Down goes the Dow

Prof. Racket wrote:

seattle prattle wrote:

Apple announced earnings ...

Surging

Recession canceled, omicron defeated.

Racket wins yet another bet

Yeah, but lest you forget: bizarro universe.

Will probably sell of tomorrow.

Go figure.

Kidding aside, it kicked the tech funds out of the red from the close into solidly positive territory afterhours. Thank you, Apple.

Dude, what the hell. You don't need to repeatedly explain the general idea of what a margin call is or the general idea of how it happens. I've made it clear I understand that. The point is that if you're buying an ETF such as VOO AFTER IT HAS ALREADY FALLEN 20% or more, the odds that it will fall another 50% are essentially zero. You use margin to buy when the market has fallen 20% or more because it means you are likely to make 20% or more on your investment over the next 12-18 months (if not significantly sooner). This seems like basic arithmetic... I'm not sure why people here are having such a hard time with it.

The S&P 500 was down 59% 10/2007 thru 3/2009. That is pretty much how it played out; an initial break of -20% followed by another -50%. Today the S&P 500 is way overvalued in comparison to 2007, probably by about 30-40%.

By your own words you're saying the market fell 59%, which is not 70%. My scenario requires the market to fall 70% or more. I would also be making money with other income sources during this time, so unless the market fell more than 70% in a very short period of time (60 days or less), I would have made money to add to my account to ward off any margin calls.

Computer Geek wrote:

Ghost of Igloi wrote:

The S&P 500 was down 59% 10/2007 thru 3/2009. That is pretty much how it played out; an initial break of -20% followed by another -50%. Today the S&P 500 is way overvalued in comparison to 2007, probably by about 30-40%.

By your own words you're saying the market fell 59%, which is not 70%. My scenario requires the market to fall 70% or more. I would also be making money with other income sources during this time, so unless the market fell more than 70% in a very short period of time (60 days or less), I would have made money to add to my account to ward off any margin calls.

The market fell from about 29,000 (Dow) down to maybe 18,500 with the Covid scare. Around 40%. It recovered in like 4 months. Those who bought at the nadir made out like bandits. There are trillions sitting around ready to be scoop up those equities that fell so quickly. The market WILL bounce back and will ALWAYS bounce back. After 2009 it took a while to bounce back but bounce back with a vengeance it did. I have no worries that a market dive will only be temporary. If not we have larger things to worry about.

Computer Geek wrote:

Ghost of Igloi wrote:

The S&P 500 was down 59% 10/2007 thru 3/2009. That is pretty much how it played out; an initial break of -20% followed by another -50%. Today the S&P 500 is way overvalued in comparison to 2007, probably by about 30-40%.

By your own words you're saying the market fell 59%, which is not 70%. My scenario requires the market to fall 70% or more. I would also be making money with other income sources during this time, so unless the market fell more than 70% in a very short period of time (60 days or less), I would have made money to add to my account to ward off any margin calls.

1575 x .80 = 1260 x .50 = 630 actual low 3/9/2009 666

Ghost of Igloi wrote:

Computer Geek wrote:

By your own words you're saying the market fell 59%, which is not 70%. My scenario requires the market to fall 70% or more. I would also be making money with other income sources during this time, so unless the market fell more than 70% in a very short period of time (60 days or less), I would have made money to add to my account to ward off any margin calls.

1575 x .80 = 1260 x .50 = 630 actual low 3/9/2009 666

So you confirmed I'm right.

I think the current state shows that we’re not going to go that low. There’s not much fear going around where everyone thinks it’ll bounce back.

In a real crash, there’s a real fear of people losing jobs, losing their livelihood. There’s none of that going on right now.

When it’s a real crash coming, people don’t think it will ever bottom out and have money to buy stocks at the bottom.

So, I think market will start to climb higher sooner than later.

Computer Geek wrote:

Ghost of Igloi wrote:

1575 x .80 = 1260 x .50 = 630 actual low 3/9/2009 666

So you confirmed I'm right.

A likely scenario for today would be starting index value of 4700 that gets halved, followed by another halving where your investment gets bottomed at 1175. Can’t think of a more appropriate ending to “unlikely.”

Anyone like MSFT? I'm sad I missed the dip under 275 a couple days ago. Around 300 still seems like a decent price.

Computer Geek wrote:

You use margin to buy when the market has fallen 20% or more because it means you are likely to make 20% or more on your investment over the next 12-18 months (if not significantly sooner).

lmao OK you're right, and I whole-heatedly apologize. Please actually do this the next time the market tanks by 20%.

Pro-tip: use personal loans to leverage up even harder! Rates these days are around 7-10%, and with the near certainty of 20% returns in just 12-18 months it's literally free money. Need more money? Try cash advance on credit-cards!!!

I mean seriously, why haven't we thought of this before guys?

investing noob wrote:

Anyone like MSFT? I'm sad I missed the dip under 275 a couple days ago. Around 300 still seems like a decent price.

When, in the past 20 years, has anyone not liked MSFT?

