me. Though their BBQ was pretty good so maybe the IRS is giving them a pass on it.

[fenders53]

(05-07-2021, 10:45 AM)ChadR Wrote: There is a BBQ joint in downtown Fort Worth that is cash only.  And it is right across the street from the Federal Building in which the IRS Fort Worth branch is located.  I would think that this screams audit me.  Though their BBQ was pretty good so maybe the IRS is giving them a pass on it.

Chad , I don't know if you will laugh or just think I am an idiot after you read this....

I decided to sell my rental house about a year ago.  Paid off and a cash cow for over 5+ yrs but it was needing some expensive repairs.  My old back just won't do it and I wanted out of the rental game.  Place only worth about $100K but pure profit, no mortgage etc. 

A childhood friend of my wife's wants to buy it and he is persistent.  He is having trouble finding a place with a big enough for a pole building/Morton BLDG, you know what I mean.  His apartment lease is up and I decide to rent the house to him for a few months while we figure things out.  At the very least he will let me prep it for sale.  I knew him well enough to know he is a good guy, so I rent to him, stop by once a week for a few beers and we chat about stuff.  He's moved in now and he wants to buy it bad.  The negotiation process was interesting.

Him "How about I just give you a huge down payment and make cash payments to you?"

Me "Sounds great but no, how about we get attorneys, a bank loan and do this completely legal, I'll make the price fair.  The place needs work a bank will definitely force me to complete before they would do a mortgage".  

Him- "I can't get a bank loan, it's not that I have bad credit, it's that I have no credit, I have never borrowed a dime in my life"

Me- "I know you have a very solid HVAC business for decades, everybody I know raves about their experience with you.  You even have employees"

Him, "yeah I pay taxes and stuff, some of it might be under the table, I just don't need to borrow money".

Me- "Ok but we are doing a legal contract, I will need a huge down payment and I am charging you loan shark interest until you have the place over half paid off so I can be comfortable.  Five year balloon because I don't want to be a bank when I am old"  

He isn't liking the loan shark interest rates a year later, but I got my big down payment and the contract payments are on time.  The place is now definitely worth 25% more as the real estate market has changed and he has installed new heating and air, connected to municipal water and dumped the junk well, rebuilt the porch that was a big mess.  Invited me to help him pour a big driveway next week and I will show up to help some.  Big pole barn never happened yet as he decided he prefers to get the loan shark off his back first.    I'm good with that but I kinda want to avoid the capital gains I have to pay eventually.  He could sell the place for a real decent profit in a couple weeks and pay me off but he won't because he still has no real credit.   

Cash is king lol.

[ken-do-nim]

I guess the moral of the story is that cash is king ... until it isn't?

Nice of you to help with the driveway.

[fenders53]

(05-07-2021, 12:23 PM)ken-do-nim Wrote: I guess the moral of the story is that cash is king ... until it isn't?

Nice of you to help with the driveway.

I'm not sure what the moral of the story is but I am pretty sure a 54yr man with only an HD credit card and cash is very strange in 2021.  He's happy but he will be working until he is 75.  His SS is going to be very weak.

[NilesMike]

(05-07-2021, 02:15 PM)fenders53 Wrote:

(05-07-2021, 12:23 PM)ken-do-nim Wrote: I guess the moral of the story is that cash is king ... until it isn't?

Nice of you to help with the driveway.

I'm not sure what the moral of the story is but I am pretty sure a 54yr man with only an HD credit card and cash is very strange in 2021.  He's happy but he will be working until he is 75.  His SS is going to be very weak.

Why would he care about SS if he's investing his money (both employer and employee portions) he would smoke SS returns.

[fenders53]

(05-07-2021, 03:44 PM)NilesMike Wrote:

(05-07-2021, 02:15 PM)fenders53 Wrote:

(05-07-2021, 12:23 PM)ken-do-nim Wrote: I guess the moral of the story is that cash is king ... until it isn't?

Nice of you to help with the driveway.

I'm not sure what the moral of the story is but I am pretty sure a 54yr man with only an HD credit card and cash is very strange in 2021.  He's happy but he will be working until he is 75.  His SS is going to be very weak.

Why would he care about SS if he's investing his money (both employer and employee portions) he would smoke SS returns.

You missed part of the story Mike.  He doesn't have any actual investments to my knowledge.  He hasn't worked for anyone else for about 20 years.  He worked in the trades then.  He has a fat bank account, his working capital, (a pick up, a couple vans and all his tools) so they can do multiple jobs.  He's licensed, insured and all that.  He's just been a cash on the barrel head kind of guy.  I find him interesting though it's not the path I choose.  I know he does all the heating, AC and handyman work for a few 20+ family rental units.  You are a landlord.  Not hard to connect the dots.  Half this work is going to be off the books for Benjamins and everything I do will be way under competitors prices..... but that's none of my business.   

It's an interesting way to live your life.

[ken-do-nim]

I'm always exasperated by people who have very large bank accounts. They don't understand that they are actually losing money over time due to inflation. My own girlfriend had $90K in the bank last year and I told her how much of a gold mine 2020 was, and all I could get her to invest was around $6k.