Stock Market Game 2021

[HarleyQuinn]

Is there a chapter on Mr. Emotionally Invested Sports Fan that a friend of mine could read?

I dunno if any sports fan would take such a chapter to heart, to be fair! *rages after a Bruins loss*

 

[BruiserBrody]

The Trade Desk continues to print me money today! I bit the bullet and bought more TTD stocks at WAY higher prices than I could have 8 days ago. (Probably bumped my average share to the low 80s from 74) I'm a little worried that it is going to explode with all this momentum and suddenly hit the 128 price target before I can buy in and enjoy the ride.
SeekingAlpha compared it long term to potentially be a company worth multiple hundreds a share.
I bought up some of the competitors stock too. (PUBM and MGNI) in case TTD starts a little boom period (which it may have already with PUBM)

Why Shares of PubMatic Jumped Nearly 42% Higher This Week | The Motley Fool

Q3 earnings were far better than anticipated.

www.fool.com

Is It Too Late to Buy PubMatic Stock? | The Motley Fool

PubMatic has been doubted, but this quarter proved its immense success.

www.fool.com

 

[BruiserBrody]

https://www.reddit.com/r/Stock_Picks/comments/r4530n

Brody stock pick of the week! Let's lose money together!!

https://www.reddit.com/r/Stock_Picks/comments/qyvxel

Last week's selection

 

[BruiserBrody]

My brother has worked at Dean's Foods for 23 years or so. The union recently decided to eliminate the pension program, which was the main reason he chose to work there. He's in his early 50s and has lots of cash on hand. He said somehow Dean's 401K program only netted a 1.___% gain last year during the big stock leaps. IIRC he said Dean's only matches 3 percent of the employee 401K contributions.
--
I was a bit surprised to see an argument on Reddit (yeah, I know...) yesterday about how eliminating your mortgage debt/paying extra each month is a bad plan. The person was arguing to instead invest that extra money into whatever bank owns your loan and make money off the stock instead to outpace your interest rate.

 

[HarleyQuinn]

My brother has worked at Dean's Foods for 23 years or so. The union recently decided to eliminate the pension program, which was the main reason he chose to work there. He's in his early 50s and has lots of cash on hand. He said somehow Dean's 401K program only netted a 1.___% gain last year during the big stock leaps. IIRC he said Dean's only matches 3 percent of the employee 401K contributions.
--
I was a bit surprised to see an argument on Reddit (yeah, I know...) yesterday about how eliminating your mortgage debt/paying extra each month is a bad plan. The person was arguing to instead invest that extra money into whatever bank owns your loan and make money off the stock instead to outpace your interest rate.

A lot of these companies use their 401Ks to "invest" in crappy companies with higher fees, etc. that often end up netting a marginal return. The biggest aspect of most 401Ks is more the "company match" policy and it being free money you can grow.

From Investopedia: "The majority of companies offer some sort of matching contribution for an average of 4.3% of a person’s pay, but there are many formulas out there. The most common match was 50 cents on the dollar. For every $1 you contribute to your company 401(k), your company will contribute 50 cents. About 71% of companies with matching contributions contribute 50 cents for every dollar employees contribute up to 6% of their pay. Another 21% match employee contributions dollar for dollar, but the maximum is normally lower—commonly 3%.

In fact, most plans now offer an average of about 18 funds, most of which are actively managed domestic and international stock funds. The next most common is domestic index funds."

 

[Dandy]

Are you sure he isn’t investing in horrible “stable” fund options that are bringing down his net return? I used to work with a few older guys that invested in the guaranteed funds and bond funds and bragged about never losing money even though their rates of return were under 3% each year. If I don’t bring in 12% as a minimum each year on my 401k, I consider it a bad year for investing. I also look at the -37% loss years as a tremendous buying opportunity. Some people never understand that.

 

[BruiserBrody]

I sold off all but one share of the Trade Desk and cashed out a few hundred dollars a month or so ago. That left me with a portfolio in the red overall. I took the Trade Desk money windfall and continued to buck the experts on my buying style as I bought into 1 share of a bunch of blue chip big name companies (who had positive $$ numbers as of late). That strategy has worked so far as I made up the 140 dollars my portfolio was in the red and as of this AM I am back to GREEN!
I have a bunch of long term tech stocks bleeding cash (Hurry up Metaverse!!) so not all is rosy. I was surprised to see my best two stocks (based on % of growth since I started this game in Aug/Sept-ish) are now General Motors and Ford (Ford is up a whopping 37%!)
These numbers do not reflect my actual largest holding, which is a 250 dollar a month buy in of Wal-mart stock. WM is a popular "retirement" stock pick as its slow and steady (w/ a dividend). I am all in on it though as I get a 15 percent bonus added each purchase up until I hit 200 dollars in bonuses on the year. Some places suggest pulling the money out every few months and investing it in better growth stocks at my age, but hiding money from myself is probably the best choice.

