re: New to Individual Stocks

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go ahead and keep buying individual stocks. I’ll just keep getting richer buying index funds.

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I intend to…

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I’ll just keep getting richer buying index funds.

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You will. And that’s why they exists.
I just don’t have the kind of job where I can sock away 30-40k per year in ETFs.

If I did, I probably wouldn’t be the researcher and individual stock investor that I am.

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You realize even the best financial planners still won’t beat the market right? But yeah go ahead and keep buying individual stocks. I’ll just keep getting richer buying index funds.

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Just one example

Man I’m lagging behind with my 77%. Would be much higher if I would have held all of my AMD and NBIS, instead of trimming on the run ups.

I’m down about 30% on my NOW position, that one is testing my conviction….

Our individual stocks are never more than 10% of overall portfolio.

However, our typical risk diversification and asset group tried & true well diversified approach for the long term has been impacted by this blast off of AI and its adjacencies.

Our equity sleeve is now a bit over exposed even in what used to be a “well diversified” portfolio. Now newly retired, I find myself having to de-risk this concentration, while creating a comfortable, managed AI concentrated exposure.

For the gold rushers:

The excitement is fun! The abundance of energy around the possibilities that underpin this post string is great. All the new tools to learn and participate, by retail investors, is too.

Trust me when I say I’m pulling for all of you. Every one of you!! Your time & effort to beat the market and putting your money into the market is appreciated.

Our index funds and future selves thank you in advance! Most of you will not beat the index approach after tax returns over long term. It not personal. It’s market efficiency and math.

For those laying greater % of your portfolios on the line in individual stocks and plan to do so for long term…especially for those experiencing a boom for the first time (with some quite possibly never having experiencing a bear market or black swan event), there are a couple of points for you:
(Already brought up above but really want to call out):

Be an investor. Have an objective for your investments and time horizon. These set your risk tolerance and importance of protecting against downside to achieve them. Risk mgmt is key point. The gambler and the investor see risk very differently.

Buyers and sellers. NC Tigah already hit this next point. Don’t forget that stock market is made up of buyers and sellers. Two sides. Never forget that. One wins, other loses over ‘long term’ in a given trade.

It’s real money (and people). Sometimes I wonder if retail investing platforms like Robin Hood make is so easy as to forget buyers / sellers, whereby a tokenization feeling results. As if it is just digital lines and charts and not people.

Nothing is guaranteed. In a world that seemingly only grows, invincibility can kill you. If you have never lived through a dot.com bubble burst or a 2008-10 mortgage crisis black swan, just keep this in mind. Those chart lines with steep positive angles FEEL very differently when deep red and declining, lasting multiple years. Losing ain’t fun. Losing money (for years) even less so. Here comes again, risk management is your friend.

Never forget: Human greed works to create the mania and the inevitable flattening/fall. Unlike water that quenches thirst and food that satiates hunger, money is a dissatisfier. People get some and want more! When the growth the lines start to flatten, it works to create the inevitable fall (less > none capitulation).

In summary, Be an investor! Beat the market! Protect yourselves. When ever in doubt, join the boring index investors. Will have coffee ready for you. Enjoy the fun!

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Before you trod too far down that path, simply consider that for every winning transaction, there is a buyer, and there is a seller. Put differently, for every winning transaction, there are two parties, but one winner. To anticipate market success in situations where you "turn your brain off and just buy whatever a highly respected twitter account buys," you'd generally have to hope your counterparty is doing even less research than you are. Given your description, the odds of that are pretty low. Don't you think?

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There’s a much larger portion of the market than retail that exists solely to provide liquidity. They make money on volume and volatility. They aren’t selling for any reason related to the stock, they’re selling bc they make money on it.

Retail exists in such a small space that it might as well be a vacuum. Few are actually moving the needle. All we’re doing is riding the wave. Retail who are consistently successful have just figured out how to read the market for successful trading in one way or another

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There’s a much larger portion of the market than retail that exists solely to provide liquidity. They make money on volume and volatility. They aren’t selling for any reason related to the stock, they’re selling bc they make money on it.

Retail exists in such a small space that it might as well be a vacuum. Few are actually moving the needle. All we’re doing is riding the wave. Retail who are consistently successful have just figured out how to read the market for successful trading in one way or another

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Right, I was responding to Buddy the Tiger, not to Bill Ackman. Hence the simplified zero sum equation.

Maybe I should have told him successful retail traders, like most here, develop a combination of informational, behavioral, statistical, or structural edges rather than merely "turning their brain off and just buying whatever a supposedly respected twitter account buys"? Perhaps I could have explained that survivorship bias obscures how rare sustained success "following a respected twitter account" really is? Sometimes simple is better IMO.

Regarding your response, you seem to conflate transactional impact with market impact, and market impact with market influence. But you're right, market structure matters more than many retail investors realize, certainly more than those relying on opinions in a twitter account might realize, and they are effectively reacting to larger institutional dynamics.

Don’t buy anything unless it’s currently trading under a 10 PE and has pulled back at least 70% from its high.

If you join the dumb money now chasing AI, you’ll end up like all the EV investors in 2021. Or people buying Moderna during Covid. Shortages are a short term phenomenon.

If you have to get in now buy the beaten up Healthcare names. Tech is going to be ugly after July 4

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Don’t buy anything unless it’s currently trading under a 10 PE and has pulled back at least 70% from its high.

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Have fun with GIS, Kraft Heinz, and Cal-Maine eggs

This is just ridiculous.