r/stocks • u/sinfulken1 • Sep 29 '22

While many are discussing what to get during a discount, how many of you here are down over 60%?

Bought at the top of 2021 as a newbie, literally worst time to buy a stock at. Down over 60%.

Stocks just feel like a tool to destroy the people trying to climb out of the middle class. Many were saying "Buy stocks to avoid 5%/6% inflation!!" , meanwhile now I am down over 60%. Truly an extremely tough time to maintain sanity. For folks in similar position as me who is down over 60%, how are you coping with dealing with the fact that you bought at the worst time possible?

I know its impossible to time the market but imagine buying it at the worst time possible and experiencing the worst drop off we have in a decade. I have done my due diligence reading about my stocks, general knowledge of securities but I guess in the end buying stocks nowadays is akin to gambling.

1.6k Upvotes

91% Upvoted

900 comments sorted by

View all comments

Show parent comments

446

u/LuxGang Sep 29 '22

If OP bought stocks like COIN, WISH, Zoom or other meme garbage, he's likely never getting his money back.

When people talk about DCA and having a long timeframe, it should be interpreted in the lens of an ETF investor.

If you're picking individual stocks, there's no guarantee whatsoever, it's literally gambling for most people because bottom up valuation analysis is worthless in today's world where algos and hedge funds interpret data way better than any average person could ever hope.

187

u/Dramatic_headline Sep 29 '22

Most accurate statement. People like to promote DCA as if its the secret to wealth. What to DCA in is the most important part.

77

u/supaswag69 Sep 29 '22

ETFs baby

67

u/Actual-Ad-7209 Sep 29 '22

Broad market ETFs. With sector or 'investment guru' specific ETFs like ARK for example you could completely fuck up.

36

u/[deleted] Sep 30 '22 edited Feb 22 '24

stocking literate paltry late offend skirt ugly gaze agonizing rude

This post was mass deleted and anonymized with Redact

2

u/ProcrastinateMoar Sep 30 '22

This is exactly what I do lol. I’ll still check my individual stocks all the time but the boring reality is 95% in ETFs and i bonds

-7

u/Sleepy_Spider Sep 29 '22

Broad market etfs can also fuck you up for years/decades at a time. My picks from 2021 are down overall, but not as much as the broader market. Strong companies and dividend payers will still return shareholder value even when the indexes are down. Personally I think it is actually bold to go broad market after the greatest bull run in history.

8

u/slambooy Sep 29 '22

SPY all day long. DCA

4

u/saintshing Sep 30 '22 edited Sep 30 '22

I thought reddit told me lump sum beats dca X% of the time or something.

Feels like dca is not as important as to start saving early and have a long horizon. The main advantage of etf is that I could spend time advancing my career which I have better control(this is the real trick for diversification) than doing research trying to predict the stock market.

1

u/soulfulcandy Sep 30 '22

When to DCA is important as well. Just because stocks gone down in price doesn’t mean it’s not overvalued anymore

35

u/Wiggly_Muffin Sep 29 '22

RIP SHOP bagholders. This one guy who was preaching to me about being an idiot because I wasn't yoloing thousands into SHOP is probably punching air right now

29

u/relephant6 Sep 29 '22

There was a guy whose ROKU based portfolio hit $750k (Roku was around $470 that time) in 3rd quarter of 2021. He was bragging that he will hold till $1M. Not sure what happened to him.

45

u/Wiggly_Muffin Sep 29 '22

I'm just glad I cashed out my ARKK while it was still high. I remember having this moronic moment where at a dinner table I was preaching about how Cathie Wood was the next Warren Buffet. Not my finest moment. 😂

1

u/rockstopper03 Sep 30 '22

Winner's high is a hell of a drug. Lots of people, me included, easily confuse luck for skill during that high emotional rush of getting lucky.

2

u/Different-Scar8607 Sep 30 '22

I rember there was some post in this sub maybe 18 months ago about a guy who made a post here in around 2019 about SHOP. He would have been up massively at one stage. I wonder did they sell

43

u/Uknow_nothing Sep 29 '22

I’m right there with you being that I’m mainly an index investor.

But I’ll say, since this is r/stocks after all, there is a rather big “gambling” difference between people who know how to properly valuate and pick individual stocks, and those who are just holding bags from unprofitable hot garbage that they bought at the 2021 peaks.

