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LordofHats wrote: I don't think legality is the only measure of whether or not something is a scam. It's only a measure of legality. There are plenty of legal ways to rip people off, doesn't really change that it's sleazy.
I suspect this will depend on where you live.
The U.K. has some decent rules and regulations. So if you’re mis-sold, there are ways and means to obtain redress. Whilst far from fool proof (and I mean that literally), the overall legal framework heavily discourages dodgy businesses. Even if they go bust, there are still things in place to help at least mitigate. And it doesn’t necessarily cost anything to pursue those avenues.
Fed up of Scalpers? But still want your Exclusives? Why not join us?
Polonius wrote: Well, DCA is a method for timing investments, not deciding how much to invest, right? DCA is deciding to invest your 5% in each paycheck, instead of upfront for the year. My understanding is that DCA is a deliberate effort to minimize volatility by purchasing across the ebbs and flows.
I do agree that investing prior to, say, paying off high interest loans or taking care of your personals needs is ill advised.
So yeah...I'm not anti-DCA at all. I do it with my 401K like most people, although there obviously the timeframe is longer-term, and really we're all just doing it by default since we're investing money as it comes in. Nothing wrong with that at all. My 401K is seriously super-boring. Mostly index funds with lower fees, although with certain types of funds I see some benefit in active fund management. I dunno...do you *really* want to index the Russell 2000, or does it make sense to have a manager selecting a smaller selection of potentially more fruitful stocks from that universe? The math probably still favors index funds overall just because the fees can be high, but I think there's a sensible argument for active management at times. It's not as simple as passive good, active bad IMO.
Anyway, with DCA etc., in a situation where you come into a chunk of money -- maybe you sold something, got an inheritance, etc. -- you may see more return investing it all at once rather than in dribs and drabs since the market tends to go up. DCA isn't a magic bullet for every situation, and that's all I was really responding to before. While I think "don't try to market time" is overall a good message to small investors with a longer time frame, there are different situations where your time frame can be shorter or something. And hell, there can be room for seeing an opportunity you believe in and jumping on it. People do make money that way. It's just about *truly* understanding the risk involved and knowing whether you can afford to make those bets, IMO. To me, it's those things that cause people to have really bad experiences.
That’s rather interesting to me. As if assets such as Crypto and NFT’s can be seized, they’re going to be a lot less appealing to fraudsters, especially given Blockchain makes them bloody hard to hide, or falsify ownership of.
Given we know (not speculate, know) Crypto and NFT’s are popular with fraudsters and other criminally minded folks? We might just see this ridiculous bubble burst.
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JWBS wrote: Apparently Trump's SPAC for his social media thing gained 600% since it was announced. Might not be too late to jump on that idk (just what I heard in passing, might be I got totally the wrong end of the stick. Also, not politics, purely an investment idea).
Investing in anything related to Trump is almost as guaranteed to result in you losing the entirety of your investment as investing in the bloke down the pubs chocolate teapot idea.
When there's only one bank on the planet willing to lend someone money, you should consider why that is.
If anyone is interested in cryptocurrency and nfts, I recommend Folding Ideas video on the subject. It dispels a lot of the myths about crypto that are spread by the cryptobros.
I'd also recommend John Oliver's video on pensions and retirement plans, specifically for the part where he is discussing fees.
Basically, even if an actively managed fund does manage to beat the market average (and that is a big if), chances are most of those "returns" are just going to be swallowed up by the higher fees.
This message was edited 5 times. Last update was at 2022/02/14 12:23:16
The Laws of Thermodynamics:
1) You cannot win. 2) You cannot break even. 3) You cannot stop playing the game.
Colonel Flagg wrote:You think you're real smart. But you're not smart; you're dumb. Very dumb. But you've met your match in me.
JWBS wrote: Apparently Trump's SPAC for his social media thing gained 600% since it was announced. Might not be too late to jump on that idk (just what I heard in passing, might be I got totally the wrong end of the stick. Also, not politics, purely an investment idea).
Let me start with the clearly obligatory this is not financial advice bit.
