Comments by "Magic Beans" (@Magic_beans_) on "The Plain Bagel" channel.

  1. 8:00 This is good to remember for investments in general: expectations are already priced in. Maybe the markets are inefficient in the probabilities they’re pricing in, but it’s not as if hodlers don’t already know about the ETFs or the halving.
    122
  2. He was kind of a shady character from the start. Rich Dad himself appears to be fiction, and there’s a bit where Kiyosaki straight-up says to make friends with high-ranking businesspeople and see if they can throw you some insider information. Kiyosaki claims it’s not insider trading because you’re not the insider, but Martha Stewart’s conviction says otherwise. She benefitted third-hand — an insider (who, granted, was also a friend of Stewart) told his broker to sell a bunch of shares. The broker called Stewart and suggested she sell. If that’s close enough to count as a felony, outright asking your golf buddy for insider tips definitely does.
    65
  3. I prefer broader funds like ITOT or VT for the diversification. The S&P had a “lost decade” from 2000-2009, but smaller and foreign companies kept chugging along. Then Europe had a lost decade roughly 2008-2018 and the US was doing well. I couldn’t say what’ll outperform, but the imperfect correlation between market segments can reduce the swings somewhat.
    48
  4. The world’s most humble thousandaire.
    46
  5. Or they’ll rent the goose out, so to speak: start an investment fund and charge clients a percentage. Hedge funds often have a provision where they get a share of any excess returns. Of course the gurus always have a reason why they don’t do this, some vague appeal to democracy and helping the working folks, or conversely an attack on the ruling caste: “Wall Street’s trying to suppress this information, so be a brave rebel and give me $500.”
    16
  6. Can’t wait to see how many new bagholders we get from this.
    16
  7. Yes, but also to explain that investigations are more complex than “it’s kinda sus and I don’t like him, therefore guilty.”
    11
  8. Zero-commission brokerage has made that much more feasible. I now have my regular biweekly investment automated & spread across 20+ stocks,, so I’m basically my own ETF.
    9
  9. That relates to something that I don’t think we talk about enough. We think of retirement as not working at all, but there’s also a lot of value in being not-poor enough to work on your own terms. If you have a few months’ expenses saved up you’re no longer stuck at your job. If conditions get bad or they ask you to do unethical things, you can bail. That’s quite a liberating feeling. With a couple hundred K you can have a fallback income that allows you to downshift to part-time or seasonal work. I know a couple of Silicon Valley guys who did the latter: grind like hell for ten years while living as cheaply as possible, then “retire” to Oregon, work at a coffee shop two days a week, and otherwise focus on parenting or running a small consulting business.
    7
  10. That’s the point, good investing isn’t exciting. The average retail investor does far worse than they would by just buying and holding an index fund and accepting market-average performance. A couple of the big reasons they do worse is trading too much and chasing performance. In this case it could mean jumping into BTC expecting quick gains, then bailing when the correction comes. (That’s one thing the hodlers get right, they don’t buy at a peak and sell during a crash. Can’t say that for a lot of ARKK investors.)
    7
  11. Meanwhile Will acts like he doesn’t give a damn about anything but he says last year he put $400,000 into savings and sent $150,000 to his parents.
    6
  12. That’s exactly what he says at 7:29. It’s a marginal correction, something that happens every few years in the stock market. It’s just that some people expected an immediate surge.
    5
  13. Re: “If you’d invested back then you’d have this much now” - there’s also this thing called reversion to the mean, also illustrated by phenomena like ARKK Innovation or the Madden Curse. Someone has a great year, better than anybody would have expected, so they suddenly get loads of press coverage, endorsement deals, new investors, or whatever. Before jumping on the bandwagon, remember that their great performance was noteworthy because it was unusual. True, it may represent a turning point in the player’s career or the emergence of a brilliant fund manager, but often they just had one good year. After that they go right back to being average, sometimes worse.
    4
  14.  @Dr-dikhead Agreed, and our host says himself at 1:50 that this is a real issue that warrants scrutiny, criticism, and perhaps legislation. But it’s still important to get the facts straight.
    4
  15. True, but how much it matters depends on the broker’s policies, namely where they do that rounding. I use Fidelity, and they round to either 0.001 share or the $0.01. So the effect of rounding on, say, 0.001 share of Chipotle (priced at $2,903.44 as of this writing) is pretty small.