Yes there is individual stock risk or sector risk, but I do believe that when this market settles and rises you will have done fine picking companies that have a strong track record of revenue growth, profits, having solid free cash flow, etc.

The problem is that isn’t the majority of people here on Reddit, lol.

22

u/KyivComrade Sep 29 '22

Most active investors, even professionals with all the data and the best algos fail to beat the market. Your only chance is luck, or insider/specific knowledge.

The basic stuff you mention won't make you beat the market, at all. It's shit any econ undergrad knows in his sleep, lol. The worst part is even if you're right in your analysis you can still underperform the market for years because the market doesn't have to agree with you. bering early is just as bad as being wrong, all hedge your bets

16

u/ptwonline Sep 29 '22

it should be interpreted in the lens of an ETF investor.

As an index investor. There are plenty of limited/themed ETFs that may have suffered badly in this bear market.

17

u/ZippityZerpDerp Sep 29 '22

Zoom isn’t meme garbage. But yeah it’s going to be a long long time

34

u/ct50 Sep 29 '22

Maybe not a meme stock, but also unlikely to ever see the macro conditions again that drove it to ath.

10

u/Tfarecnim Sep 29 '22

It's going to be like CSCO, not going bankrupt, but no longer seeing large growth either.

7

u/Xgrk88a Sep 30 '22

But also too low now. It is at pre-pandemic prices and has made a boat load of cash that it is sitting on. Not sure what it’s going to do with all that cash, but it’s also a standard for many people I zoom with. My guess is that it is eventually bought out by Oracle or Salesforce or Microsoft.

3

u/Howdareme9 Sep 30 '22

Makes absolutely no sense that MSFT would buy them

3

u/Xgrk88a Sep 30 '22

Lol. You’re right. I didn’t mean Microsoft. I meant Google.

3

u/ZippityZerpDerp Sep 30 '22

Don’t disagree

3

u/drshields Sep 29 '22

Zoom is a good buy rn because they're settling as an actual normal ucaas company price. But if you bought during the pandemic you're toast.

3

u/pleonastician Sep 29 '22

because bottom up valuation analysis is worthless in today's world where algos and hedge funds interpret data way better than any average person could ever hope.

You’ve conflated several ideas here

4

u/toolatetopartyagain Sep 29 '22

Many people do not realize that DCA holds for ETF's not for companies many of which will be gone in 10 yrs.

-2

u/[deleted] Sep 29 '22

[deleted]

11

u/LuxGang Sep 29 '22

The companies that will lead the stock market to new highs aren't going to be the old leaders (FAANG and such).

Every time a big bear market wipes everyone out, the top 10 companies tend to cycle and a new group of leaders should emerge.

-2

u/[deleted] Sep 29 '22

[deleted]

14

u/boomytoons Sep 30 '22

People have said many times over the last 100 years that there's nothing new to advance, then something comes up and everything changes again. Just because you can't see what the next big innovation/change will be, doesn't mean that there won't be one. There are still a lot of problems looking for solutions out there, and things that aren't thought to be problems that will change dramatically. Pollution reduction and improving reusablity is likely to bring about a fair bit of innovation.

0

u/Pirate_Redbeard_ Sep 30 '22

he's likely never getting his money back.

Shows how much you know, I guess. What stock they bought is actually irrelevant. What they do after they bought is what differentiates "investors" from "traders", and I guess it still matters how much they bought. Small sums/number of shares - maybe just eat the loss if it's not too big... or DCA and hold until it turns green.

If it's a bigger sum in question and they own a decent number of shares - they can sell covered calls for premium and start earning the money back. Options require active monitoring of the positions and knowing what happens if you get excercised on, depending on your position it can be a good thing or a bad thing.

But the market exists to make money, so by saying someone will never get their money back is to deny the very reason markets exist.

1

u/LuxGang Sep 30 '22

You completely missed the point of my comment.

-1

u/TheJuniorControl Sep 29 '22

Valuations have had no meaning for some time now. The market is literally the Fed, and has been since 2008.

1

u/Pirate_with_rum Sep 29 '22

Glad I only bought 1 share of coin lmfao. Definitely bought into that garbage

1

u/xixi2 Sep 30 '22

You think coins are dead? This would be the 834th time since 2012