 

[Dandy]

I cannot stress enough that selling prior to one year eats up a lot of any profit that may be made, and those taxes are not withheld at the time of cashing out. You will get hit with this when filing your taxes the next year. So any experts telling investors to pull money out every couple of months is likely not talking to the investing of $3,000 in Walmart stock annually crowd.

I mean zero offense by that. I am not investing that much annually on stock right now outside of my 401k. But a lot of advice available online is geared toward people that are not buying one share of a stock and then a couple of hundred dollars in another stock. Remember that and look at the difference of holding to one year for long-term capital gains versus your regular income tax rate.

 

[tekcop]

I cannot stress enough that selling prior to one year eats up a lot of any profit that may be made, and those taxes are not withheld at the time of cashing out. You will get hit with this when filing your taxes the next year.

Insert horror story about the dude who turned $10k of crypto into $1 million then back down to about $50k by buying/selling regularly. Your max yearly loss write-off is like $3k.


You can create an IRA and buy/sell as much as you want, btw. But, of course, you can't withdraw from that account until retirement.

 

[BruiserBrody]

I cannot stress enough that selling prior to one year eats up a lot of any profit that may be made, and those taxes are not withheld at the time of cashing out. You will get hit with this when filing your taxes the next year. So any experts telling investors to pull money out every couple of months is likely not talking to the investing of $3,000 in Walmart stock annually crowd.

I mean zero offense by that. I am not investing that much annually on stock right now outside of my 401k. But a lot of advice available online is geared toward people that are not buying one share of a stock and then a couple of hundred dollars in another stock. Remember that and look at the difference of holding to one year for long-term capital gains versus your regular income tax rate.

In the case of the Trade Desk, where I had roughly 1100 invested and it popped several hundred dollars in a 3 day span in November, should I have sold (as I did?) The stock dropped down 25-30 dollars a short time after, but now sits roughly 20 dollars higher than my buy in average.

In my head the 300-400 bucks I made extra is not a tax game changer. Still new to all this so I truly appreciate feedback. (And donations once I lose it all)

 

[HarleyQuinn]

In the case of the Trade Desk, where I had roughly 1100 invested and it popped several hundred dollars in a 3 day span in November, should I have sold (as I did?) The stock dropped down 25-30 dollars a short time after, but now sits roughly 20 dollars higher than my buy in average.

In my head the 300-400 bucks I made extra is not a tax game changer. Still new to all this so I truly appreciate feedback. (And donations once I lose it all)

It's one of those things that the tax difference can be huge and "wipe out" most of the gains made from a straight-up $$ aspect. A lot of times it's less about the pure profit and how much is taxed off. If you make $500 and it's taxed at 25% ($125), that's the same in your pocket as making only $375 but 0% taxed.

Let's say you put in $1,100 at $70 per Share and you sold your shares at $110. % Return = +57%. $$ Profit = +$627

The below assumes you're making between $45,000 - $85,000 range.
Short-Term Tax for 2022 = 12% if filing Married Jointly or 22%(!) if filing Single/Married Filing Separately (so taxed $75 or $138!)
Long-Term CG Tax for 2022 = 0% Rate if filing Married Jointly (making up to $83,350) or 15% if filing Single/Married Filing Separately ($94). It doesn't seem like much but that's +$627 in your pocket at the 0% Rate and still save yourself $44 if filing as Single/Married Filing Separately just by holding the stock for more than a year.

 

[Dandy]

Yes, you should definitely check your tax bracket and specific nuances to what amount you are trading throughout the year and such. It is also important to know that your tax bracket is not as simple as $100,000 x 25% = $25,000. You pay the tax on the percentage for each bracket range and not that percentage from zero. However, once you are already in that higher bracket, that is what you would pay for Short Term Capital Gains. Long Term Capital Gains can save you quite a bit. Without knowing your exact situation, none of us could give you blanket advice and if we did, it would still not be as good as a CPA would provide.

on top of that, it is always important to remember that each individual circumstance can be different. Your scenario above could be better right now, but what would you think if it was worth $2,200 after your one year mark and you would owe $0 for LTCG? The point is, you never know what a stock will do and you just have to evaluate your decision and make it an informed one. Make sure it is one you will be happy with even if you later find out you left money on the table. It happens.

