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#11,977
#11,977
walkenvol said:
TGO is way more astute than me if indeed he averages 25% annually over a long time frame. I’ve been at this for almost 40 years and while I’ve certainly had some years where I’ve made 25% +, I’ve also had years where I’ve lost that much too. There’s been stretches where I thought I’ve never accumulate enough to be able to quit working. There’s a lot of high energy investors with a lot of knowledge who post to this thread, but I still am not sure if all my efforts along the way paid off more than simply investing in ETF’s and committing to add some every paycheck.

Good luck!
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I didn’t say that I average 25% year. I was just giving an example of how a return like that can grow. I also meant 24 - 25 is a typo. 24% would double more than 10x in 30 years. 72 / 24 = 3 x 10 = 30 years. 1, 2, 4, 8, 16, 32, 64, 128, 256, 512, 1,024. Rule of 72s doesn’t apply exactly. A 72% return isn’t a double in 1 year. A 36% return doesn’t quite double in 2 years. But then it gets very accurate over typical lifetimes.

Warren Buffet’s average was about 20% over about 20 years iirc. Peter Lynch had similar results with the Magellan Fund at Fidelity.

It is possible to get a return like that on a single stock. Lockheed Aircraft came out of or just avoided bankruptcy in the 1970s and is in the ball park. Getting into MSFT or AMZN or AAPL at the right time could have created similar results. Bitcoin grew like that.

If you have $100k and put $1,000 in a hundred different stocks, it is possible that one will catch a huge wave. But I’d put $100k in 10 or 20 investments. Once it gets much more than that the portfolio almost mirrors an index fund.
 
#11,978
#11,978
Vol737 said:
J Powell going to swing the sledgehammer again Wednesday (.75) and really crush this market. My gosh, why didn't they start gradually raising rates last year. With our debt and the rapidity of rising prices, what in the world led the Fed to believe inflation was "transitory"? Huge miscalculation.
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75 is expected. The fear is that there might could be 100 at 2pm tomorrow. And I think 50 and then 25 were anticipated to close on 2022. Fears of a total of 100 or more is fueling this market.
 
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#11,979
#11,979
Velo Vol said:
I just pulled up the options chain and the prices seem kind of funky. Is that because there's not enough volume? Is it an issue getting orders filled?

View attachment 491882
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It looks kind of normal for MSTR to me. The 9.20 for the near at the money 197.50 is almost all avolatiity premium. 10% daily swings in MSTR are typical.

With the lower strikes on the calls, you really need to back out the discount to the current market value. With the shares around $196, the 170 strike plus the 31.85 last is 201.85. That is a $5-$6 premium.

“Last” does skew the market value with low or no volume. Somewhere between bid/ask is more accurate. Look at open interest and volume to see how many contracts exist at that strike/expiration.
 
#11,980
#11,980
I’m short the MSTR 22020923 P 180 ($196.60 close). Shares have been getting crushed. The 5-day high is $270. 5-day low is $192. The volatility is off the charts. The 167.5 for 9/23 is still over a dollar with only 3 trading days remaining.

Bitcoin is far less volatile. It might get back to $19k soon. MSTR is so much more volatile because it is heavily leveraged with their BTC speculation. Bankruptcy is very possible and a solid base in BTC would probably push MSTR to a double or better. A $25,000 Bitcoin could mean a $500 share of MSTR. If they are smart and get the opportunity with a $23k-$25k Bitcoin, they should retire some of the billion in leverage. But that MSTR board chair/founder might be a little cray cray.
 
#11,984
#11,984
Velo Vol said:
A 0.75 increase is hypothetically priced in. I'm guessing the market will not sell dramatically on Wednesday unless Powell says something hawkish in the press conference.
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If Powell does what is expected, is still hawkish in the presser (i.e., we have to keep going until the job is done), and the market doesn't react negatively over the next several days, that would be very bullish. It would be indicative that people are starting to/have given up on this "the Fed is almost done" narrative and have priced in that the Fed has more to go.
 
#11,986
#11,986
VolunteerHillbilly said:
Seems like a lot of analysts don't think interest rates can be raised enough to avoid what is coming.
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Avoid what?

Higher interest rates will eventually kill inflation. I think everybody, even the biggest bulls, have given up on the "the Fed can engineer a soft landing" narrative, and it is just a question of how long/deep the recession will be. As others have said in the thread, the market has already priced in a recession of average severity.
 
