OFFICIAL Facebook IPO Thread

[teatree]

There are a number of private hedge funds that consistently beat the market, but none of them have the history that Berkshire does. Although they are actual hedge funds whereas Berkshire is essentially a holding company.

Most hedge funds make their money out of the fees they take out from clients money. In fact most of the administrators of mutual funds make money from fees too, and the more trading they do, the more fees get shaved off. Investing is a form of gambling where only the house wins.

If you really want to "invest" plough money into your own business or into land. If you look at the richest people in the world - apart from Buffett, who is a one-off, they all made their money from business or land-owning.

Given the global "depression", one really interesting example is Joseph Kennedy. He made his initial money as a stock broker, but that was when insider trading was legal, and he got lots of inside tips. If you tried that now, you'd go to jail. But here's the interesting thing: he famously sold early but in 1929 he was worth "just" £4 million (that is, his gains all crystallised before the stock market crash, so at it's very height). But by 1935 he was worth $180 million. So he's minting it in the middle of the great depression.

It was down to a) having money to pick up bargains when no-one else had a dime and b) investing that money into real estate and real businesses (he bought a bankrupt chain of movie theatres at a time when going to the movies was the opium of the masses). Interestingly, he didn't plough his money back into the stock market - he moved onto to real things (probably his goal all along).

The moral of the story is that the only people who make money out of stocks are those who do it short-term and cash in, and arn't tempted to gamble again and lose their money, but divert it instead into acquiring real assets and businesses.

If you keep just doing stocks, over the long-run you lose, just like most gamblers in casinos do. Part of it is down to lack of information - if you actually own a business, you have all the information about it at your finger-tips and can influence it's direction. If you are buying listed stocks, you only know what they deign to tell you 'cause they are forced to by law, and you have zero influence over the direction of the company.

 

[Jeeta]

Trading is just another business, and like affiliate marketing if you have a edge over your competitors you can make a fuck ton of money. Trading is a game of skill, like poker it has very little to do with actual luck.

If winning wars is about luck, someone bring me the "lucky soldiers".

Anybody who's read the book "The Art Of War" by Sun Tzu will know what I'm talking about.

99.999% of people haven't got to worry about having much of and edge anyway, because you're going to need $25 million plus before you even start to have an effect on price, thus needing to start masking what you're doing.

 

[CCarter]

Hmm, i don't know alot about NickyCakes, but he can jack a thread and take it into left field rather quickly... This same discussion was had already in another thread, like 2 weeks ago.

So Facebook...

 

[dchuk]

Trading is just another business, and like affiliate marketing if you have a edge over your competitors you can make a fuck ton of money. Trading is a game of skill, like poker it has very little to do with actual luck.

If winning wars is about luck, someone bring me the "lucky soldiers".

Anybody who's read the book "The Art Of War" by Sun Tzu will know what I'm talking about.

99.999% of people haven't got to worry about having much of and edge anyway, because you're going to need $25 million plus before you even start to have an effect on price, thus needing to start masking what you're doing.

I agree that stock trading is very similar to affiliate marketing in the sense that you are arbitraging (and you don't directly have customers).

However, as most big affiliates find out over time, their only asset is their skill in driving traffic that leads to big payouts from the offers they're pushing. If that traffic source dies or the offer dies, they're dead. Similar to stocks, you have little to no control over the actions of the company you're purchasing a percentage of, and that company's actions dictates what happens to its stock price.

I think stock trading/affiliate marketing is a good skill, but I wouldn't particularly consider it a business in the traditional sense at least. Businesses generally have assets that possess an inherent value, so unless you sold yourself along with your affiliate marketing company, there's really not much there.

 

[mGrunin]

Still doing well day trading Apple and a good chance that I'll sell all my FB positions tomorrow!

[ame=http://www.youtube.com/watch?v=PQ3oh_X-9L4&feature=]Trading to Riches - June 7, 2012: +$1474.00 - FB Last Hour Crash! - YouTube[/ame]

 

[infoslob]

Still doing well day trading Apple and a good chance that I'll sell all my FB positions tomorrow!

Trading to Riches - June 7, 2012: +$1474.00 - FB Last Hour Crash! - YouTube

I would say leaving this stock on your terms and not under duress is a serious win. 5.9% of its float is short, it's the most shorted stock in the market. That would automatically make me nervous.

 

[mGrunin]

I would say leaving this stock on your terms and not under duress is a serious win. 5.9% of its float is short, it's the most shorted stock in the market. That would automatically make me nervous.

