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(Some Guy)   Think Wall Street insiders have individual investors beat? You still have one advantage left over them. You may have forgotten it, but it's huge   (jewishworldreview.com) divider line 54
    More: Interesting, Wall Street, Motley Fool, Columbia Journalism Review, Henry Blodget, index funds, time horizon, annual percentage yield, Society of American Business Editors  
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7298 clicks; posted to Business » on 23 Jun 2013 at 2:41 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-06-23 02:46:17 PM
/ looks through boxes for those photos of Wall Street insider's Moms... they're here somewhere....
 
2013-06-23 02:50:25 PM
I might only be going to Purgatory?
 
hej
2013-06-23 02:52:21 PM
TFA mentions how holding stocks long term is almost certain to make you a profit, neglects to point out that the profit you'll earn is infintesimally small compared to what the big traders will get.
 
2013-06-23 02:54:44 PM
Here is the original article from Motleyfool, as opposed to the copy/paste job from subby's blog. And this includes graphs:
http://www.fool.com/investing/general/2013/06/18/your-last-remaining -e dge-on-wall-street.aspx?source=iaasitlnk0000003
 
2013-06-23 02:55:53 PM
What's the maximum anti-Obama ads and investing product ads that an "article" can have before it's no longer considered a real article?
 
2013-06-23 03:00:26 PM
The article uses the wrong terminology.  They are professional traders, not investors.
 
2013-06-23 03:08:43 PM
This article is cold comfort. Wall Street insiders don't often go all in on one stock; they hedge across many. Yes, a few tank, but the growth on the successful ones outstrips that.

40 consecutive high-yield quarters gleaned from preemptive cheat trading will absolutely destroy 10 years of solidly invested long term assets.
 
2013-06-23 03:12:03 PM
brokers don't make any money unless you pay into the system, they need new suckers to jump in, so come on we wont rip you off this time
 
2013-06-23 03:13:40 PM
img.fark.net
 
2013-06-23 03:19:00 PM
Greed also makes the big boys stupid. Just read The Big Short to see how small investors took advantage of the shared delusion that Wall Street had in regards to subprime housing loans.
 
2013-06-23 03:23:14 PM

hej: TFA mentions how holding stocks long term is almost certain to make you a profit, neglects to point out that the profit you'll earn is infintesimally small compared to what the big traders will get.


To be fair, you and I don't have the original capital to invest. You have to get really lucky to turn $50,000 into $5 million, while it is a lot easier to turn $1 million into $5 million.
 
2013-06-23 03:39:02 PM
My ability to invest long-term doesn't mean squat if the leeches on Wall Street tank a company to get short-term gains.
 
2013-06-23 03:45:18 PM
How did wall street bankers get all the money?

People gave it to them.

If you don't give them your money then they don't get it.
 
2013-06-23 03:45:26 PM
 And it's why any bumpkin who buys an index fund and forgets about it will beat the vast majority of professional money managers over time.

tada
 
2013-06-23 03:48:09 PM
Good grief, duh. Has anyone NOT figured out that there are two systems on the same market today? One is the long-term investors who have no interest in holding anything less than 5 years, and the second is the short-term traders. The short-term traders make the market swing wildly from one day to the next, and from I've been able to tell, the swings relate more to the news cycle than anything else. The investors trade according to the economics, and from those you see the longer term trends.
The two interact, but have such vastly different interests that you really can't make a generalization about the market as a whole unless you understand the two different motivations.

If you're an investor and you've done your homework right, you should just ignore your portfolio. You'll overthink things, second-guess, and move when you shouldn't if you've got your nose stuck to e-trade all day.

ImpendingCynic: My ability to invest long-term doesn't mean squat if the leeches on Wall Street tank a company to get short-term gains.


Those companies are easy to spot a mile away. And don't invest in index funds.
 
2013-06-23 03:48:29 PM

hej: TFA mentions how holding stocks long term is almost certain to make you a profit, neglects to point out that the profit you'll earn is infintesimally small compared to what the big traders will get.


did you miss the part about average?
did you miss the part where for ever big trader winner there is a big trader loser?

short term vs long term
funny how averages work out
 
2013-06-23 03:58:15 PM

Peki: If you're an investor and you've done your homework right, you should just ignore your portfolio. You'll overthink things, second-guess, and move when you shouldn't if you've got your nose stuck to e-trade all day.


This is basically what I straight-up told the guy with my portfolio. I'm going to put this money in and I intend to forget I have it.
 
2013-06-23 04:15:10 PM
NASDAQ will get back to 5000 any decade now.

img.fark.net
 
2013-06-23 04:39:14 PM
It's always good to stick with something long term.  For example, this site's use of PHP 3.
 
2013-06-23 04:42:23 PM

HempHead: NASDAQ will get back to 5000 any decade now.

[img.fark.net image 612x360]


There comes a time that a long-term investor decides to make a short-term change in strategy.  I managed to change my 401(k) mix at about the same time NASDAQ was melting down.
 
