Should I invest in stock market if I am trying to start a fastlane business?

[sparechange]

The only good posts are from MJ himself... lol

 

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[P3HSB]

The only good posts are from MJ himself... lol

ill drop some gems here,

if done correctly, buying individual stocks can yield a significantly higher return than an index fund. In some cases, can even be better than starting a fastlane business

Stocks in the growth tech sector are seeing gains as high as 1000%+

For example, people who purchases $TSLA around March. If you had put in 20k in $TSLA pre stock split and held, you would of been up a cool $100,000+ in around 4 months

 

[FierceRacoon]

Let's say it takes a week of full-time effort for you to educate yourself about the situation and invest $100k, and miraculously you get a 5% return without any risk. That is, given that the risk-free rate is zero in both the U.S. and in Europe.

Then this extra $5,000 is earned in 40 hours of effort. If you can make over $100/hour in other ways, it is probably better not to bother with investment. Unless, for example, you want to learn from the experience, or unless you have studied markets for many years and are capitalizing on this knowledge.

 

[Kevin88660]

Let's say it takes a week of full-time effort for you to educate yourself about the situation and invest $100k, and miraculously you get a 5% return without any risk. That is, given that the risk-free rate is zero in both the U.S. and in Europe.

Then this extra $5,000 is earned in 40 hours of effort. If you can make over $100/hour in other ways, it is probably better not to bother with investment. Unless, for example, you want to learn from the experience, or unless you have studied markets for many years and are capitalizing on this knowledge.

No one I know got rich playing stocks. -Jack Ma

 

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[ljean]

ill drop some gems here,

if done correctly, buying individual stocks can yield a significantly higher return than an index fund. In some cases, can even be better than starting a fastlane business

Stocks in the growth tech sector are seeing gains as high as 1000%+

For example, people who purchases $TSLA around March. If you had put in 20k in $TSLA pre stock split and held, you would of been up a cool $100,000+ in around 4 months

This is not a fair way of looking at it. Anyone can find numerous stocks that went up 5x in the last few months. Its a bit more difficult to select the ones that will go up 5x in the next few months.

 

[Black_Dragon43]

Over the past 30 years, my businesses have enjoyed 200, 300, 1000% returns.
Over the past 30 years, the stock market has enjoyed 8% returns.

And yet... there are day traders out there who make $15K/day, and do so on a consistent basis. For them, it is a full-time job. Looking at the news, looking at technical indicators, 3 monitors opened, trading the most active/volatile stocks, and so on. It's not something that most people would have the patience and dedication/concentration to do, but it does exist.

Also, a lot of this has to do with knowing how to do it successfully. If you trade with brokers like E*Trade, Robinhood etc., you're screwed even before you make your first trade. They don't even give you real-time market data and what companies like these often do is that they sell your order flow to the market-maker who lifts the bid/ask prices before executing your trade, thus entering you at a massive loss already... of course, on "$0 commissions" lol

So if you're smart, you know how to set yourself up so you don't start at a disadvantage, and so on, then you can profit. But it is hard, like anything else.

 

[Kevin88660]

And yet... there are day traders out there who make $15K/day, and do so on a consistent basis. For them, it is a full-time job. Looking at the news, looking at technical indicators, 3 monitors opened, trading the most active/volatile stocks, and so on. It's not something that most people would have the patience and dedication/concentration to do, but it does exist.

Also, a lot of this has to do with knowing how to do it successfully. If you trade with brokers like E*Trade, Robinhood etc., you're screwed even before you make your first trade. They don't even give you real-time market data and what companies like these often do is that they sell your order flow to the market-maker who lifts the bid/ask prices before executing your trade, thus entering you at a massive loss already... of course, on "$0 commissions" lol

So if you're smart, you know how to set yourself up so you don't start at a disadvantage, and so on, then you can profit. But it is hard, like anything else.

The word “consistent“ in day trading is a big question mark. 95 percent of the supposed consistency are either “trust me Bro” or “course selling gimmick”.