I am holding only 4 DWAC and having looked at where it was last year before the jump to now I don't know if I would buy any more at the current price. If I had found it before when it was floating around 10 dollars it would have been worth throwing money at but it did jump for a day or so, a real boost up to 170ish if I recall and hast been anywhere from 50+ to 96/97 just last week. So in the 80 dollar range I can't see buying more. I do believe it will "raise again" but only because the Truth Social thing will go live and draw in users but I don't expect it to last. I'll be getting out with as much money as I can manage when that happens. So I guess the percentages sound good but I feel the reality isn't really expressed well in percentages.
That said I am more interested in Rumble which will be part of the truth social infrastructure as I feel that will have more longevity or maybe more practical but who can say. I just feel youtube competitors are something worth my time. I grew up with stories from teachers who missed out on buying into Apple and this seems to me to have a slight comparison, and the price seemed reasonable.
I have a feeling that even if Trump's truth social doesn't last rumble will be around after that.
I am also looking a Phunware, again being used for some infrastructure features and some other "trump related" stuff. For me the price has been very acceptable and looking at their price history and particular events, it feels like a reasonable bet. I bought in at under 3 dollars so all it has to do is hit 6 dollars, although I would love for it to go higher but I have to set realistic expectations. If I recall it hit 300 in 2019 but I don't expect that again.
I view two of these three stocks as not much more than scratch off tickets. Not investments. I only bought in to make some money to hopefully spend on other long term investments. It's possible that Phunware and Rumble both become long term for me but I am not expecting that from the DWAC.
Clearly too soon to say. If anything I'd avoid DWAC unless you are happy to buy it at the current price. But I wouldn't, not when there are related alternatives.
Just something to think about.
I'm still a noob with under a year of throwing money at the market. I'm more interested in dividend stocks and am still looking for growth stocks I can actually afford and or very low cost stocks I can buy into, watch grow and sell for hopefully a "quick buck".
TLR 600% feels way more like hype when compared to the reality of the price and how much you can afford or would be comfortable affording to spend.
Hope this was helpful.
@ A Town Called Malus - thank you for posting the line goes up video. A friend of mine mentioned I should see it. Had completely forgotten about it. Thank you.
This message was edited 2 times. Last update was at 2022/02/14 16:05:34
The rewards of tolerance are treachery and betrayal.
Remember kids, Games Workshop needs you more than you need them.
JWBS wrote: Apparently Trump's SPAC for his social media thing gained 600% since it was announced. Might not be too late to jump on that idk (just what I heard in passing, might be I got totally the wrong end of the stick. Also, not politics, purely an investment idea).
Investing in anything related to Trump is almost as guaranteed to result in you losing the entirety of your investment as investing in the bloke down the pubs chocolate teapot idea.
When there's only one bank on the planet willing to lend someone money, you should consider why that is.
Ahem.
In general, SPACs are longshots. Seems to be a trend of investors getting in early and leaving after achieving some price target. I personally think of them mostly as a pump-and-dump scheme, but believe (over time) we'll learn how to separate the cash grabs from the true value propositions.
This seems to be especially true for new media companies, Buzzfeed being the prime example. Investors were pulling out before it went public, it closed 11% down the day it opened, and it continues to hemorrhage money. A lot of SPACs seem to work out this way, the absence of a due diligence period does not create the same enthusiasm from investors that would be seen with a traditional IPO. While I wouldn't call SPAC investment pure speculation, you do have to take certain things for granted and the SEC does need to offer some better guidance on how to look at them.
DWAC has been outperforming all others in it's class, despite being a social media company where no one can actually socialize. Bad news, such as SEC scrutiny and delay of it's app, don't seem to affect the price significantly. Bloomberg speculated the other day that admiration for the former President keeps the price high.
While I certainly acknowledge someone's personal brand could be driving investment, my interest lies the technical underpinnings of the platform. Truth Social operates is a decentralized application operating on Mastodon. It superficially resembles Twitter but, behind the scenes, is capable of operating in a novel and unique manner that may be more aligned with usage trends prevalent on the Internet. When it launches, it should be the largest Mastodon instance on the Internet and may exceed the size of all others in terms of total usage. There are a variety of tools for mobile devices that already exist for interacting with Mastodon instances independent of a dedicated app, meaning it has an advantage over other alternative social media platforms.