    4
  16. Yes, but it doesn’t count as working because you’re living the dream. (Only a slight paraphrase of Tim Ferriss when people point out he works way more than 4 hours a week.)
    4
  17. These are salespeople, they have a line for that. Why are they sharing their secret? Because they care about helping everyday people achieve their financial goals. Why does it cost hundreds of dollars? Because if it didn’t, you wouldn’t value the information as much.
    3
  18. Tell me you didn’t watch the video…
    3
  19. I’d seen another video about this film, and that commentator touched on another rule of suspense: “don’t show the monster too early”. The audience don’t really need to know what this is, just that it could vaporize the company.
    3
  20. For sure, it’s an old concept. “Lipstick on a pig” and whatnot.
    3
  21. Richard kind of misspoke there. When he said “positive return” I’m pretty sure he meant “excess return.” Earning average returns is easy, you just spread your bets around.
    3
  22. Depends on what you mean. A main criterion of inclusion in the S&P is that the company has to be headquartered in the US. Many companies do get their revenue from other countries, mostly the Tech and Communications companies. Other sectors like Financials and Utilities are harder to extend across borders so they depend more on the local economy. And of course it works the other way around. Samsung, Spotify, and Nestle sell their wares here. MercadoLibre is more specific to its region.
    2
  23. It should, yes. Imagine you buy Microsoft (share price around $400) at $50 a paycheck. After your eighth or ninth purchase those fractions will add up and pass the full-share mark. At least at my brokerage, from that point on the cobbled-together share is treated like any other full share. It gains voting rights and can be transferred.
    2
  24. If you’re that worried about a correction or a bear market, that’s probably a sign your overall allocation is too aggressive. Build up more of an emergency fund or move some of your investments to bonds or commodities full-time. Sure your upswings won’t be as big, but you’ll have the resources to ride out a downturn. Waiting comes at a cost too. According to research by Elm Partners, even when starting from an expensive market, the odds of correctly predicting a correction within the next 3 years are a little better than a coin flip (56%). When the predictor is correct they save themselves about 10% of losses, but when they’re wrong they miss out on the gains the market made during that time, an average of 30%. That means on average waiting for the dip means 8% missed gains.
    2
  25.  @masi9044 ​​⁠ Right, because these funds are supersets of an S&P 500 fund. The S&P 500 make up about 80% of a total US market fund (like ITOT) and just under 50% of a total global market fund (like VT). That other 20-50% is important though, as it provides further diversification.
    2
  26. They always have an answer for that: it’s not about the money, their passion is helping ordinary people. They only charge $497 for their course because if they gave it away you wouldn’t appreciate it as much.
    2
  27.  @lucagerio Nice catch. So yeah, we have no reason to believe she’s doing better than random chance. She could even be losing money, we don’t know.
    2
  28. Yeah, it just means that when those factors change, they move in opposite directions.
    2
  29. Yep, exactly why it’s not suitable for ordinary folks. You have to (1) have an educated guess about where the market’s headed, something strong enough to justify losing money the whole time you hold this position, and (2) be actively engaged enough to move quickly when conditions move in your favor.
    2
  30. The 25% guy (4:45) was a real mixed bag too. Three of his four electric car picks are down 80% or more. (Nothing wrong with a few speculative holdings; I have shares in alternative energy and air taxi companies. But they’re like 2% each of my overall holdings. Most of my money’s in boring stuff like insurance companies and grocery stores.)
    2
  31. Short answer, yes, the company will pay back the par value (in your example $1,000) at the end of the term, regardless of what you personally paid for it. That 25% return isn't likely though because of competition. If you're offering to buy that bond for $800 so you can get a 25% return, why wouldn't someone else offer $850 and get a 17% return, or $900 and get an 11% return? And it would keep going like that until this bond pays about the same rate as similar bonds.
    2
  32. One note to this is that when your portfolio is new and small, new deposits can quickly dwarf these differences, so you don't have to put too much thought into it. Let's take this example of a $300 monthly deposit. That's $1,800 in the first six months. Unless Stock A continues its runaway performance, contributing equally to each investment will push it back toward balance anyway. Not perfectly of course, but enough that it won't terribly matter.