#11,989
#11,989
05_never_again said:
Avoid what?

Higher interest rates will eventually kill inflation. I think everybody, even the biggest bulls, have given up on the "the Fed can engineer a soft landing" narrative, and it is just a question of how long/deep the recession will be. As others have said in the thread, the market has already priced in a recession of average severity.
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runaway inflation. the spending is not going to stop unless the midterms result in gridlock.
 
#11,990
#11,990
VolunteerHillbilly said:
runaway inflation. the spending is not going to stop unless the midterms result in gridlock.
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The rate hikes will kill inflation. If you keep putting cold water into a pot of boiling hot water, it will eventually cool off. How much cold water do you need, and how long is it going to take? The question is 1) how high will rates have to go to achieve that and 2) how bad is the resulting economic contraction?

3.25, or even 4% (which is where rates will be after another 75 bps) probably ain't enough.
 
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#11,991
#11,991
05_never_again said:
The rate hikes will kill inflation. If you keep putting cold water into a pot of boiling hot water, it will eventually cool off. How much cold water do you need, and how long is it going to take? The question is 1) how high will rates have to go to achieve that and 2) how bad is the resulting economic contraction?

3.25, or even 4% (which is where rates will be after another 75 bps) probably ain't enough.
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my post was definitely slim on context. What I was listening to was not that it's impossible to raise rates enough to reduce demand, but that there is not will within the Fed to make that sort of rate hike.
 
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#11,992
#11,992
VolunteerHillbilly said:
my post was definitely slim on context. What I was listening to was not that it's impossible to raise rates enough to reduce demand, but that there is not will within the Fed to make that sort of rate hike.
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I thought that back when this campaign began, but when inflation is at 8% the Fed doesn't have much choice. The Fed did not have the will to continue with rate hikes and asset purchase reductions in late 2018, but inflation was also 2% then. If inflation was above target but not exorbitantly so (say 4%) then there probably wouldn't be will within the Fed to kill it.

Powell has been pretty hawkish in his rhetoric, and the Fed's actions so far appear to back that up. If anything, the markets have actually underestimated him so far.
 
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#11,993
#11,993
VolunteerHillbilly said:
Seems like a lot of analysts don't think interest rates can be raised enough to avoid what is coming.
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Dumb take by “analysts.” Nobody is trying to avoid anything.

that said, really, all financial “news” is dumb. There is a lot of it, and I admit People post it here. They even post it in bogleheads where nobody believes it. but it’s just not interesting.
couple of strangers on a train can give opinions just as valid, and honestly most any profession has higher intellectual requirements than “money guy”. These are not bright people compared to an average person.
 
#11,995
#11,995
05_never_again said:
I thought that back when this campaign began, but when inflation is at 8% the Fed doesn't have much choice. The Fed did not have the will to continue with rate hikes and asset purchase reductions in late 2018, but inflation was also 2% then. If inflation was above target but not exorbitantly so (say 4%) then there probably wouldn't be will within the Fed to kill it.

Powell has been pretty hawkish in his rhetoric, and the Fed's actions so far appear to back that up. If anything, the markets have actually underestimated him so far.
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probably some wishful thinking on my part as well. as I get close to retirement, I yearn to see the rates we had in the early 80s. dump everything in t-bills and CDs and watch the world go by like my grandparents did.
 
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#11,999
#11,999
05_never_again said:
I thought that back when this campaign began, but when inflation is at 8% the Fed doesn't have much choice. The Fed did not have the will to continue with rate hikes and asset purchase reductions in late 2018, but inflation was also 2% then. If inflation was above target but not exorbitantly so (say 4%) then there probably wouldn't be will within the Fed to kill it.

Powell has been pretty hawkish in his rhetoric, and the Fed's actions so far appear to back that up. If anything, the markets have actually underestimated him so far.
Click to expand...
Back in the Carter / Reagan times we weren’t servicing such a massive national debt so the fed reserve could raise rates to the high teens to slow things down. At some point of raising rates, every tax dollar collected will service debt and all government spending for the entire year will be with borrowed money which doesn’t seem a viable option to me. I wonder if we might have to live with 5%+ inflation for 5+ years until this overheated economy slows?
 
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