And I think that's the important factor to consider when it comes to SPACs. Does the company offer a unique value proposition, or are officers simply looking to sidestep regulatory hurdles to move rapidly into capital acquisition? In my mind, the only justification for a SPAC is when a company offers a means of disrupting existing business practices in a manner that would be difficult to price through traditional valuation methods.
In the case of Buzzfeed, it's a large platform that does EXACTLY THE SAME THING as a lot of other companies. BZFD owns a lot of Internet real estate and generates useful data about behavior and attitudes. To some extent, it has the ability to shape culture in Western countries (according to their officers.) But that business model is not unique and invites comparisons with a lot of other existing companies. I can't think of a reason they did not deserve traditional regulatory scrutiny prior to doing the SPAC and believe returns reflect this. Someone could say, based on a top-to-bottom review of the business, here's what we think it's worth compared to XYZ, and that should be the source of the pricing. Instead, in my personal opinion, buzz weighed heavily on the initial price and investors are paying a price. It makes me wonder why we have SPACs in the first place, and if this is just a vehicle for trojan horses launched by hedge funds.
DWAC is another thing entirely. When you look under the hood of Truth Social, you start to understand there are some implications for existing ecosystems that markets may lack a mechanism for accurately pricing. Starting with the fact decentralized technology is not subject to the same kind of command-and-control administration evident within existing social media platforms. In a system that allows peering, what does the role of a mod even mean? What does an algorithm matter when someone can start their own instance and just synchronize the publishers that matter to them? It's open source, what's to stop someone from writing custom apps for interacting that are better than the source? What kind of first mover advantage will early adopters enjoy when a personality like the former President is the one driving adoption? And the question of timing - when Meta is trying to launch their version of Second Life in parallel, what kinds of choices will consumers face when considering each platform? And the question of long term, if they are going decentralized with the social platform, what does this mean for hosting / file storage / crypto / streaming?
DWAC creates all these questions and offers no convenient comparisons. Pricing DWAC feels like trying to figure out FB circa 1998, no promises but only this non-deterministic potential of disruption that could fundamentally affect the way we interact in a global marketplace of ideas. A SPAC is arguably the best vehicle for this kind of company to monetize, and the stock price seems to reflect that. We'll need to see what kinds (not volume) of engagement it creates over time to know for sure.
Full disclosure: not invested in any SPAC, just find the concept of investing in one baffling. Demonstrably riskier than crypto with far less upside potential.
A Town Called Malus wrote: I'd also recommend John Oliver's video on pensions and retirement plans, specifically for the part where he is discussing fees.
Basically, even if an actively managed fund does manage to beat the market average (and that is a big if), chances are most of those "returns" are just going to be swallowed up by the higher fees.
As I stated in my earlier post, yeah, index funds generally tend to outperform. But I think active management can make sense if you're looking at certain types of funds or even something like the small cap universe where you might prefer a more concentrated position of best bets rather than the *2000* different companies in the Russell 2000. Especially if you're keeping a smaller position in funds like those to try to add a little extra juice to a well-diversified portfolio. You'll never actually beat the market with an index fund. That probably isn't important to most small investors, but it's something to keep in mind. It's also important to note that active management fees can vary a lot. Some might make your eyes water, but others may be more reasonable. It might be more helpful/accurate to tell people to be mindful of fund fees rather than just paint all active management as robbery.
I appreciate what Oliver is trying to do there and it's not *bad* advice. But at the same time I wouldn't treat the words of a ranty TV comedy show host as some sort of investing gospel. I know he's British and wears glasses, but I feel like talking about fund picking, transitioning portfolios from stocks to bonds over time, etc. may kinda be leading the average small investor down the wrong path when it comes to retirement portfolios. If target retirement date funds are an available option...look hard at those instead of trying DIY, IMO. When pensions died off like the dinosaurs, the not-obvious casualty was that people lost access to professional money management. Instead they got handed a 401K with a 30 minute pep talk. Go get 'em kid! Of course the results were gakky for investors' retirements going from professional management to DIY.