Math and Computing PHD work in teams to grind out 10-15 percent audited return annually. And you see “one man show” trader who claims they can double their account assets in a year using charts.

 

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[Black_Dragon43]

The word “consistent“ in day trading is a big question mark. 95 percent of the supposed consistency are either “trust me Bro” or “course selling gimmick”.

Math and Computing PHD work in teams to grind out 10-15 percent audited return annually. And you see “one man show” trader who claims they can double their account assets in a year using charts.

Well, I know people personally who do this, so they do exist.

But yes, obviously there are also a lot of "trust me bro", or even worse, people who have multiple accounts and show off earnings in one but not losses in the others, sell a course, use their students to make a profit, etc.

Just as in any industry, you get the full spectrum. Fakes, cons, and real ones too.

Also, another thing... day traders don't think in terms of percentages and doubling accounts and so on.

They think in terms of how much do you gain/lose per day in total amount?

You start with the goal, say, of making $1000 per day. When you've hit your number, you close the trading platform, and go do something else.

Also, the 10-15% audited return anually... those guys manage portfolios of huge sums of money. The more money you manage, the harder it is to get big percentage returns. Getting a 1000% return is easier with $1 invested than with 100M.

It's very similar to poker. We've had many guys on this forum make big bucks out of poker... I think @snowbank is one of them. It's HARD and very draining - they will be the first ones to tell you. But it's not impossible.

 

[Kevin88660]

Well, I know people personally who do this, so they do exist.

But yes, obviously there are also a lot of "trust me bro", or even worse, people who have multiple accounts and show off earnings in one but not losses in the others, sell a course, use their students to make a profit, etc.

Just as in any industry, you get the full spectrum. Fakes, cons, and real ones too.

Also, another thing... day traders don't think in terms of percentages and doubling accounts and so on.

They think in terms of how much do you gain/lose per day in total amount?

You start with the goal, say, of making $1000 per day. When you've hit your number, you close the trading platform, and go do something else.

Also, the 10-15% audited return anually... those guys manage portfolios of huge sums of money. The more money you manage, the harder it is to get big percentage returns. Getting a 1000% return is easier with $1 invested than with 100M.

It's very similar to poker. We've had many guys on this forum make big bucks out of poker... I think @snowbank is one of them. It's HARD and very draining - they will be the first ones to tell you. But it's not impossible.

The part I question about consistency because unless you operate as a team and trade other people’s money, you do not have the arsenals to compete these days.

Profitable strategies get eroded over time as others discover it so there is Constant pressure to discover new strategies and backtest them.

You can have a wonderful year as trend trader in 2020 due to covid. When markets go choppy the opportunities are just gone. Discretionary human traders cannot repeat their success easily. Nothing Profitable works forever and between you find what works again there will be inevitable a string of loss.

When you are dealing with stocks and commodities, highly liquid things to trade, there is enough market liquidity to absorb your order without giving you a bad price, there is little difference trading a 10k account vs a 20 million account these days. They are both too small to make an impact. There are a lot of small teams operation in 8 digits fund sizes these days.

I would say that if someone can work alone and achieve consistent quarterly profit and make one million dollar across all different market cycles, he has the capability to make 20 million. Trading for a living today is 20x harder than creating real value to real customers.

 

[Black_Dragon43]

The part I question about consistency because unless you operate as a team and trade other people’s money, you do not have the arsenals to compete these days.

On the contrary my friend... As a team, you need to pay for everyone on the team, and likely are managing more than just your funds. This limits the stocks you even look at. For example, stocks that have low volume may be blowing up, and you may successfully be able to get returns on them with 50K... but you can't get returns out of it with 1M because the volume/liquidity simply is not there. So you skip it... You could choose to trade with just 50K, but that is time that the rest of your 1M sits unused... You need to find opportunities that you can trade with 1M to make the most out of your money.

So you don't have to compete with those guys... You can choose to trade something where they're not even competing with you, simply because it doesn't make sense for them to spend their time competing there.

Profitable strategies get eroded over time as others discover it so there is Constant pressure to discover new strategies and backtest them.