    2
  33. They’re basically all the same, they hold a basket of assets and each of these funds’ baskets hold just one thing: Bitcoin. Unless you have a reason to seek out or avoid a certain provider, you may as well go with the cheapest. ARKB, BITB, IBIT, and FBTC are all in the 0.20-0.25% range. As our host mentioned, some funds are temporarily waiving part or all of their management fee. Just my conjecture, but I suspect that they’re doing this is because within a couple years they expect the market to have consolidated into maybe three dominant funds, and everyone will flock to those going forward. We already have that with S&P 500 index funds: there are dozens of such funds but SPY, VOO, and IVV dominate. Even within a company, SPLG is 1/20 of the size of SPY and sees 1/10 the trading volume despite being the same holdings with a lower expense ratio. Since asset managers make their money as a percentage of assets under management, becoming one of those really big funds would be great for the bottom line.
    2
  34. And for a couple of them he bought right at the peak. Good news is if he holds onto these companies and they do well, that won’t really matter. Imagine you’d bought into Microsoft at the worst possible price of 2015 but held on. Yes you could have done better, but you’d still be up more than 500% because you were there for all of 2016, 2017, 2018…
    2
  35. I think this also speaks to a sentiment common in amateur-investing circles lately: risk is judged retroactively. The line for [stock or coin] keeps going up, therefore it’s not risky.
    2
  36. 2023 example of a “dividend trap”: Hawaiian Electric. As of this writing (30 Nov 2023) their profile on various investment sites shows a dividend yield of 12-14%. However , they’re partly responsible for the Maui fires earlier this year, so they face an unknown but probably large liability for damages. This means (1) their share price got smacked down, and (2) they suspended their dividend to free up cash for when that liability comes due. Someone who doesn’t know the context could buy in thinking they’ve found a great income stream, only to learn it’s not coming anytime soon.
    2
  37. Ice bath, journaling, meditation, edging, everything you’d expect for someone with the sigma grindset.
    2
  38. As our host mentions at 4:40, I also like the variety in the type of property I can own. I’m not interested in being a residential landlord, but through REITs I can own medical offices or bowling alleys.
    2
  39. But number went up!
    2
  40. US Treasury bonds can be bought directly from the Treasury. Otherwise you'll probably need to go through a brokerage. There's usually an area titled "Fixed Income" or something like that where you can buy or sell government bonds, corporate bonds, bank certificates, annuities, or mutual funds that hold any of these things.
    2
  41.  @Illusion666  It was back in the 1980s, it’s basically Ramsey’s origin story. He’d accumulated some $4M worth of real estate but it was one debt propping up another. Then one of the banks he worked with got sold, and the new owners called $1.2M of his debts. He filed for bankruptcy two years later. I wouldn’t exactly call him a fake guru in the Coffeezilla sense. His teachings are roughly in line with those of Jack Bogle and he doesn’t claim to know any secret techniques or systems. Then again he makes money off books and seminars, then uses that wealth to convince listeners he knows what he’s talking about.
    1
  42. He’s not. Bagel’s pretty clear that this is all really shady and Left lies all the time. A criminal conviction however requires way more than that. How do you prove beyond a reasonable doubt what Left believed about the company when he published his report? Investors could pursue civil remedies which have a lower standard (basically 50.1%) but the plaintiffs would have to show they were harmed by Left’s statements. How likely is that when most of the time he’s been correct about the company being over- or undervalued? You can’t just lock people up because what they did feels wrong.
    1
  43. 3:43 This seems to be a really common assumption, that technology or growth companies are inherently better long term investments, but that’s not necessarily the case. Stock movement is largely expectation vs. reality. The company you hold could increase profits 25% year over year, but if the market was expecting 30% the company’s stock would lose value.
    1
  44. Even if that cashier with $10,000 actually did somehow 100x it overnight, that’s not “retire at 25” money, and certainly not “casually shopping for another Bulgari” money like you see in the sales pitch videos. It’s more like “supplemental income so I can stop doing gig work after my regular job” money.
    1
  45. They can now, that wasn't as widely available when this video was made. My brokerage will sell as little as 0.001 of a share or $0.01, whichever is more (For example as of late 2023, Chipotle sells for about $2,300 per share, meaning 0.001 shares would be $2.30. They wouldn't let me buy $1 of Chipotle because that would round down to zero.)
    1
  46. Also, if the softwares work as well as she says, why would people bail before the two years? By the end of a month they’ll have almost doubled their money and be super excited to keep going.
    1
  47. I suspect some of it is also our perception of investment and wealth building. We think of it as picking that one elusive company that goes 🚀 and makes us instantly wealthy, as opposed to the more reliable but less exciting approach of getting decent returns over a long timeline.