TO ME, target retirement date funds are what the 401K program should have had from the beginning. They're already-diversified 'funds of funds' that you can park your money in and let the professional handle it, almost like pension managers used to. They'll take care of adjusting your asset allocation appropriately as you get older, any yearly rebalancing, etc. (Because you're all *totally* doing those things properly, right? Right? ) Fees can vary, so be careful. But many of them aren't too expensive (and some are very cheap) since they may contain a lot of index funds anyway. I would still advise folks to talk to someone, but I think the target date funds can be really good tools when planning for retirement.
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I think the thing to remember is that there's a sliding scale from a pure index fund to a broad based fund, to a narrow fund to an actively managed fund. I think that for most investors, especially people a decade or more from retirement, probably could be more aggressive than a pure index fund, while people that are using the IRA as a savings vehicle (such as for a mortgage down payment or college) would probably want to be less aggressive.
I think that any advice, other than "get professional, customized advice," is going to err on the side of caution. Index funds are cheaper, and generally safer, than other funds. The downside is that they are less likely to spike than more targeted funds.
Unsophisticated investors, will, almost by definition, make naïve investing choices. The goal is to steer people towards safer, more reliable choices, because while earning 8% on an index fund when a small cap fund earned 20% is bad, losing half your portfolio in CrunkCoin because a high school buddy hyped it up is far, far worse.
I don't know how much you've read about behavioral finance, but it's a pretty interesting field. Ultimately, I think the human brain just isn't wired well for investing.
Before I worked in financial services (disclosure -- I don't anymore), I figured how hard can investing be? I'm a smart guy with an advanced degree. And I can read books and stuff on the internet. LOL.
Then I had to get licensed, and in the process I started learning how many mistakes I'd been making...and why. Hoo boy.
gorgon wrote: I don't know how much you've read about behavioral finance, but it's a pretty interesting field. Ultimately, I think the human brain just isn't wired well for investing.
Before I worked in financial services (disclosure -- I don't anymore), I figured how hard can investing be? I'm a smart guy with an advanced degree. And I can read books and stuff on the internet. LOL.
Then I had to get licensed, and in the process I started learning how many mistakes I'd been making...and why. Hoo boy.
What were the mistakes that you had been making, and how did you stop making them?
gorgon wrote: I don't know how much you've read about behavioral finance, but it's a pretty interesting field. Ultimately, I think the human brain just isn't wired well for investing.
I'm going to go out on a limb and say that I need very little convincing to be convinced that the human brain, in general, is poorly wired for making intelligent decisions period.
I mean, we live in a world where a world-class heart surgeon went onto national TV in the year 2016 and claimed the Pyramids at Giza were grain silos with complete confidence.
I could write you a poetic saga about the American Civil War. Slap a chemistry book in front of me and best I can do is Google that gak and maybe have some vague idea how it works. People know what they know and outside that narrow field(s) of knowledge in which they've actually developed competency, we're all monkeys on typewriters
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LordofHats wrote: People know what they know and outside that narrow field(s) of knowledge in which they've actually developed competency, we're all monkeys on typewriters
Are you getting into Douglas Coupland territory ?
Sounds like something from Life after god.
Along with, three things that separate humans from animals. Smoking, writing and lifting weights. Not a direct quote, it's been more than 20 years.
This message was edited 1 time. Last update was at 2022/02/16 18:32:15
The rewards of tolerance are treachery and betrayal.
Remember kids, Games Workshop needs you more than you need them.
TBF, it's far from an original idea on my part so maybe wherever I picked it up from was inspired by him. I feel like the last couple years have been proof positive that human beings are incompetent first and only become competent in specific areas they've developed competency in. Modern culture at large generally encourages a 'Renaissance Man' attitude in societies where the vast majority of people vastly overestimate their own ability and immediate access to surface-level information via the internet reinforces that critical flaw of overconfidence.
