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.
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  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.
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  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.
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  4. The world’s most humble thousandaire.
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  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.”
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  6. Can’t wait to see how many new bagholders we get from this.
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  7. Yes, but also to explain that investigations are more complex than “it’s kinda sus and I don’t like him, therefore guilty.”
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  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.
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  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.
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  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.)
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  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.
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  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.
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  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.
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  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.
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  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.
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  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.)
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  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.
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  18. Tell me you didn’t watch the video…
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  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.
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  20. For sure, it’s an old concept. “Lipstick on a pig” and whatnot.
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  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.
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  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.
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  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.
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  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.
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  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.
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  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.
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  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.
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  28. Yeah, it just means that when those factors change, they move in opposite directions.
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  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.
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  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.)
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  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.
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  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.
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  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.
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  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…
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  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.
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  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.
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  37. Ice bath, journaling, meditation, edging, everything you’d expect for someone with the sigma grindset.
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  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.
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  39. But number went up!
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  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.
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  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.
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  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.
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  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.
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  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.
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  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.)
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  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.
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  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.
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  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.
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  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.
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  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.
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