The key to me is to be patient and do not make impulsive decisions. Stocks go down. They also go back up quite often. The big winners are those that have money in over long periods of time: “It’s not timing the market; it’s time in the market.”

 

[sfaJack]

I was a bit surprised to see an argument on Reddit (yeah, I know...) yesterday about how eliminating your mortgage debt/paying extra each month is a bad plan. The person was arguing to instead invest that extra money into whatever bank owns your loan and make money off the stock instead to outpace your interest rate.

You didn't ask me but I agree that it can be a bad plan to pay off debt early. It all depends on the interest rate of your debt(s). If you have low rates (cheap debt) you should consider investing instead of paying extra. For high interest rate loans, it probably is better to pay down the balances.

For instance, the mortgage rate on my house is 2.75%. I can pay extra each month to take bites out of the mortgage balance....or I can invest the 'extra' money. If I earn better than 2.75% return on the extra dollars invested, I win. Earning an annual 3% return is not that hard to do and many times you will earn much more. I would advise this, and it's especially true if the value of your house is worth much more than you owe on the mortgage since you'd be in no danger of taking a big loss if an emergency forced you to sell it tomorrow.

We also recently had some foundation work done and they offered us 0% financing for 18 months. I took it over the wife's objections. She just wanted to pay cash for the work and be done but why do that when it's literally free money for 18 months? I can take that pile of cash and invest it instead for 18 months and almost assuredly come out ahead. Just have to earmark that money and not spend it in the meantime.

 

[BruiserBrody]

Let's go back to 2010 so I can start all over.
House is paid off, major stress gone. If I could alter one thing, I would have done the 401K matching full bore at work the whole time. I was actually using sort of the exact opposite argument you laid out. "Why would I tuck money away over there when I am giving hundreds away to Wells Fargo in monthly interest over here?"
I've had the same vehicle since 2007 (paid in cash upfront) so I really had no other major concerns other than the house payment. I eat cheap. Dress cheap. Hopefully I can produce a nest egg and enjoy life down the road. I had an uncle die at 40 and another at 58ish over the last few years, so who knows if I'll ever use the money I am squirrelling away. At least my nieces and nephews are set up to benefit.

 

[sfaJack]

Let's go back to 2010 so I can start all over.
House is paid off, major stress gone. If I could alter one thing, I would have done the 401K matching full bore at work the whole time. I was actually using sort of the exact opposite argument you laid out. "Why would I tuck money away over there when I am giving hundreds away to Wells Fargo in monthly interest over here?"
I've had the same vehicle since 2007 (paid in cash upfront) so I really had no other major concerns other than the house payment. I eat cheap. Dress cheap. Hopefully I can produce a nest egg and enjoy life down the road. I had an uncle die at 40 and another at 58ish over the last few years, so who knows if I'll ever use the money I am squirrelling away. At least my nieces and nephews are set up to benefit.

It honestly sounds like you're doing ok. You've lost some time and gains by not doing the 401k full match but if you're correcting that now that's a smart move. It is never a bad time to start investing. And now with no mortgage you should have some cash on hand to invest so if you do that, you're probably in a good spot. Congratulations on paying off the house.

My brain is wired that I absolutely hate debt with a passion so I totally understand where you're coming from with that. Despite the advice I gave above, I am still paying a little bit extra on my own mortgage and just last week I paid off the wife's car balance despite the fact we are only going to save about $110 in interest by doing so. I did it just so the payment is gone and I don't have to think about it anymore. My next goal is to throw cash into the investments and grow that nest egg as quickly as I can. Nobody in my family lives very long either and I'd really like enjoy myself for at least a few years after my kids are gone.

Good luck!

 

[Mickey Massuco]

How long should I wait out this current market free fall before I put some money into something safe?

 

[Dandy]

Do you mean:

• Pull your money from stocks because the market is down and put it into something stable like bonds?

or

• Put new investment money on something that is sure to bounce back because that is a safe way to make money?

Because one of those makes me want to cry out in frustration.

 

[Mickey Massuco]

The second one.