    1
  48.  @masi9044 Sure, large caps are part of the total market, in fact they’re the largest part. But ITOT, VTI, or IWV also put about 20% toward small- and mid-caps. That provides a bjt of diversification, and if that small-cap premium comes back investors will benefit. VT takes this a step further and expands globally with a floating market cap. The US is currently about 60% of global equity, so it’s 60% of the fund. The other 40% is spread across lots of other countries. Market cap weighting means the fund adjusts as the markets do, so if Brazil’s economy takes off it’ll automatically become a bigger part of the index.
    1
  49.  @briangasser973 That’s the general rule for covered call strategies, lower but steadier returns than the underlying. You can see this in basically all the “option strategy” ETFs like TSLY, NVDY, DISO, and JEPQ.
    1
  50. > keep doing whatever the hell it was I did to earn $100,000 But that involved working and earning a paycheck. If there’s one thing passive-income folks stand for, it’s to exit the workforce as soon as possible.
    1
  51. Agreed, the spread thing really depends on the company (and it happens anywhere, not just zero-commission brokers). As our host said, the more heavily traded a given security is, the smaller that spread will be. At the end of business Dec. 22, 2023 I’m seeing a bid-ask spread of 0.06% on Microsoft but 2.5% for Synchrony Financial (a mid-cap bank best known for doing the behind-the-scenes work for retail financing, those “no interest for 12 months” promos.) Overall the spreads aren’t too bad. I’ve automated my stock purchases so they happen every two weeks, and on that day I can expect to lag the market by a quarter percent. So for each $400 I invest I’d pay $1 in spreads. I’ll take that any day over $7 per trade like in the dot-com days or 2% minimum like in Wolf of Wall Street .
    1
  52. I find the Lamborghini stuff off-putting. It screams “salesman.” I’d be content, and I think a lot of others would be too, just being able to work on their own terms: part-time, self-employed, or just having enough of a cushion to take some time off between jobs. I’ve read about executives taking a “sabbatical” to travel or study and how that reenergized them for the rest of their careers. I think that would be amazing.
    1
  53.  @Wistbacka  She’s also conflating deposits with investment returns. Tesla’s best-ever year was about a 750% gain, which is fantastic but wouldn’t turn $200 into $29,000.
    1
  54.  @JRRob3wn In Rich Dad he straight-up advises making successful friends and asking them for insider information. For reference, Martha Stewart went to prison for using third-hand insider information. The ImClone insider and her used the same broker, and the broker said “Hey this guy’s selling, maybe you should too.”
    1
  55. 5:00 (Technical analysis of a fake stock chart) - If the reviews were consistent it at least suggests there’s a method to TA, and it could just be that the coin flips happened to randomly create a pattern they’d see as bullish. I think the real gotcha would be if different analysts all gave different reviews, indicating they’re just seeing what they want to see. An example would be the NOVA system that’s supposed to help classify foods as more or less heavily processed. There have been studies where researchers asked trained professionals to rate various foods and there was very little consistency to their responses. That’s the kind of result that tells you a metric is arbitrary or so vague as to be unhelpful.
    1
  56. 1:30 There’s been some research on stock splits and how it affects the company’s value, and the average rally is like 5%. Of course the folks on Wall Street know this already, so the second the split gets announced they buy in, so…
    1
  57. 6:29 She’s kind of telling on herself here because her number one pick is up 245%. Nice, but not nearly enough to go from a few hundred dollars to millions. So either she’s been doing rapid-fire trading with her one hour a week and gotten extremely lucky, or she’s conflating deposits with gains.
    1
  58. To some extent yes, and originally it was. You had bits of thousands of mortgages from people all over the country. A downturn in certain cities or industries might spark some defaults, but it would take something big to cause people everywhere to default all at once. The diversification decayed ovee time because risk-averse investors stuck to the higher-rated tiers and the banks made “seafood stew” with the rest. Also of course the quality of the incoming mortgages was getting worse once the easy loans had already been made. That’s where the rating agencies failed to do their jobs.
    1
  59. Personally I like a lighter hand with legislation and penalties because that runs the risk of arbitrary enforcement. That said, I’d make a terrible social media guru because I’d want to give more nuanced opinions and clarify that they’re just my opinions. I couldn’t just shout “if you want to get rich in 2024, buy these five stonks now.”
    1
  60. Congrats, but six months isn’t a very long track record. Maybe you do have a winning strategy, maybe you were just in the right place at the right time.