Yes, this is true, as far as I have noticed and spoke to people. And then there's the algorithms of the market makers which often trade against you.

When you are dealing with stocks and commodities, highly liquid things to trade, there is enough market liquidity to absorb your order without giving you a bad price, there is little difference trading a 10k account vs a 20 million account these days. They are both too small to make an impact. There are a lot of small teams operation in 8 digits fund sizes these days.

This is not true - it depends what you trade. Maybe I have a pattern which gives me an edge in a penny stocks, but not in AAPL. For smaller traders, who trade as individuals, there are often MUCH bigger profits to be made out of stocks which have enough liquidity for their size, but not so much so as to attract the larger institutional traders.

The problem is that this doesn't scale. I might be able to make 100% every day on $100. But the moment I try to make it with $1,000, it breaks, and I lose money, or make just 10% on it...

So there are different opportunities that you need to be looking at based on how much money you're trading with. The 100M+ institutional investors wouldn't even GLANCE at these high percentage opportunities, because they work only on low volume.

It's like this in all businesses really... when you first start out, you'll go for the opportunities that the bigger fish are ignoring, because it's not worth their time. When you conquer them, you scale to the next thing. And so on.

So as you make more money, obviously you scale your operation, and you start getting a team, and doing some of the things they're doing, etc. You eventually move towards building a business out of it.

I would say that if someone can work alone and achieve consistent quarterly profit and make one million dollar across all different market cycles, he has the capability to make 20 million. Trading for a living today is 20x harder than creating real value to real customers.

I agree, it is very hard and not suitable to all personality types anyway.

 

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[Think Expand]

Wow! @MJ DeMarco You've just distilled years of wisdom into a simple word of advice. Possibly, this is could be the whole Fastlane Book summarized in this reply!

Reinvest in your business first as a CENTS based business offers greater returns than stocks.
If there is surplus capital, I invest in dividend paying stocks, or REITs, or instruments that give a payment for capital rental.

The end goal here, both for my business and investments, is to get paid passively with the passage of time.

If you think about it, ownership shares in a dividend paying company will pay you passive income... FOR LIFE. While 4% might not be a lot, it is if we're talking thousands of shares.

Our objective is to be FREE ... the quickest means to obtain that freedom is a business. And when the day comes when you don't have (or don't want) a business, you have the latter to leverage.

 

[Kid]

For some of you who aren't reluctant to losing money, I'll say don't lose your time.

If you want to know what this claim is based on, then well, its research findings that active trading funds overall lose money or underperform compared to index funds.

One summary of this is quite on point: as an stock picker you have same chance of choosing right stock as a monkey throwing dart at list.

The only thing that differs monkey from you is that monkey doesn't think it knows what it does.

 

[P3HSB]

One summary of this is quite on point: as an stock picker you have same chance of choosing right stock as a monkey throwing dart at list.

The only thing that differs monkey from you is that monkey doesn't think it knows what it does.

there are tons of people consistently beating the market year after year without being a daytrader. You just have to know where the future is heading

 

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[Guest-5ty5s4]

For some of you who aren't reluctant to losing money, I'll say don't lose your time.

If you want to know what this claim is based on, then well, its research findings that active trading funds overall lose money or underperform compared to index funds.

One summary of this is quite on point: as an stock picker you have same chance of choosing right stock as a monkey throwing dart at list.

The only thing that differs monkey from you is that monkey doesn't think it knows what it does.

To be honest you can just pull up a list of the S&P 500 companies, with weights, and easily buy shares in the main ones that don’t suck and ignore the other ~400. But yeah VOO, SPY and QQQ are good too.

the top 10 companies are most of the movement of the entire index anyway.

reinvested dividends account for a large portion of growth, too. Commissions can hurt over decades.

anyway, I’m sticking with what MJ says about making your money outside of the market and investing lump sums for income, not using passive investments for growth.

 

[Ahmet1054]

For those of you who buy stocks, what are the pain points you are facing right now? What features would you like to have that you don't hace currently ? How do you screen the stocks to create your portfolio? What service would ease the process but don't exist at the moment?

Thx!