Investing • Page 65

Caved in and sold a bunch of stuff. Know its probably not the right move -- long term markets will still go up and I can't really know when the bottom is going to be. But for short term mental health... was having too much stress and the psychology of like, when stocks are up you're still making money so the fact that you made less money than you should've if you had been braver with your investments matters less whereas when stocks go down you're just like "fuck should've sold". Now even if things drop another 20% (which seems quite possible, as other big market crashes have shaved 40% off the previous high) I can go "well at least a sold that bit" and hopefully feel less bad (hopefully)

Plus knowing my luck I timed the bottom perfectly

 

The few things I was in the green on I sold last week and just reinvested in VOO. At least I know that'll eventually bring me a profit, I just can't take the volatility of the rest of the market right now.

I'm down a decent amount with Bitcoin, Etherium and Doge (lol) and I know that it'll probably bounce back and you never sell when your down blah blah but I'm starting to think if I sell now at a loss and throw at the S&P that I'll make my money back long before the crypto market has another upswing.

 

Did you ever dump this or did you hold onto it for the MMTLP dividend placeholder? MMTLP is the only thing green in my portfolio right now lol

 

I dumped it.

Green? Don’t know her

 

"never sell while you're down" is a logical fallacy. Sometimes you gotta realize you made a bad bet and cut your losses

When it comes to an index fund... yeah the right long term play is *probably* to buy (though like, I feel like there is a legit chance we drop another 20% and the S&P doesn't hit 3600 again for 4-5 years).

But with crypto or individual stocks? I don't think that has the same proven record as the stock market as a whole, so its certainly less of a sure thing it'll bounce back.

 

Maybe someone here can help me understand something

Looking into just doing some CDs rather than bonds. But the rates on Fidelity seem far higher than just searching the web. Like, if I look at my bank I get something pitiful (<2%). But if I look on Fidelity, they have what as far as I can tell is 4.5-4.6% APY on a 5 year CD. One of them is from capitol one. But then if I look on Capitol One's website they claim their 5 year CD is only 3.5%

Why are the rates on fidelity so much better? Is just cause its closer to the source? Or am I missing something about how fidelity works and their true APY is actually less than what they list?

I guess maybe it has to do with how interest works?

Like my understanding is that with a normal cd, interest compounds. So that 3.5% APY will be an 18.7% increase after 5 years. Whereas I guess with Fidelity, it just goes into your account. (which sure, you can invest again, but the rate might not still be 4.5%?)

 

With the inflation report this morning I fully expected the market to tank. But it looks like everything is shooting up? I dont understand the market at all lol

 

I think there were probably a few things at play:

A lot of people weren't really surprised inflation was higher than expected. Market was already at a low point in anticipation of it. But you still had a lot of people buying puts, which they then used the morning dip to sell, bumping up prices a bit and probably creating a mini squeeze as more people saw this as a good oppertunity to buy in -- if you think upcoming earnings are going to be non-terrible, I think it stands to reason that the market will probably climb for a few weeks before Nov inflation numbers start to make it skitterish again. (Of course, if you think upcoming earning numbers are going to be terrible... easily could tank right away again)

 

So if you have the money and aren't gonna need it for at least a year... getting your 10k in i bonds is pretty much a no brainer at this point, right? Like even if interest drop to 8% next month... you're still getting an 8.81% return in a year. And at that point whatever the new rate is if you really want to you can just wait three months, and still have gotten a 7.04% yearly return from that 15 month period

Not gonna find any bonds that pay you 7% unless they are super junky. And while sure, there is certainly a chance the market recovers and stocks will be a better return... there is also a chance the market is only just hitting the bottom at the start of 2024 so...

 

Yeah I threw 10k into I Bonds a few months ago at the 9.62% rate. If the rate change next month is still above 8% I'm gonna probably buy another one in January.
Treasury Direct is a pain in the ass but it seems worth it.

 

So I've been reading up on SCHD... and mostly thinking "wow why didn't I think about getting into something like this sooner it feels like a bit safer S&P", as evidence by its far superior performance

The risks I see are

1: Recession is likely going to hurt profits and thus probably hurt dividends, right? (but on the counter here, it seems like they pick safe companies that will probably hold up better than average)

2: If stock market starts going brrr again people might flock back away from safer investments, driving the cost of them down. (and meanwhile the cost is up currently as other people get the same idea I did). So like, its down 15% now compared to S&P's 25% but I could see that averaged out the other way around.

3: It might just be lucky, and is due for a correction to the mean. This is definitely my biggest concern. Fund doesn't go back far enough to see how it would've performed in other significant downturns. Best comparison is VYM but SCHD seems to be doing a lot better than that and its hard to say how much of that is luck vs one strategy being better than the other.