Prof. Racket wrote:

Computer Geek wrote:

You use margin to buy when the market has fallen 20% or more because it means you are likely to make 20% or more on your investment over the next 12-18 months (if not significantly sooner).

lmao OK you're right, and I whole-heatedly apologize. Please actually do this the next time the market tanks by 20%.

Pro-tip: use personal loans to leverage up even harder! Rates these days are around 7-10%, and with the near certainty of 20% returns in just 12-18 months it's literally free money. Need more money? Try cash advance on credit-cards!!!

I mean seriously, why haven't we thought of this before guys?

Since you're acting like a real moran, I'm going to give such a response. My whole point was that interest rates on margin on Robinhood are 2.5%, substantially lower than those for personal loans and especially cash advances, and substantially lower than average rates of return on a broad market ETF like VOO. That was the point.

Prof. Racket wrote:

investing noob wrote:

Anyone like MSFT? I'm sad I missed the dip under 275 a couple days ago. Around 300 still seems like a decent price.

When, in the past 20 years, has anyone not liked MSFT?

When i was getting into this in mid-nineties, all the talk was Microsoft. But the stock just didn't go anywhere and I never bit. It got a stodgy reputation as last years tech company, even once they cleared that colossal DOJ anti-trust lawsuit was filed back in 1998 and for years thereafter.

Apple was struggling at the time, and I had techies with me in college who tipped me off about Apple - how it was such an eloquent operating system, and had panache in a way Microsoft and dos did not.

Then, around the turn of the century, they started pushing the accessories - laptops, MP3 players, iTunes, etc. , and I thought they might be worth dabbling in as an investment. Sure enough, MSFT did nothing for years and years, but Apple continued in typical Apple style to not be the first player into a new area, but to wait, and then bust in with killer apps and applications that outclassed everything around it.

I kept adding to the position as it kept delivering.

Microsoft was always good at what they did, they just didn't push into new areas, and if I remember correctly, they bought up some cell phone company and it just died a slow death on the vine.

But what got my attention was when they moved into the cloud sector, about 4 years ago or so, and within a year of that I was on this thread saying MSFT was a buy. It has been ever since, and very good suite of software programs moved to the cloud has been a game-changer.

Buying it now is, imo, a no-brainer. But it wasn't always that way.

Prof. Racket wrote:

investing noob wrote:

Anyone like MSFT? I'm sad I missed the dip under 275 a couple days ago. Around 300 still seems like a decent price.

When, in the past 20 years, has anyone not liked MSFT?

January 2000 to January 2014.

My fault for misunderstanding you early today; re market neutral. Reading over the posts, I was talking past you and agip over market manipulation in after hours trading. The point I was driving at was more about the market open in regards to MSFT referencing DELL and the potential that the opening 1 minute might be the high watermark for some time after. ( Still valid ) The catalyst is the large demand for the stock, buy-sell imbalance and MMs increased market risk.

P.S. A lot of $hit went down in the 90s which is impossible today; regulations, algos, more trading venues. ( Of course these open the doors to new $hit )

For your enjoyment;

Ghost of Igloi wrote:

A likely scenario for today would be starting index value of 4700 that gets halved, followed by another halving where your investment gets bottomed at 1175. Can’t think of a more appropriate ending to “unlikely.”

That scenario is not likely at all.

Computer Geek wrote:

Prof. Racket wrote:

lmao OK you're right, and I whole-heatedly apologize. Please actually do this the next time the market tanks by 20%.

Pro-tip: use personal loans to leverage up even harder! Rates these days are around 7-10%, and with the near certainty of 20% returns in just 12-18 months it's literally free money. Need more money? Try cash advance on credit-cards!!!

I mean seriously, why haven't we thought of this before guys?

Since you're acting like a real moran, I'm going to give such a response. My whole point was that interest rates on margin on Robinhood are 2.5%, substantially lower than those for personal loans and especially cash advances, and substantially lower than average rates of return on a broad market ETF like VOO. That was the point.

I am almost certain it would be cheaper, less risky, and more profitable to just put your money in a 2x SP500 bull ETF. Even an active managed aggressive Vanguard would probably pay off more than this. I mean at least run the wheel if you're gonna bother with margin (

)

But I gotta say, this is probably one of the funnier examples of picking up pennies in front of steamroller I've ever seen, except you're realistically not even picking up pennies, but rather fractions of pennies, and using a margin account with Robinhood of all things to do it.

See also:

la gente esta muy loca wrote:

Prof. Racket wrote:

When, in the past 20 years, has anyone not liked MSFT?

https://i.guim.co.uk/img/static/sys-images/Guardian/About/General/2013/8/23/1377279461336/Steve-Ballmer-010.jpg?width=1200&height=630&quality=85&auto=format&fit=crop&overlay-align=bottom%2Cleft&overlay-width=100p&overlay-base64=L2ltZy9zdGF0aWMvb3ZlcmxheXMvdGctYWdlLTIwMTMucG5n&enable=upscale&s=8e2e03b926fb66a5d84c486275d2a56e

Right when I hit Post Reply I was like "sh!t I hope someone doesn't mention Steve Balmer"

Just checked and SPUU is up 25%, SPXL is up 44% (both YoY).