 

[Dandy]

Too early to purchase an index IMO. Individual stocks are hit and miss. I haven’t been monitoring any individual stocks that may have bottomed out or come close to it because I am saving as much money as I can for a planned expense. No investments over my 401k contributions all year, probably. But you should look at travel industry stocks impacted by Omicron over the next few months. Those were the ones to purchase in March 2020 and they all bounced back. We are nowhere near that level now though.

 

[Dandy]

And it goes without saying that I am not a licensed advisor and cannot predict the future. Listen to me at your own peril. I am probably not even the top five person on the board to assess this.

 

[geniusMoment]

If interest rates rise you will want to be in on bank stocks. Financials do well in a rate rising environment.

 

[cobainwasmurdered]

I've got a really awesome Crunk Dino NFT you might be interested in YPOV.

 

[Mickey Massuco]

Too early to purchase an index IMO. Individual stocks are hit and miss. I haven’t been monitoring any individual stocks that may have bottomed out or come close to it because I am saving as much money as I can for a planned expense. No investments over my 401k contributions all year, probably. But you should look at travel industry stocks impacted by Omicron over the next few months. Those were the ones to purchase in March 2020 and they all bounced back. We are nowhere near that level now though.

I’m doing it safe, looking to put a chunk of money in an index fund. Was told this might be a negative year. Don’t know if it will be that bad but Im still inclined to wait based on that and your advice. Thanks.

 

[Dandy]

It very well could be a negative year the way it is looking. I would personally think it would get lower than this if it would be a negative. Index is a good move in a down year and about as safe as it gets with stocks in my opinion.

 

[Mickey Massuco]

Thanks for the confirmation, and I’m glad my question didn’t make you wanna cry in frustration.

 

[Mickey Massuco]

S&P 500 keeps steadily dropping. They said if you can get it at a 20% price drop, you should. It's at 10% right now.

 

[Dandy]

I wouldn’t argue that logic. Just be prepared and do not kick yourself if it drops lower than that. Be okay with your decision and don’t try to play the “what if” game. You’ll only kick yourself when no one can time the market 100% every time. Make your (nearly) guaranteed money and go about your day.

 

[Mickey Massuco]

I'm gonna see how it goes before hte March fed announcement. You'd expect a drop in response to a rise in interest rates, but sometimes that drop happens well before the actual rate is announced, and if the rate rise isn't as great as people expect, the market might not tumble at all after that.

 

[BruiserBrody]

Motley Fool's behind the paywall 2022 "Highest Conviction" picks: Axon, Bank of America , MELI (up 35 bucks today!) , Boston Omaha, Lemonade Nvda, Shopify

 

[HarleyQuinn]

Motley Fool's "Top 2021 Stock Picks" (Notable Names) updated as of March 4, 2021. So initial price taken from March 8th, 2021.
iRobot = 119 down to 90
Upwork = 49 down to 37
Fiverr = 244 down to 161
Redfin = 75 down to 52
Beyond Meat = 142 down to 98
Etsy = 221 up to 261
Zillow = 151 down to 68
Pinterest = 72 down to 47
Roku = 360 down to 277
Salesforce.com = 212 up to 310
Walt Disney Company = 197 down to 177
Total Price for 1 Share = $1,842 down to $1,578 (-14% Total)

Even with those sky-high "hits", overall you've had a pretty major loss over the last 8 months.

Thought this would be interesting to follow up on. Not quite a full year later but 11 Months just to give Brody an idea how hard it is to profit in a stock market even with following "expert" picks. Again, it showcases that the buy-in price is as important as the actual stock selection itself.

Worth highlighting that The Trade Desk went from 85.51 on 2/1/21 to 73.04 on 1/31/22.

iRobot = 119 down to 64.79(!!!)
Upwork = 49 down to 27.59(!)
Fiverr = 244 down to 81.41... holy hell.
Redfin = 75 down to 28.31
Beyond Meat = 142 down to 58.73
Etsy = 221 up to 133.57 (This was positive back in November 2021)
Zillow = 151 down to 48.94
Pinterest = 72 down to 27.25
Roku = 360 down to 158.90
Salesforce.com = 212 up to 219.23 (Still positive, yay!)
Walt Disney Company = 197 down to 142.02
Total Price for 100 Shares = $184,200 down to $99,074 (-46 to -47% Total)

In 4 Months, my Ben Graham Watchlist stock group is down -2.31%. That's with Kohl's hitting almost +30%, AFLAC at +18.65%, and Wells Fargo at +17.35% in that span. My biggest droppers are Fulgent Genetics at almost -21% and Viacom at -16%.