4: Dividend returns get wrecked a bit by taxes cause they all count as income even if you auto-reinvest it, right? So if one stock grows by 1% each year and offers 3% dividends, and another just grows by 4%... the later one is going to net you a lot more in the long term, right?

All those things considered... feels like a good reason why not to just use SCHD instead of an S&P index fund as the core of your portfolio but thinking I should at least swap for some of it.

 

I basically invest in the vanguard equivalent of schd it's safe maybe slightly riskier than spy but I'm ok with it.

 

Shouldn't it be safer than SPY/VOO? Your potential gains are gonna be lower, but more value stocks and higher dividends means less risk.

 

I knew I was doing the second one wrong

 

So uh… tech stonks not having a great week

 

Are we expecting another rate hike? 1 year CD rates are at 4% now, I'm wondering if I should strike on that or if it's just gonna go up again next month.

 

My understanding is that most people expect another .5 point bump in December. But that might already be priced in to current cd/bond rates I don’t know there

 

Binance Says It Will Walk Away From Deal to Buy FTX

Bitcoin down over 10% on the news and likely headed much lower.

 

So this has taken a lot of insane turns and is a total clusterfuck

 

Do tell

 

This will be a long post since it would be incredibly confusing otherwise. Still might be, lol. Also would like to clarify I am not squeeze-pilled. I just kind of happened into this one early 2021 after a coworker told me about it and I had profits to play with. Not bagholding, thankfully.

So, in 2021 there was a company called Torchlight ($TRCH), which had been heavily shorted and manipulated for years. In June 2021 they’d agreed to a merger with a small tech company called Metamaterials ($MMAT). Once the merger took place, $TRCH shareholders were given equal shares in $MMAT, in addition to shares for a ticker called $MMTLP, which had a value of $0.0001.

There were only meant to be ~165-million of these shares available, same amount as there were original $TRCH shares. Torchlight would then sell all of their oil land as part of the merger agreement, revenue that would be divided among all $MMTLP holders. So that ticker was meant to serve as a placeholder to indicate part ownership of the oil assets. Great. Those would be worth anywhere from $2-20, so it became a waiting game for the land to sell.

$MMTLP was not meant to be tradable. However, after the merger, there were a ton of FTDs on $TRCH shares, believed to be synthetic shorts. Instead of creating any kind of squeeze, $MMTLP was then listed on the OTC market as tradable against the wishes of the actual companies. Although if you were retail it was difficult to find a broker who would sell it to you, but some would.

All of them would, however, let you sell it. Theoretically this was meant to help the $TRCH synthetic shorts close. But they never did. Eventually Metamaterials decides to spin-off the $TRCH assets into a private company called NextBridge Hydrocarbons. Being a private company, the $MMTLP ticker would be closed out and delisted from public trading. Theoretically, shorts would HAVE to close, as synthetic shares and legitimate shorts cannot be taken private. This made it different than any other “squeeze” play, since the shares would cease to exist and be replaced with a finite amount of private shares.

So $MMAT files multiple forms with the SEC to get approval for this spinoff. It gets approved November 2022. FINRA confirms. $MMAT sets the spin-off date for Tuesday, 12/14 with the last day of trading being Monday, 12/12.

Due to the ~6m reported short volume, as well as the estimated ~150m of FTDs from the $TRCH carryover, $MMTLP gains retail interest and there’s a climb up to $12, with everyone under the assumption that demand was going to heavily outweigh supply. It eventually floats around the $5-$8 range for a couple more weeks until yesterday, three trading days before $MMTLP is deleted.

Yesterday it takes a 50% loss. Level 2 data indicates most of this was manipulation, especially since most retailers were only in it for the squeeze at the very end. Does very low volume, mostly on the bid side, yet closes at $2.90. FINRA has to change one word of language on their approval toward the end of the day that then makes it, I guess, more clear than it was to funds and market makers that all shares needed to balance.

Soooooo then this morning FINRA announces they’re halting all trades of $MMTLP due to “extraordinary events”, and the halt will end in conjunction with the conversion to NextBridge, even though there were two days left of trading for a stock that was anywhere from 6-200m shares short, not including the additional shorts from yesterday, on a ticker with 165m shares total in the float.

So, it’s back to being a placeholder worth $0.0001, no matter if/what you paid for it, and you can’t sell or buy the thing they made tradable on purpose. Can’t do anything. Everyone just locked into whatever comes of the private company sale.

 

Holy shit that’s long I’m so sorry. I left out the part where one of the biggest sources of DD behind it was a lady in a bird costume, and the Torchlight CEO spends half his time tweeting Covid conspiracies that you’d have to sift through for relevant information. It’s been a wild ride. Hopefully this kills the Reddit-brain short plays. Never gonna work out like that

 

just opened a brokerage account with fidelity to start buying stocks. any ones you guys would recommend for a first timer?