Beware the Bet

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These are a few excerpts I read in the weekend WSJ that I thought worth sharing. They totally reiterate some of my thoughts this past year:

  1. On August 30, trader X spotted Zoom Video Communications stock falling sharply in after-hours trading. “I’ll just load up and make a killing tomorrow when it goes back up.” The next day it went down 17% instead. Moral of that story: I invested heavily in Zoom at the height of the pandemic over a year ago and as soon as it appeared America was getting a handle on Covid, I sold and never went back. Timing, folks.
  2. I’ve also been a big investor in Generac that appears to be a growth stock but I don’t fail to remember we are in the middle of hurricane season and by November, all bets may be off.
  3. Best advice in this article: “Finally, ask whether it’s a risk you understand. Who’s on the other side of this trade and why they are they willing to let you make money? In a bear market, you’re often trading with someone who has to get out or go broke so you may have the advantage. In a bull market, it’s often someone who knows more than you do.“

Jason Zweig wrote this article and he brought up points many investors never contemplate:

Timing

Who’s on the other side?

Excellent advice.

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Published by liznaples57

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18 thoughts on “Beware the Bet”

  2. Thank you, Liz 🙂 I would never attempt the stock market, because I don’t understand nearly enough about it, but it is interesting to read a little bit about it 🙂

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  4. Have I told you lately about my 40 acres and a mule in Costa Rica?

    Those 40 acres are virgin rain forest still sitting in a state run preservation program. Which is nice btw.

    There are 10 more acres of 2d growth that I want to log then build an eco-lodge for birders.

    Just sayen’

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  5. Day trading before desktop computers was a huge gamble. I once lost big donuts (h/t Liz) when I tried to call in my sell order but my broker was MIA. I was up at that time as I had anticipated.

    Good times!

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    2. You’re a brave man, Simon. One absurd story that exemplified the author’s point: “Who’s on the other side?”

      I only handle one growth stock at a time (the rest is invested in long term dividends) but this half of the year I liked everything about Generac (so many variables to explain this so I’ll limit it to one). Because I live in a hurricane state, I own the most powerful model.

      So, as the story goes:

      This was a new absurdity to me and to my husband as well, a far more seasoned trader than I. Generac had just come out with its quarterly profits and exceeded its projections by 25%! Day traders dumped the stock thinking it could never exceed such goals again- i.e. “get out while the going’s good.” This is when you realize one can easily be at the mercy of idiots but I held on and because of the unfortunate natural disasters that never cease to exist (fire, flooding, wind, an incompetent Comcast in my county) I was right to hold on to it.

      This is a prime example of what the WSJ was trying to communicate. So now I worry about financials, additional companies bought under the original name, the economy, the necessity of the product being produced and now my fellow investors. I have five different reports on my desk everyday and let me tell you …

      I AM GONNA HAVE A RELAXED LABOR DAY MONDAY!

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      3. Not really but I was hoping to lay down part of the mil-to-mil foundations required to support our national security.

        I made it my life’s work when I discovered just how grossly incompetent is the Deep State.

        Liked by 1 person

      4. Remember that I got out after Persian Gulf I.

        SecDef put the brakes on us when we were just tearing them a new one.

        We are foxtrotted because we always must be seen wearing white cowboy hats.

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      6. I wouldn’t touch that company with a ten ft. pole. And you should have consulted with me. iWe approached me as well and I didn’t even react to that inquiry with a response. I don’t trust him as far as I can throw him.

        Maybe you should get over your ego and consult with people in the know. That is what I do for a living and it has worked.

        Financial numbers with no guarantee, time table? NYET!

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