    1
  61. Maybe it’s just because I’m old, but direct-to-consumer advertising for a stock strikes me as suspicious to begin with. In my day they’d at least hide it a little bit by framing it as a softball cable-TV interview with the CEO.
    1
  62. They usually have an excuse for that. They don’t need the money, they just “want to empower everyday investors to achieve their dreams.”
    1
  63. 3:15 Did dude just livestream a pump & dump?
    1
  64. 10:40 At least in my school district, personal finance was a required topic. That was mostly about setting expectations, what banking products are and do, and how to make a household budget. Trouble is, what can you really teach high schoolers about the stock market? In our case it was what a stock is (partial ownership in a company) why we care (high returns but with higher risk and volatility) and how to read stock quotes (what Volume and Market Cap mean). Trouble is, what more can you teach teenagers? It’s probably not that relevant to most of them and won’t be for several years, especially once you dash their hopes of getting rich quick. Likewise, if they’re expecting advice for how to pick winning stocks… there’s an entire industry of people trying to do that and even with their resources they’re only doing an okay job of that.
    1
  65. The point isn’t just to avoid getting acquired, but to avoid getting acquired by someone who’s going to turn everything upside-down. The “corporate raiders” of the 1980s were famous for this: they’d buy a company, break it up, and sell the parts for a profit. If a sale is inevitable, hopefully you can sell to someone who’ll at least let the company live.
    1
  66. Paper trading is a good start, but it still can’t capture the emotional angle when one of your picks gets hammered. I’m writing this in late 2023 which has been a very positive year overall, and I’ve still had several 5-10% drops in a day. - Solar companies that can’t add capacity as quickly because of higher interest rates. - A tech company that reported they “only” expected 18% growth next year instead of the 24% people were expecting. - A retailer whose stock fell because a competitor’s press release got investors spooked about the industry. And then there are industries like biotech where companies could live or die based on a single regulatory hearing.
    1
  67. Yeah, and if you go back further even retail traders were expected to trade in lots of 100 shares. A starter position in IBM forty years ago would have required something like $12,000.
    1
  68. I was wondering about that. If it's a 5% confidence interval and there are 252 trading days in a year, the consequences for occasionally going outside the lines must not be that severe.
    1
  69. I suspect one of the roots of this hype is the assumption that wealthy people have access to secret or gatekept asset classes that produce enormous returns. Aside from being an early investor in a company that happened to wildly succeed, that’s not the case. Their rate of return is probably lower than you’re getting from the S&P, it’s more about their ability to invest a huge share of their huge income.
    1
  70. 1:16 I suspect this is part of why dark pools are regarded so skeptically. The big boys have access and we don’t, therefore it must be something that benefits them and hurts us. It can’t just be a convenience or cost savings, it has to be some shady back room where the collusion happens.
    1
  71. Both are good. The key traits your emergency fund should have are liquidity and stability. Could you access that money quickly if you needed to, and is there a chance it'll drop in value right when you need it most? The tradeoff is that money market funds tend to pay a slightly higher rate than high-yield savings accounts, but they're not insured by the FDIC, CDIC, NCUA, or anybody like that. That means there's the possibility of your investment losing money, though that's very low if you're working with established companies and they're buying safe investments like US treasuries. (There is SIPC insurance, but that only covers things like the brokerage itself becoming insolvent. If your fund manager decides treasuries are boring and YOLOs your money into Gamestop options, that'll probably have to go through the courts.)
    1
  72. 9:27 What dude fails to mention is that on that day (Nov 4 2022) DBGI stock underwent a 1:100 split. That means that if on November 3 you had 100 shares worth $0.07 each ($7.00 total), on November 4 that would change to 1 share worth $7.00. The total value of your ownership stake didn’t change. He’s taking advantage of the fact that Google’s stock market display doesn’t immediately catch on to this stuff, at least not for penny stocks. Eventually it’ll retroactively adjust prices to reflect the split, but at the moment it just knows yesterday closed at $0.07 and today closed at $7.00.
    1
  73. Not that I expect Grant Cardone to be consistent, but commercial leases are often structured for quarterly payments. The reason apartment rent is almost always monthly is because your landlord doesn’t trust you. (And in many cases because they’re leveraged up to their necks and relying on you to pay their bills.)