I agree. Too much can also happen over the weekend, so the opening on Monday would make me uncomfortable. Once the opportunity is there tomorrow, I'm going to put aside my greed and "cash out" on my FB positions.

If next week Monday comes along and the stock is still dropping, I might re-buy but only about 15-20 contracts at most.

 

[CCarter]

FB's starting to rise this morning... what the hell.

 

[r3p1v]

UBS may have lost as much as $350 million on FB :O

 

[Otinsdale]

you should just throw some cash in 24option and do binary options trading with facebook stock if you're sure of the continued fall.

 

[pocketrockets]

I would say leaving this stock on your terms and not under duress is a serious win. 5.9% of its float is short, it's the most shorted stock in the market. That would automatically make me nervous.

There are far higher short interest % out there than FB. But it's definitely ticking up and something to be aware of (nearly 60% of BKS is short!)

 

[mGrunin]

Incurred decent bit of losses today. I'll have a video up about it tonight. Took a good loss, but I don't give a fuck. Going out to bang my girl. Take care.

 

[infoslob]

you should just throw some cash in 24option and do binary options trading with facebook stock if you're sure of the continued fall.

Binary options, you gotta win twice. Sometimes the bigger feat is to collect your winnings and principal from the dealer than to beat the market itself. Good luck!

 

[r3p1v]

And, again, this is the only example, out of millions.

Just read this comment by "Old Limey" today:
Your Money or Your Life, The Crossover Point (Free Money Finance)

 

[nickycakes]

Just read this comment by "Old Limey" today:
Your Money or Your Life, The Crossover Point (Free Money Finance)

Umm, so that guy made money on the dotcom bubble and cashed out before it crashed. Cool story.

 

[r3p1v]

Umm, so that guy made money on the dotcom bubble and cashed out before it crashed. Cool story.

I thought you said it wasn't possible to beat the market over a long period of time?

He managed his investments and gained an average of 17%/year over 20 years. It wasn't just the dotcom bubble. He said he moved into bonds in 2007. Bonds have outperformed the stock market over the past couple of years.

 

[nickycakes]

I thought you said it wasn't possible to beat the market over a long period of time?

He managed his investments and gained an average of 17%/year over 20 years. It wasn't just the dotcom bubble. He said he moved into bonds in 2007. Bonds have outperformed the stock market over the past couple of years.

If you read it, (and keep in mind this is anecdotal evidence posted by some random in the comments of an article), he made nearly all his money gambling on stocks before the dot-com bubble burst, then sold right before it collapsed, and then proceeded to not beat the market after that, a good majority of the time barely beating inflation. He essentially gambled, and then quit while he was ahead, followed by losing.

 

[r3p1v]

If you read it, (and keep in mind this is anecdotal evidence posted by some random in the comments of an article), he made nearly all his money gambling on stocks before the dot-com bubble burst, then sold right before it collapsed, and then proceeded to not beat the market after that, a good majority of the time barely beating inflation. He essentially gambled, and then quit while he was ahead, followed by losing.

1992 - 2000: 38% return per year (beating market averages)

March 2000 - sold everything right after it peaked (beating market averages because he was in cash while the market was selling off.)

Nov 2000 to 2007 - looks like he averaged what the market did.

Nov 2007 to today - was in bonds which beat the market because the market collapsed.

He beat the market over a 20 year period. Why does it matter how he did it? It's possible to beat the market over long periods of time.

 

[nickycakes]

1992 - 2000: 38% return per year (beating market averages)

March 2000 - sold everything right after it peaked (beating market averages because he was in cash while the market was selling off.)

Nov 2000 to 2007 - looks like he averaged what the market did.

Nov 2007 to today - was in bonds which beat the market because the market collapsed.

He beat the market over a 20 year period. Why does it matter how he did it? It's possible to beat the market over long periods of time.

looks like he beat the market for 8-12 years out of 20. hardly a long period of time by anyones standards. I could go to vegas tonight and win 12/20 hands of blackjack. Would you say I'm winning over long periods of time? I doubt anyone would.

 

[r3p1v]

looks like he beat the market for 8-12 years out of 20. hardly a long period of time by anyones standards. I could go to vegas tonight and win 12/20 hands of blackjack. Would you say I'm winning over long periods of time? I doubt anyone would.

Well, it's almost equally impressive that he didn't lose a lot of his gains. He took advantage of the upside and avoided a lot of the downside in the markets. If you think it's impossible to beat the market over long periods of time, shouldn't his returns averaged out to normal or worse than the market average after 20 years?

You can obviously beat the market if you are really smart or lucky or both. I agree though that very few do and many try to beat it and end up under performing the market.