Any stock market traders here?

  • Thread starter Thread starter littlebird
  • Start date Start date
Status
Not open for further replies.
For all practible purposes, a bankruptcy sends the common stock price to zero. Common stock is at the bottom of the capital structure, ie everything else gets paid before owners receive anything. Bankruptcy is, by definition, debt is greater than assets. So in the reorganization or liquidation, the owners (ie common stockholders) get nothing. Bond holders and other creditors fight over the scraps.
 
Was that for me?

If so, we have stocks we currently hold and stocks on our “waiting list” so to speak, ready to step in when we need them. We run our fundamental/technical screens on them (as we do our active client portfolios) several times a day to see if any need to be added or deleted and act accordingly.

Since we add new clients all the time, unless we’ve just done a major realignment, everybody’s got different entry points. Over time, it all pretty much evens out.

That being said, if a new client comes onboard but a couple of the stocks we’d like to buy for them are too expensive at the moment but are “fundamentally” still “buys”, we hold off and look for a better entry. Sometimes we get an obvious one, sometimes not. If we don’t, we swallow hard and re-check our fundamentals then pull the trigger.

If a stock is fundamentally good and has a long-term record as such, it takes a lot of nervousness out of paying more than we’d like to.

I would love for this to be an exact science but, while we make these decisions based upon real data, sometimes it doesn’t work that way.
 
I think it maybe harder to short now too ? I was playing with some short orders and a “hard to borrow” icon would pop up.
 
They close the short-selling window at some point. I believe the bk judge determines this.
 
People who steadily invest wisely with low expenses outperform day traders in the long run. Even those that use “play money” would do better investing for the long term. I believe in keeping some cash on the side in frothy markets in case there is some opportunity buying in a downturn.
 
I disagree there.
If two people start with the same amount of money and one is a day trader and one is long term trader and both are wise investors/traders, the day trader will have a much higher annual return than a long term trader.
For example, if you trade one stock , one time per year , a day trader can trade one stock hundreds of times per year.
 
If you honestly believe this, better for you to light a fire with your money. At the very least it will keep you warm and provide a short period of entertainment.
 
By the time there is a bankruptcy judge, common stock us likely worthless, too late to short.
 
Very unlikely to be true. Long term investors are looking for value appreciation. The economy grows, companies grow, prices move up overtime.

Day traders are simply playing very short term market inefficiencies. They really do not take part in long term growth. So when you are only playing for market inefficiencies, it becomes a zero sum game. Anytime one person profits, another looses.

Long-term investment is most certainly not a zero sum game.

The best traders in the world work for hedge funds. Almost none of them are day traders, they are short term traders holding positions for weeks or months. And these guys do not have returns that beat the market by much.
 
While my firm has an excellent history of good returns, we, generally, only beat the broad market by a little bit. I make it clear to my new clients that we will get you good returns, but our real value is in our disciplined selling when necessary and keeping a cool head when the market is being weird.
 
I really doubt you’ll have a much higher return. This isn’t twenty years ago during the dot com boom (then bust). For some reason you think you’re smarter than everyone else and will succeed. I hope you do, but doubt you will. However, if you start socking money away in either low cost ETFs or mutual funds, or learn to pick good quality growth stocks, and don’t bail every time the market drops, you’d do fine. I’ve been very successful with that method.
 
You would be better off putting a large sum of money in some blue chip stocks and letting it sit for a year. I bought stock in Apple, Microsoft, and Disney right after Christmas and I am up $4000 since then. It’s not gonna make you rich but it’s better than letting your money sit in a savings account, and less risky than day trading.
 
Sorry, I am not sure how I was arrogant or egotistical.

ETF’s aren’t enough for me.
If I put $ 100,000 into an ETF , I will not realize a gain of more than $ 50,000 per year if I happen to choose one of the top 5 ETF’s.
 
That’s great ! Good job ! Blue chips seem reasonably safe. They also used to hold up well to large corrections. I have been out of the market for 20 years so I am not sure how stocks will react now.
 
Imagine if you had bought MSFT, APPL or AMZN twenty years ago and hung on to them.
 
I never said you were. If I implied it, I assure you it was unintentional. You have my apology none the less.
 
Last edited:
I also am not directing you towards ETFs or any other product. Most certainly not. I am trying to highlight the difficulties of day trading. I would say this, if you are going to be any type of trader, you must understand the internal structure and mechanisms of the market. Indeed, I would say it’s next to impossible to profit with out a thorough understanding of this. Today, that includes ETFs, high speed traders, options, etc. Not because you are trading these things, but because they have a big effect in short term prices. Other people do use them, extensively.
 
Status
Not open for further replies.
Back
Top