    1
  74. One thing I’d add here is that while index funds provide market-average returns, that’s way better than most individual investors get following a do-it-themselves approach. If someone doesn’t take the time to learn about the market and develop a solid plan, they’re very likely to buy on hype and sell due to fear. Why is this important? In 2022 Amazon saw a 50% drop in their stock price, but by the end of 2023 when I’m writing this they’ve pretty much recovered. If someone saw the drop and sold their shares, they’d wind up taking a loss. Suppose instead they’d kept their head, reassessed whether they still believed in the company long-term. If they did, they could hold on and recover their money, or even buy more shares at the cheaper price and make some money as the stock recovered. Anyway, index investing. If that appeals to you, a next step might be to look up the “three-fund portfolio” or the broader idea of the “lazy portfolio.” It’s not specific funds so much as a concept: pick a handful of funds representing different asset classes — just an example, but let’s say one for US stocks, one for foreign stocks, one for bonds, and one for real estate — and allocate your money across those according to your risk tolerance. From there you can just keep depositing and maybe check in every few months or even years to see if it needs rebalancing.
    1
  75. 6:20 Rewatching this I’m realizing the “buy a mansion with crypto” kid was expecting the Anchor Protocol’s rate to last for the entirety of his 30 year mortgage. That was always intended to be a promotional rate to encourage UST adoption. That should be fairly obvious when the rate earned on more established currencies is about on par with a savings account (as of early 2024 staking ETH pays about 3% per year).
    1
  76. It can vary by employer. Typically your agreement with them (your contract or incentive program documents) will specify how you earn the options (the “vesting” period or requirements), what the strike price and expiration date are, and how to execute the options (for example: Do you buy the shares directly from the company or on the open market? Do you have to come up with enough cash to cover the strike price, or do you just give the order and they’ll exercise the options for you?) And of course they’ll always be call options because the point is to align incentives. If you help them be profitable and increase their share price, you get paid more.
    1
  77. Better days are just around the corner. 🙏
    1
  78.  @adj789 Also they wouldn’t have all bought on day 1. A new fund offering is similar to an IPO, they build up an initial supply of shares, contracts, or in this case beforehand. They have to, so they have something to sell to retail investors.
    1
  79. True, but does the split cause or predict outperformance? Those shares got to be $2,000+ because Google’s been so successful, maybe Google just continued to be successful.
    1
  80. This doesn’t affect me, I have no expertise on the topic, and everything I know about Canada’s macro environment comes from a few minutes of reading headlines. Now here’s a 35-minute video where I express my opinions as facts.
    1
  81. Shame too, I really like the idea of a co-op that invests in collectibles. I don’t know enough about, say, sneakers to think I could flip them.
    1
  82. ⁠ @nateosman5915 That’s a big one. Folks like you and I look at absolute returns, but someone with millions-plural of dollars doesn’t need to grow it aggressively. Some do of course because of greed or ego, but the number one thing is just to not lose money. They care about risk-adjusted returns. That’s what hedge funds have historically done well. They’re less volatile than stock-based mutual funds and they’ve outperformed during bear markets. It’s also worth noting that most investors also don’t put all their money in hedge funds, just some so their wealth isn’t entirely tied to the stock market. The normal-folks equivalent would be keeping a chunk of money in bonds or cash equivalents.
    1
  83.  @thingshappen9199  Ideally you'd continue adding to it, but yes. If you want to get into the details of why, look up Bob, the world's worst market timer. Bob is a hypothetical guy who was good about saving money but he only ever puts it into the stock market right before each crash, consistently for the last 30-50 years. His saving grace is that he never sells his investments, so he gets to ride the wave back up after each crash, and in the end he actually did pretty well.
    1
  84.  @Mishkola If you’re enjoying it and making money, awesome. Many people wouldn’t though, they just want something simple, something that provides pretty good results without much knowledge or maintenance. (Personally I’d diversify OP’s suggestion a bit further into a “lazy portfolio”, a handful of funds covering different asset classes. Maybe they’d have one covering the total US stock market, one for foreign stocks, one for bonds, and one for REITs. That way it’s not all US large cap companies.)
    1
  85. Likewise, some places do gradual vesting. For example you keep 20% more of the match for each year you stay, until after 5 years it’s all yours. Even if you just get one year that could be a 10-20% return on top of whatever the market provides.
    1
  86. The rules are pretty vague since situations differ and investors love to exploit loopholes. The main thing they mention is rebuying the same security or another security from the same company (e.g., BRK/A and BRK/B or GOOG and GOOGL). In my experience with the IRS, as long as your argument isn’t total nonsense or clearly bad faith, they’ll allow it. In this case if they’re held by different companies or based on different indices (say one’s the S&P 500 Growth and another is the Russell 1000 Growth) it’s much easier to argue they’re different. And of course you could always park the money somewhere for a month and come back.
