to keep is simple, as I don’t know just how much you know (and I’m still very new myself tbh)
it’s all purposefully complicated with obscure rules and exceptions, all specifically meant to trip up new “players”, breaking some in the wrong way can land you in prison, while a slight variation might be perfectly fine.
what helped me the most is understanding just how truly rigged the whole thing is, and what helped the most there was a book called Reminiscences of a Stock Operator, everything in it applies frighteningly well to modern day markets even though it was written over 100 years ago.
the biggest most important lesson is…look at everything like a scam designed specifically to extract as much $ from you as possible (which, is especially in low overall-trading volume levels like now, is 100% true. that’s fundamentally what bubbles are, people deliberately running the price of stocks up). it’s a zero-sum game, in order for you to gain someone else has to lose.
whether that’s bonds, stocks, futures, whatever.
but…there are 2 very fundamental rules that always reassert themselves eventually.
the true value of the underlying security, and if a company doesnt pay out a dividend…that means it’s stock is functionally worthless
the line MUST go up/down eventually
the more of a disconnect between those 2 things there is, the more someone who knows 1 can take advantage of someone who only thinks in terms 2.
and the best way to do that (for plebs atleast) is…exercising stock-options.
the US market, contrary to…literally every other market on earth, has this little rule that allows you to exercise options early.
so for example, say someone sells you a put option on SPY 3 years out, strike…780.
right now that’d cost about 12,500/contract to buy. if you bought that and SPY dropped under 655 anytime in the next 3 years…you could exercise it immediately for a profit.
right now spy is 658…a 3 point drop between now and 3 years out…that’s practically guaranteed. free $.
but when someone executes those contracts on you, if you don’t have the underlying, 1 of 2 things happens…you start paying your broker interest to borrow the underlying (at an ever increasing rate) or they forcibly close your position, which if your over-leveraged enough means…you get liquidated.
the issue is though, in a bubble, when everything is overvalued…how to do you safely play the casino without owning the underlying?
Thank you for writing all that up. I don’t understand most of it but it gives me a starting point.
When TRUMPCOIN dropped right after Jan 20th I figured his goal was to break the economy so I just moved everything I was allowed to move into gold figuring it would be better to have gold than USD. So far that has paid off. I have several bond investments I’d have to take penalties to move so I left them alone. Given the state of things now I wish I’d gone ahead and done it.
Did selling all my stocks and buying gold reduce market liquidity at all?
unless whatever “gold” you bought into actually delivered you physical gold or pays out a dividend…it’s probably being played the same as everything else, thats the whole point of a bubble.
bonds are a whole other beast, as bonds whole point is to act as a safe secure longterm investment…when the wolves run the show…their whole goal is making everything unsafe. they’re trying to “shake people out”
hence, mass devaluation of USD, ontop of out of control inflation (being hidden in crypto), and undermining any and all sources reliability like say…replacing heads of various “independent” federal agencies meant to report on the economy (and mass firings in those orgs). and of course…that ol’ sovereign debt crisis that pops up every 3-6 months.
if your goal is keeping your nestegg safe, nothing connected to the US economy/USD is safe until the wolves are gone.
but overall…you can just follow buffets advice, put your $ in stuff you know and don’t mind holding a long time.
if you already sold your stocks…i’d look over everything you sold and see where it stands now, buying back might still a good deal. hell maybe it dropped since and you get a discount, who knows.
they’re playing a dangerous game…if they (the people behind trump) forget rule 1, they arent the oldest players and that means they definitely don’t have the lowest cost basis. they fuck over or steal from the wrong people too many times and eventually they will get wiped out themselves (though forcing institutions to start offering and by extension buying crytpo, because they have hedge…smart move…)
I have no interest in finance but I have a big retirement account. Can you explain how to do this so I can help too?
to keep is simple, as I don’t know just how much you know (and I’m still very new myself tbh)
it’s all purposefully complicated with obscure rules and exceptions, all specifically meant to trip up new “players”, breaking some in the wrong way can land you in prison, while a slight variation might be perfectly fine.
what helped me the most is understanding just how truly rigged the whole thing is, and what helped the most there was a book called Reminiscences of a Stock Operator, everything in it applies frighteningly well to modern day markets even though it was written over 100 years ago.
the biggest most important lesson is…look at everything like a scam designed specifically to extract as much $ from you as possible (which, is especially in low overall-trading volume levels like now, is 100% true. that’s fundamentally what bubbles are, people deliberately running the price of stocks up). it’s a zero-sum game, in order for you to gain someone else has to lose.
whether that’s bonds, stocks, futures, whatever.
but…there are 2 very fundamental rules that always reassert themselves eventually.
the true value of the underlying security, and if a company doesnt pay out a dividend…that means it’s stock is functionally worthless
the line MUST go up/down eventually
the more of a disconnect between those 2 things there is, the more someone who knows 1 can take advantage of someone who only thinks in terms 2.
and the best way to do that (for plebs atleast) is…exercising stock-options. the US market, contrary to…literally every other market on earth, has this little rule that allows you to exercise options early.
so for example, say someone sells you a put option on SPY 3 years out, strike…780. right now that’d cost about 12,500/contract to buy. if you bought that and SPY dropped under 655 anytime in the next 3 years…you could exercise it immediately for a profit.
right now spy is 658…a 3 point drop between now and 3 years out…that’s practically guaranteed. free $.
but when someone executes those contracts on you, if you don’t have the underlying, 1 of 2 things happens…you start paying your broker interest to borrow the underlying (at an ever increasing rate) or they forcibly close your position, which if your over-leveraged enough means…you get liquidated.
the issue is though, in a bubble, when everything is overvalued…how to do you safely play the casino without owning the underlying?
Thank you for writing all that up. I don’t understand most of it but it gives me a starting point.
When TRUMPCOIN dropped right after Jan 20th I figured his goal was to break the economy so I just moved everything I was allowed to move into gold figuring it would be better to have gold than USD. So far that has paid off. I have several bond investments I’d have to take penalties to move so I left them alone. Given the state of things now I wish I’d gone ahead and done it.
Did selling all my stocks and buying gold reduce market liquidity at all?
unless whatever “gold” you bought into actually delivered you physical gold or pays out a dividend…it’s probably being played the same as everything else, thats the whole point of a bubble.
bonds are a whole other beast, as bonds whole point is to act as a safe secure longterm investment…when the wolves run the show…their whole goal is making everything unsafe. they’re trying to “shake people out”
hence, mass devaluation of USD, ontop of out of control inflation (being hidden in crypto), and undermining any and all sources reliability like say…replacing heads of various “independent” federal agencies meant to report on the economy (and mass firings in those orgs). and of course…that ol’ sovereign debt crisis that pops up every 3-6 months.
if your goal is keeping your nestegg safe, nothing connected to the US economy/USD is safe until the wolves are gone. but overall…you can just follow buffets advice, put your $ in stuff you know and don’t mind holding a long time.
if you already sold your stocks…i’d look over everything you sold and see where it stands now, buying back might still a good deal. hell maybe it dropped since and you get a discount, who knows.
they’re playing a dangerous game…if they (the people behind trump) forget rule 1, they arent the oldest players and that means they definitely don’t have the lowest cost basis. they fuck over or steal from the wrong people too many times and eventually they will get wiped out themselves (though forcing institutions to start offering and by extension buying crytpo, because they have hedge…smart move…)
I just moved it to COMEX. I’m a bit intimidated to try to manage a half million USD of physical gold deliveries. What can I do?