This message was edited 1 time. Last update was at 2022/02/16 00:57:35
gorgon wrote: I don't know how much you've read about behavioral finance, but it's a pretty interesting field. Ultimately, I think the human brain just isn't wired well for investing.
Before I worked in financial services (disclosure -- I don't anymore), I figured how hard can investing be? I'm a smart guy with an advanced degree. And I can read books and stuff on the internet. LOL.
Then I had to get licensed, and in the process I started learning how many mistakes I'd been making...and why. Hoo boy.
What were the mistakes that you had been making, and how did you stop making them?
Shoot, lots of them. I didn't really understand how to diversify a portfolio. I didn't even truly understand basic concepts like growth and value investing. I didn't have appropriate asset allocations, and I certainly wasn't rebalancing periodically. Things like those target date funds just handle all of this for people, and it's why I think it's good for average investors to at least take a look at them (again, being wary of fees) for their 401Ks and such...although again talking to a pro is the best option.
I also made some hilarious mistakes with buying stocks. Bought a stock in a small pharma that looked like it was about get FDA approval for a product for a certain indication. Stock went up like 50% from the time I bought it...right up to when the FDA said "nah". Then the stock lost about half its value. Note that means it's below what I bought it for. So the company was scrambling and still talking a good game, and I said "well, I'll dump some of it now, but hang onto some just in case it gets back to my original purchase price. Y'know, make my money back." Moron. And of course it went lower. And lower. This is classic bad investing. People sometimes do this with a stock and ride it all the way down, thinking "when it gets back up to X, I'll sell it. Oh, well when it gets back up Y, then I'll sell. Oof...maybe back up to Z then?"
Someone in the industry put it to me this way, and it's just simple and smart -- "Knowing what you know today, would you buy that stock again? If the answer is no, then why do you still own it?"
TBF, it's far from an original idea on my part so maybe wherever I picked it up from was inspired by him. I feel like the last couple years have been proof positive that human beings are incompetent first and only become competent in specific areas they've developed competency in. Modern culture at large generally encourages a 'Renaissance Man' attitude in societies where the vast majority of people vastly overestimate their own ability and immediate access to surface-level information via the internet reinforces that critical flaw of overconfidence.
So behavioral finance isn't so much about knowledge/education. It's more about the wiring...the psychology. Part of is that human beings just don't do a good job of assessing risk, or gains vs. losses. The latter was me in that pharma stock example...classic loss aversion. Another part of it is that people aren't terribly rational with their money...they make decisions based on emotion. It also drives small investors to move in herds, buying at the top of bull markets (euphoria) and selling at the bottom of bear markets (panic). Warren Buffett has made a lot of cheddar over the years by being a contrarian and doing the opposite of what the herd is doing.
Some of this behavior isn't even about emotion. Human beings learn from past experiences and observation. Choose the thing that you've seen work, and avoid the thing that hurt you once. This is very rational, normally positive human decision-making for most aspects of our lives. It just doesn't necessarily work with financial markets. It's why the past performance line is in bold on every prospectus. But people will look at the performance numbers and choose the fund that's done the best over the past year...even though that has *no bearing* on how it'll perform in the *next* 12 months. You can even know better, and it's still *not easy* to mentally set aside that sexy 1-year performance number. It's just how our brains are wired.
And before anyone gets any ideas...if contrarian investing was easy, then we'd all be as rich as Warren Buffett.
This message was edited 4 times. Last update was at 2022/02/16 15:00:19
R 600% feels way more like hype when compared to the reality of the price and how much you can afford or would be comfortable affording to spend.
) Fees can vary, so be careful. But many of them aren't too expensive (and some are very cheap) since they may contain a lot of index funds anyway. I would still advise folks to talk to someone, but I think the target date funds can be really good tools when planning for retirement.
Then the stock lost about half its value. Note that means it's below what I bought it for. So the company was scrambling and still talking a good game, and I said "well, I'll dump some of it now, but hang onto some just in case it gets back to my original purchase price. Y'know, make my money back."