    1
  87. US government bonds can be bought directly from the Treasury, I believe some states do that too. Typically though you'd go through a brokerage. They'll have a section of their website labeled "Fixed Income" or something like that. If you don't have a lot of money to invest, you may want to start with a mutual fund (or its close relative the exchange-traded fund) that invests in bonds. That way you can spread your money across several different companies.
    1
  88. I guess “10X my money” sounds better than “go $900,000,000 into debt”.
    1
  89. 6:00 Real life example of this, compare QQQ to TQQQ for calendar years 2022-2023. TQQQ dropped harder and needed longer to recover.
    1
  90. No, it's up to the company's management. Microsoft pays a dividend, Google doesn't. The general tendency is for younger and faster-growing companies to pay smaller or no dividends because they believe they can put that cash to better use (and help you get a better return) by reinvesting it into the company. Companies can also change their dividend from time to time. There are companies that have steadily increased their dividend each year, sometimes for decades. There are also cases like Hawaiian Electric which recently suspended their dividend because they're probably going to be held partly liable for the Maui wildfires and that means they'll need cash.
    1
  91. There hasn’t yet been an IRS ruling on that aspect of ETFs, like whether you could sell VOO and buy SPY to harvest a loss (which are managed by different companies but track the same index). When there’s a gap like that, that usually makes it a question of whether the taxpayer gets challenged on it, and then whether they can justify their move with a straight face. In my amateur opinion, I think in this case one could point toward the expanded options with lower fees, as well as the fact that GBTC changed its thesis from what they’d originally invested in.
    1
  92. One thing that really stuck with me was when someone observed that preferred stock for a solid company in a relatively reliable industry (banking, real estate, utilities) offers about the same rate as “junk” bonds. If we believe the market to be at least mostly efficient, there has to be a reason for that. Looking at the attributes of preferred stock you can see why the rate is what it is. Preferred stock is essentially an open-ended loan subordinate to the company’s other debt. The company can just pay a fixed amount per year (which because of inflation makes borrowing cheaper for them and less profitable to you each year) and if they run into trouble they can defer or even skip those interest payments. That’s a good amount of uncertainty to take on, so you’d better get paid.
    1
  93. 1:45 That should be a sign right there. If an introductory video is over your head, maybe you’re not ready to jump in yet.
    1
  94. He’s doing movie summaries, and that wasn’t in the movie. The naked shorting hypothesis came about months later in places like Superstonk. The movie already took some liberties to make Wall Street the villains. They imply as heavily as they can without outright accusing that Griffin told Tenev to disable buying and that he lied under oath.
    1
  95. Yeah, everyone knows SPY and that’s probably the one to use if you’re going to work with options, but VOO, IVV, and SPLG are much cheaper. (And some proprietary equivalents like FNILX)
    1
  96. Usually, yes. Google was a highly profitable and rapidly growing company before the split, and they continue to be that way after the split. That’s probably at least part of the reason for post-split increases. Which are more modest and less reliable than our TikTok friend would suggest. In the olden days maybe that accessibility thing was true. Companies would often split to keep their share price under, say, $100 because when a typical order was 100 shares it could get really expensive to build a portfolio. (Either that or you bought into a direct stock purchase plan with each company. In that case your order would get batched and executed on a preassigned day each month.)
    1
  97. Recently we’ve seen a move toward zero commissions (our host has a video on that and how they make money) but before that it was a couple of things: 1. Some brokerages have tiered schedules so that more active traders pay less per trade. So maybe your first 50 trades in a month were $7, then the next 50 were $5, then $4. 2, There are also some deep-discount brokers that provide basically no analysis or charting tools (assuming you’re already paying for your own) so they can charge less in commission. 3. Having a bigger portfolio helps, so you can make bigger trades without risking too much of your money at once. Let’s say trades are $5 each way. To buy and sell a $500 position means giving up 2% of your money to commissions; that’s going to be hard to beat. Scale that up to a $2,000 trade and now commissions are only 0.5%. Lots of stocks move 0.5% in a day. A couple of side notes: 4. In addition to day trading there’s also swing trading, which is similar in its methods but holds stocks for days or weeks. 5. Traders (who know what they’re doing) also place limit sell orders on the upside and downside to avoid holding too long. Structured properly, your their average loss should be less than their average gain. That way even if they only have coin-flip odds of guessing which way the stock will move they should come out ahead overall.
