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This Is Why You Don't Follow Headlines And Trend

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    This Is Why You Don't Follow Headlines And Trend

    As I am writing this, the stock I have convinced successfully people here to not short at $180s was Tesla. Currently it is up 66% since that number and will continue to go higher most likely in the near term. Shorting Tesla at 180 would not only get you margin called, but you will be sitting at a -125% loss.

    Shorting stocks IMO is mathematically stupid. The potential gains doesn't offset the risk of losing MORE than what you put in. Only time I would recommend shorting a stock is if you literally found credible fraudulent behavior SEEN BY YOUR VERY EYES. Going by what headlines will tell you will be the best way for you to lose money. You really have to do your research hardcore before shorting..but the problem with shorting is that you end up dealing with conspiracy theories and short sighted analysis.

    I of course heavily bought in along the way and currently sitting on 50k worth of unrealized gains. I was -30k when Tesla was at the 180s and predicted that before the year end I'll be in the black.


    #2
    Originally posted by Singuy View Post
    As I am writing this, the stock I have convinced successfully people here to not short at $180s was Tesla. Currently it is up 66% since that number and will continue to go higher most likely in the near term. Shorting Tesla at 180 would not only get you margin called, but you will be sitting at a -125% loss.

    Shorting stocks IMO is mathematically stupid. The potential gains doesn't offset the risk of losing MORE than what you put in. Only time I would recommend shorting a stock is if you literally found credible fraudulent behavior SEEN BY YOUR VERY EYES. Going by what headlines will tell you will be the best way for you to lose money. You really have to do your research hardcore before shorting..but the problem with shorting is that you end up dealing with conspiracy theories and short sighted analysis.

    I of course heavily bought in along the way and currently sitting on 50k worth of unrealized gains. I was -30k when Tesla was at the 180s and predicted that before the year end I'll be in the black.
    Singuy, even if there is fradulent behavior that you've seen with your own eyes...it still may not matter if the market doesn't believe it or doesn't know about it.
    james.c.hendrickson@gmail.com
    202.468.6043

    Comment


      #3
      Originally posted by james.hendrickson View Post

      Singuy, even if there is fradulent behavior that you've seen with your own eyes...it still may not matter if the market doesn't believe it or doesn't know about it.
      True, but I'm talking about you went behind enemy lines and spotted clear fraud like the Journalist who went to Thernos. It's incredibility rare for anyone to have that kind of information. But hey, if you do, short away.

      I argue that most "fraudulent" behavior claimed by shorts are conspiracy theories. I couldn't find a good way to short any stock, especially when over time, the market will always go up. I have a friend who started a total stock market short position. He is down more than 20% while the rest are enjoying their gains and dividends...while he is paying 8% interest. And you are betting against the word "ALWAYS go up"...Which means you will lose 100% of the time if you shorting period is long enough...and not to mention losing an infinite amount..all for what?..a Trump tweet that would tank the market 10% or a recession of a 20% gain?
      Last edited by Singuy; 10-24-2019, 02:57 PM.

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        #4
        Originally posted by Singuy View Post

        True, but I'm talking about you went behind enemy lines and spotted clear fraud like the Journalist who went to Thernos. It's incredibility rare for anyone to have that kind of information. But hey, if you do, short away.

        I argue that most "fraudulent" behavior claimed by shorts are conspiracy theories. I couldn't find a good way to short any stock, especially when over time, the market will always go up. I have a friend who started a total stock market short position. He is down more than 20% while the rest are enjoying their gains and dividends...while he is paying 8% interest. And you are betting against the word "ALWAYS go up"...Which means you will lose 100% of the time if you shorting period is long enough...and not to mention losing an infinite amount..all for what?..a Trump tweet that would tank the market 10% or a recession of a 20% gain?
        Actually...I think some people have precisely that business model. They hire journalists to investigate a company they suspect is engaging in fraud, then after the journalists release their report, they short the company. I think the key part is...if the company is fraudulent, there is no good opportunity to short the stock if nobody is aware of the fraud.

        I don't think Tesla is a fraudulent company. I'm seeing more and more of their cars on the road.
        james.c.hendrickson@gmail.com
        202.468.6043

        Comment


          #5
          Originally posted by Singuy View Post
          Shorting stocks IMO is mathematically stupid.
          Betting that a stock is going to go down is definitely a gamble. Any bad news about the company is most likely already reflected in the price. The market is pretty efficient that way. So what you're really doing is betting that something bad is going to happen that nobody knows about and hasn't actually happened yet. Good luck with that.
          Steve

          * Despite the high cost of living, it remains very popular.
          * Why should I pay for my daughter's education when she already knows everything?
          * There are no shortcuts to anywhere worth going.

          Comment


            #6
            Originally posted by Singuy View Post
            As I am writing this, the stock I have convinced successfully people here to not short at $180s was Tesla. Currently it is up 66% since that number and will continue to go higher most likely in the near term. Shorting Tesla at 180 would not only get you margin called, but you will be sitting at a -125% loss.

            Shorting stocks IMO is mathematically stupid. The potential gains doesn't offset the risk of losing MORE than what you put in. Only time I would recommend shorting a stock is if you literally found credible fraudulent behavior SEEN BY YOUR VERY EYES. Going by what headlines will tell you will be the best way for you to lose money. You really have to do your research hardcore before shorting..but the problem with shorting is that you end up dealing with conspiracy theories and short sighted analysis.

            I of course heavily bought in along the way and currently sitting on 50k worth of unrealized gains. I was -30k when Tesla was at the 180s and predicted that before the year end I'll be in the black.
            I am happy TSLA is going up. Helps my index funds go up.

            Comment


              #7
              Originally posted by corn18 View Post

              I am happy TSLA is going up. Helps my index funds go up.
              Too bad your Index funds carry very little TSLA since it's a high volatile stocks and actually went down due to poor Amazon performance today more than anything.

              Comment


                #8
                The herd is usually wrong, investing and otherwise.
                Never underestimate the power of stupid people in large groups.

                -George Carlin

                Comment


                  #9
                  according to vanguard website Tesla is 0.1% of VTI/VTSAX (Total US funds)
                  Last edited by Jluke; 10-24-2019, 11:39 PM.

                  Comment


                    #10
                    Originally posted by Singuy View Post

                    Too bad your Index funds carry very little TSLA since it's a high volatile stocks and actually went down due to poor Amazon performance today more than anything.
                    Well, it's not really "too bad", since one can load up on TSLA or any other stock easily enough if that is what one wishes to do.

                    Comment


                      #11
                      Originally posted by TexasHusker View Post
                      The herd is usually wrong, investing and otherwise.
                      hmmm........ how about that index funds herd...

                      Comment


                        #12
                        Originally posted by Captain Save View Post

                        hmmm........ how about that index funds herd...
                        I think TH's point is valid. Watch the inflow of money to those index funds. It peaks when the market is hitting record highs and the outflow - people cashing out - peaks when the funds hit bottom. Exactly the opposite of what you should be doing.

                        The problem isn't the index funds themselves. They're perfectly fine. The problem is people misusing them.

                        I'm old enough to have seen the cycle a few times. Market climbs to record levels. People start pouring money into stocks and funds. Then the correction comes and prices fall. People cash out and sit on the sidelines and wait for the market to recover before they tiptoe back in, missing the recovery in the process.
                        Steve

                        * Despite the high cost of living, it remains very popular.
                        * Why should I pay for my daughter's education when she already knows everything?
                        * There are no shortcuts to anywhere worth going.

                        Comment

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