Read? Where does the money come from??? (3)
Read? Investing Made Simple by Uncle8888 (6) - About time to refresh it!
Read? More on Retained Earnings
Read? What Wrong With Yield Pig???
Luna 20% Yield? Shiok!
Seriously, we have to ask and think deeper where does the money come from?
1. At mahjong table
2. At casino
3. At ToTo
4. At stock market
Answer for 1 to 3 is pretty obvious; but 4 may be tricky for confused retail traders or investors.
Seriously, we must know where does the money come from before putting our hard earned savings in the market.
"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder
Posts
CW,
ReplyDeleteEvery generation of yield hogs will have their "crash got sound" moments....
Be it high yielding corporate junk bonds, gold trading scams that offered high yields, peer-to-peer lending at 18%... Now we'll just add DEFI to the list.
Victims that survive will come out stronger. Then there are those smarter ones who can learn from other people's mistakes (I'm not one of them as I learn better from doing).
Having said that, I'm still a cheerleader for a bit of risk taking when we are younger in our 20s to 30s.
Even never made a single cent and covered with bruises, we'll at least gain some wisdom (hopefully); knowledge about ourselves - what we good at, what we suck; and most importantly, what edge we have over others.
Better this than to SAVE MORE all our lives, and at age 65, flushed with retirement funds, become a virgin bei kambing by jumping onto the Earn More path - trying to catch up with peers who have done much better financially through Earn More...
When we strolling down the mountain, we should have the answers to the 4 questions you've asked.
Donkey years ago in Singapore, there were a number of schools teaching option trading for passive income; and few investment bloggers also seized the opportunity to become trainers. History of Easy ways to make money will repeat like market cycles.
DeleteCW,
DeleteSome of these snake oils are still peddling FIRE dreams to new batches of bei kambings every year for the past 10 to 20 years!?
New bei kambings never stopped to wonder since we have been in a bull market for the past 10 over years, why haven't these "gurus" earned enough to achieve "Financial Freedom" for themselves???
Would you burn your evenings and weekends for "work" when you have achieved FIRE?
Uncle8888,
ReplyDeleteFor the first 3 questions, it's basically zero-sum game. Ok for first 2 may involve skill, depending on the type of game.
The 4th question? It depends.
In the short term, mostly zero-sum game. Also when dealing with derivatives & short selling. And in situations where people are buying & selling at PE of 30+ or price-to-sales of 10+ LOL.
But in the long term, I would hope that the money comes from the growing cash profits of the underlying businesses.
We're likely in a bear market now. My gut feel is that we're about halfway to the bottom. We may be starting a counter trend bounce. ¯\_(ツ)_/¯
David Rosenberg thinks we're only in the 3rd inning of the bear i.e. 1/3 of the way.
While Bob Farrell thinks it will only end when S&P500 goes below 3500.
I like to see more sustained pessimism & capitulation; bloodbath waterfall phase. Hoho!
I hope I didnt jinx it. Just a day or two before the Terra & Luna crash, I commented in a forum that while inflation erodes our savings (albeit slowly), Mr Market on the other hand, is brutal and can wipe out a person's savings / investment in an instant. Those who saw their investment in Terra and Luna went almost to zero can fully appreciate the comment.
ReplyDeleteIn that same forum I also commented that one should not trivialise the fear in people when the market crashes. This is because for some people, they may not be able to recover their losses, especially if they are near to retirement or are retirees. These fears are real and are good reasons why people near to retirement or already retired reduced their exposure to equities and park their life savings in something safer such as the CPF.
And then on the flip side, they are those with huge warchest looking for a crash! We always want to be in a position of a buyer. Personally I dont think the market is in a crisis yet. There is no :
1. Large scale retrenchment
2. No large number of loan default by businesses and individuals
3. No government announcing rescue packages except maybe Sri Lanka
So for me, no deployment of warchest yet, but just my regular monthly buys.