    1
  98. It may be intentional. Historic inaccuracies and logical fallacies filter out people who might question the sales pitch.
    1
  99. If anybody needs to be taken down a peg, it’s waffles.
    1
  100. Yes, any decent broker or data feed will adjust the prices retroactively as if the stock had always been split.
    1
  101.  @genghischan69 They all exist in some form, but they take on additional importance when the brokerage can’t rely on commissions. I should also note that brokers pressuring investors to trade so the broker could take a cut, that was highly common in the days of human brokers. If you’ve seen “Boiler Room” and “The Wolf of Wall Street” there’s plenty of truth to that.
    1
  102. 2:30 One thing I’d add here is that this is just an example. You should have an idea of much of your money you want in any one company, but that doesn’t mean that every position has to be equal. For example, let’s say most of Alice’s investments are in household names like Microsoft and Costco, companies that may have a bad year now and then but are unlikely to just evaporate. But she also wants to dabble in something with a higher risk-reward, say a little biotech company that could skyrocket or collapse depending on how their research goes. It would be perfectly reasonable to keep that position smaller.
    1
  103. This is the same guy who said you can’t live on a paltry $400,000 per year. Bro’s completely detached from reality.
    1
  104. Meh, it’s like Craigslist: not a scam in and of itself, but a convenient breeding ground for scams because of how they cut out those troublesome standards and overseers.
    1
  105. ​ @harrisonfreund7845  Exactly. Individuals may choose to invest according to the social-justice criteria many commenters are railing against, but ESG reports from rating agencies are more about managing business risk. What might make the company look bad, drive customers away, or attract lawsuits? Common topics include: Environmental: Is the company meeting industry standards for responsible waste management and responsible marketing? If not, they risk attracting regulatory attention. Back in Ye Olden Days, McDonald's used to package their burgers in styrofoam containers, and it was customer demand that led them to switch to paper. Social: Is the company responsive to shifts in consumer preference? For example Monster Energy's ESG report by MSCI notes that demand for low-sugar options has grown in recent years, and the company hasn't done a whole lot to respond to that. They have over 30 flavors and only about five have a sugar-free option. Governance: Are a sufficient number of the Directors independent from the company and its owners? Do they rotate out regularly, or are their Directors so entrenched they may as well be employees? Companies like Tesla and Meta are structured so the CEO also holds a huge share of the voting power, so if you don't like where the company's headed you can't do anything about it. That being the case, it's important to consider what you personally value as an investor. You can't outsource your ethical decisions to rating agencies. For example, Nestle is constantly catching flak for everything from price fixing to child labor. But they score well enough in other areas like data security and product safety that overall they tend to get pretty solid ESG ratings (AA according to MSCI).
    1
  106. Another point in favor of buybacks, investors seem to view them as more like special dividends than regular. As our host said, here in the US we have that custom of steady or escalating quarterly dividends. Buybacks have a more distinct beginning and end.
    1
  107. 7:45 Grain of truth to angry 401k bro: if you have debt with a double-digit interest rate, your investment returns wont keep pace with the interest you’re paying on the debt, so the more you contribute the more you fall behind. In that case it may be worth contributing just enough to get the employer match because that’s a 50-100% extra*, but beyond that focus on the debt. And also yes, at some companies the fund options in the 401k stink. When you change jobs, roll it into an IRA so you can invest it how you want. * Maybe. If the matching funds don’t really belong to you (don’t “vest”) until you’ve been there 5 years and you don’t expect to be, then it’s probably not worth planning as if you’ll get that extra. Just work on the debt and maybe drop a bit into an IRA.
    1
  108. 4:10 One thing I’d mention here is that if you want real estate income without having to be personally involved, look into Real Estate Investment Trusts (REITs). It’s basically what it sounds like: you invest in a company that owns mini malls, medical space, bowling alleys, whatever, which they rent out and service, distributing most of their net income as dividends. But yeah, don’t expect overnight wealth. Even in today’s high-rate environment most REITs are paying 5-7% annually. And since they pay out most of their income as dividends (legally they have to) rather than reinvesting in more properties, they grow slowly if at all. [Personally I stick to commercial REITs. I have fewer qualms about being a landlord-by-proxy to businesses than to families.]
    1