2013-06-23 05:06:12 PM
What they don't mention is that Wall Street insiders tend to get paid a helluva lot more than the average 401k holder or small time investor. Even if they don't keep their job for long, they'll end up with a significant amount of cash on their hands - which they can potentially invest for the long term, like the article suggests.
 
2013-06-23 05:09:16 PM

HempHead: NASDAQ will get back to 5000 any decade now.

[img.fark.net image 612x360]


2/10.  Take that chart out to June 2013, not 2009.
 
2013-06-23 05:23:36 PM

foo monkey: HempHead: NASDAQ will get back to 5000 any decade now.

[img.fark.net image 612x360]

2/10.  Take that chart out to June 2013, not 2009.


Your wish is my command. Here is 2013:
img.fark.net
 
2013-06-23 05:31:15 PM

HempHead: foo monkey: HempHead: NASDAQ will get back to 5000 any decade now.

[img.fark.net image 612x360]

2/10.  Take that chart out to June 2013, not 2009.

Your wish is my command. Here is 2013:
[img.fark.net image 797x303]


3/10, we can see your trollface
 
2013-06-23 05:32:03 PM

HempHead: NASDAQ will get back to 5000 any decade now.

[img.fark.net image 612x360]


The real distortion of that Nasdaq chart was caused by complete insanity:  we went through a period where people would say "earnings don't matter" with a straight face.  I don't think you'll see a repeat of the dot-com frenzy until many of today's traders are dead.
 
2013-06-23 05:38:59 PM

namatad: And it's why any bumpkin who buys an index fund and forgets about it will beat the vast majority of professional money managers over time.

tada


This. Though I would  add that the better way is to get a few (5 or less) index funds and dollar cost average into them over time. Getting average market returns is still better than panicking and selling when the market goes down, and then either never getting back in or waiting until the market has more than recovered to get back in.
 
2013-06-23 06:35:14 PM

Tommy Moo: This article is cold comfort. Wall Street insiders don't often go all in on one stock; they hedge across many. Yes, a few tank, but the growth on the successful ones outstrips that.

40 consecutive high-yield quarters gleaned from preemptive cheat trading will absolutely destroy 10 years of solidly invested long term assets.



Nothing says you can't diversify or invest in a fund. As others have said, grab an index fund and ride it. Pretty easy to make a modest gain in the long term.
 
2013-06-23 06:36:53 PM
What is this, some attempt to get me to feel good about my odds and feel sorry for Wall Street traders?  They don't look long-term because they never had such an inclination in the first place.  They CHANGED the market into a short-term game FFS; it's not like anyone put a goddamn gun to their heads.

You know, if they really hate it so much I hear there are farms south of here with a need for seasonal workers.
 
2013-06-23 06:44:32 PM
The problem is long term investment relies on strategic planning and the markets acting rationally.

Day Traders want the exact opposite. They artificially churn the market and try and make pennies in mass off the jitter.
 
2013-06-23 07:05:32 PM
long term stategic investing isnt sexy...hence cnbc hawks shows like fast money and mad money. that and $7 online trades make online brokerage firms money, not the buy and hold long term strategy.

/waiting for another housing bubble in 2 years
//if you are buying something based on little to no research, that is speculating not investing
 
2013-06-23 07:07:25 PM
When I asked my broker about my account losses he said, "Hey; I made money. The brokerage clearing house made money. Two out of three ain't bad!"
 
2013-06-23 07:30:45 PM

Outlaw2097: //if you are buying something based on little to no research, that is speculating not investing


There is a reason I don't use the phrase "play the market." I research, I invest, I study the market. I do not play.
 
2013-06-23 08:03:31 PM
Because I'm smarter than a chimp?

The long game is the one to play if you are patient, conservative, risk-adverse, but the really big money is made and lost on a handful of days over the course of a life-time. Only the big guys can luck out on a giant scale (and look like geniuses or complete morons). Still, I simply like Warren Buffet a lot more than the Jerks of Wall Street. If only we didn't have to pay for their bootstrapy mistakes and could simply hang them by their bootstraps. What I really miss is the stockbrokers jumping out of windows hand-in-hand with the failed speculators and crooks.

It's a shame windows don't open any more.
 
2013-06-23 08:10:42 PM
If the traders have their way the market will just jitter all year long around the same mean value. Then they will bleed off the money with HF trades and long term investors will be sunk.
 
2013-06-23 08:36:36 PM

assjuice: If the traders have their way the market will just jitter all year long around the same mean value. Then they will bleed off the money with HF trades and long term investors will be sunk.


HF trading should be illegal. It is nothing more than insider trading mixed with outright gambling. 
Best part: There are no taxes on these trades. There's one senator/rep trying to get a 10% tax put on each trade.
 
2013-06-23 08:45:21 PM

bionicjoe: HF trading should be illegal. It is nothing more than insider trading mixed with outright gambling.


This.

Trades should only be allowed one minute and posted the next minute.  No pre-info flashes to anybody.
 
2013-06-23 09:20:04 PM
And make sure you're not getting raped on fees when using a mutual fund.

/just get an index fund or age-based and make sure you're paying under 1%
 
2013-06-23 09:56:01 PM

bionicjoe: assjuice: If the traders have their way the market will just jitter all year long around the same mean value. Then they will bleed off the money with HF trades and long term investors will be sunk.

HF trading should be illegal. It is nothing more than insider trading mixed with outright gambling.
Best part: There are no taxes on these trades. There's one senator/rep trying to get a 10% tax put on each trade.


For what it's worth, Wall Street has already strangled that golden goose.  Over the past few years, the high-frequency trading space has gotten much more crowded, and there's much more competition to exploit the micro-fluctuations in the market (which have actually become less numerous as people shy away from the stock market), which has caused the ROI of high-frequency trading to collapse.

Source: Businessweek
 
2013-06-23 10:01:37 PM

bionicjoe: HF trading should be illegal. It is nothing more than insider trading mixed with outright gambling.


High Frequency Trading is actually low-latency trading. There's no gambling involved. It's insider trading at it's purest. You (well, your trading program) can see bids or offers appear in hundredths of seconds sooner than anyone else because your trading servers have lower network latency than anyone else; and if you see any "other side" offer at a profitable difference you buy and sell between those two parties, making a riskless profit for yourself, that no one else could take advantage of since NO ONE GOT TO SEE IT, SINCE YOU INTERCEPTED THE ORIGINAL BID (or offer).

    Best part: There are no taxes on these trades. There's one senator/rep trying to get a 10% tax put on each trade.

Not true, capital gains from trading is taxable. Your tax return might negate all those taxes due to other shenanigans, however. But individual trades are taxable.
 
2013-06-23 11:21:21 PM
So I'm good to go with my 10,000 shares of Enron!
I'm set for life.
 
2013-06-24 12:19:03 AM
The advantage you have over Wall Street is that while you can stockpile a good sum of money somewhere just before you die, they can get even more in their early 30s.  You should definitely be incredibly happy about this; it makes you superior.
 
2013-06-24 12:51:55 AM
I'm not in the market right now because I have active investment in merchandise. But if something happens and I come up with $100k to invest in the market I'd like to play with options. I'd love to sell covered calls, and maybe scour the news for things where everyone is talking confidence but it's a clear collapse in the making and do the puts/calls for whatever I find to be liable to change big.

Hey, 90% boring, and 10% going with a chance to return magnitudes of order. And the fees from selling covered calls are how you get dividends out of non-dividending stocks. Or even dividending stocks. I learned about it in 30 seconds of conversation with a portfolio manager that does this in the millions when he was calling about getting Bell Atlantic DSL.
 
2013-06-24 01:06:55 AM
Wow, I might be rich someday, after years of investment!  While they'll still get rich tomorrow.

I guess that's even.
 
2013-06-24 02:44:11 AM

ImpendingCynic: My ability to invest long-term doesn't mean squat if the leeches on Wall Street tank a company to get short-term gains.


This.

/thread.
 
2013-06-24 05:50:44 AM
Time, the great equalizer. In the end, everyone dies.
 
2013-06-24 06:37:41 AM

enry: And make sure you're not getting raped on fees when using a mutual fund.

/just get an index fund or age-based and make sure you're paying under 1%


This. Another option is Exchange Traded Funds. Pay commission when you buy and sell, but pay nothing to hold. Depending on how much you're investing, how long you intend to hold and what your trading commissions are, it could work out to be cheaper than even a < 0.5% service fee per annum.
 
2013-06-24 07:00:28 AM

namatad:  And it's why any bumpkin who buys an index fund and forgets about it will beat the vast majority of professional money managers over time.

tada


No way brah im totally a financial genius. Last year I got a 100 percent return on that stock I bought.

/I am so glad people believe this. The more people who return worse than the market the better for me.
 
2013-06-24 07:02:44 AM

Mad_Radhu: You have to get really lucky to turn $50,000 into $5 million, while it is a lot easier to turn $1 million into $5 million.


Step one: Get elected to Congress.
 
hej
2013-06-24 08:04:28 AM

namatad: hej: TFA mentions how holding stocks long term is almost certain to make you a profit, neglects to point out that the profit you'll earn is infintesimally small compared to what the big traders will get.

did you miss the part about average?
did you miss the part where for ever big trader winner there is a big trader loser?

short term vs long term
funny how averages work out


No, I understood that this was about averages.
 
2013-06-24 08:56:21 AM

nocturnal001: namatad:  And it's why any bumpkin who buys an index fund and forgets about it will beat the vast majority of professional money managers over time.

tada

No way brah im totally a financial genius. Last year I got a 100 percent return on that stock I bought.

/I am so glad people believe this. The more people who return worse than the market the better for me.


hehe. Actually, that's not the way the stock market works, hon. The market isn't a zero-sum gain; you don't win because someone else loses (unless you short, but that's a different discussion). Your stocks go up when other people want to buy the stock. You *want* other people to invest in the same company as you, you just don't want a bubble that then crashes. So this whole "I want other people to fail" is bs, because we all make more money if we invest similarly.

Nice way to see who is a selfish dick, though, so good job on outing yourself.
 
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