Ever considered share trading?

Post Reply New Topic

Maybe The wolf of wall street comes to mind, sharp guys against whom one has no chance, but in practise youll meet the same range of intellects and intents youll encounter on any other site, with the same range of irrational expectations. This in fact gives Autistics an edge, being more emotionally detached.

As Ive mentioned elswhere, most are convinced that buying back shares is a good thing, but ismostly done when companies are flush with cash and are determined to use it for the benefit of executives, without wasting it on dividends, the only practical way of returning capital to shareholders.

But wait; arent executives working to maximise shareholder value? Well, you can believe that if you want to. Lets look at the reality; when earnings, the all important difference between cost and income, are plentiful, they take chunks of it out, and give it names like free cash flow, and use it to pay for those buybacks and pretend they cost nothing! Most traders believe this, along with the rest of the bull they put out during earnings reports. Then there,s Generally Acccepted Accounting Practise which is supposed to keep things reasonably aboveboard, whilst allowing those who come to be regarded as great managers by manipulating the numbers, rather than from skilfully managing their businesses. Then theres NonGAAP, which isnt worth the paper its written on. Make it your practise to note the real numbers, but you can safelly ignore the promises, other than for the impact they may have on the thinking of your opponents.

Yes, opponents; its a competition. Its also gambling, with all that implies. So lets look at that: most believe that reducing the number of shares outstanding gives them a greater share of future earnings, but no capital returns to them based on earnings, so in reality, its a greater share of zero. Why should it, when, if a company spends X percent of its value to buy back X percent of its shares,for cancellation, as is claimed, then its value per share doesnt change. As for those which arent cancelled; they end up as executive bonuses...

Another strange belief involves averaging down, the practise of buying more shares on which one has lost money, to reduce the loss per share, a meaningless measure as the total loss remains unchaged. Money has no provenance; it doesnt matter where you won or lost it. What matters is the total, so dont get emotionally involved with the shares you trade; the only good reason for buying a particular share is the expectation that it will rise in value.

At age 70 I have little enthusiasm for long term investing, a different subject.

On the web you'll find helpfull comparissons between dividends and buybacks, presented in an unbiased manner,which conclude with a non-comital statement like "we like buybacks". They do not say anything like "buybacks are beneficial to shareholders". Like in the post above, they do not offer any mechanism by which they return capital to shareholders; there's just the constant message that buybacks are good! This should tell you that someone is making a lot of money out them, and its not shareholders.

Warren Buffett, known for his value investing philosophy and insights on corporate governance, would likely address several aspects of your points:

1. Long-Term Focus: Buffett often emphasizes the importance of investing for the long term rather than getting caught up in short-term market fluctuations or corporate maneuvers like share buybacks. He would advocate for investing in fundamentally strong companies that create lasting value.

2. Value of Shareholder Returns: Buffett typically supports returning capital to shareholders through dividends rather than buybacks, unless a company has excess cash that can't be reinvested effectively. He believes dividends provide a more tangible return on investment.

3. Skepticism of Non-GAAP Metrics: Buffett is known for being wary of metrics that can be manipulated. He would likely encourage investors to focus on GAAP earnings and to be cautious of non-GAAP figures that can present a more favorable picture of a company's performance than reality.

4. Understanding Financials: He would stress the importance of understanding a company's financial statements thoroughly and looking beyond the numbers to assess the quality of management and the business itself.

5. Rational Decision-Making: Buffett promotes rational decision-making and emotional detachment in investing, which aligns with your point about the advantages of being less emotionally involved in trading. He often advises investors to be fearful when others are greedy and greedy when others are fearful.

Overall, Buffett would encourage a disciplined, informed approach to investing that prioritizes long-term value creation over short-term gains.

I'm currently saving for an investment capital of 5k.
It's taking me a while because of inflation and groceries and such.
I would like to invest in core consumer products like facial tissues and chemicals. Because I think these will still be pretty stable during the next market crash.
Day trading doesn't appeal to me. I see stocks as an investment against inflation like commodities (gold, silver etc.)

Trading is in a bit of a funk right now.

It is gambling. People who make money in day trading are the ones publishing newsletters and selling products outside of trading itself.

High freq and dark pool trading dominate the market now. Retail brokers make their money essentially forcing you to trade behind the industry.

If saving $5000 is a time consuming process I would recommend finding lower risk opportunities (bonds, mutual funds) because it sucks to get months of worked wiped out in a day…

rs.[/quote]
Dividends are irrelevant really.People should care more about the total return instead of just caring about dividends so much.You can get the same effect of a dividend by selling shares and making your own dividend.Also dividends are tax inefficient in the stang.[/quote]

There,'s a link between diviidends and share price, in terms of overal value, of course. IT's especially noticable with habitual high payers where the SP plumets after each dividend payout, but what's the most representativs SP in this case? Unlike most, I consider it to be the lower value, where it stays, untill it climbs in anticipation of the div payout. So how to profit by being detached and rational? Not by following the herd, buying just before the div payout, in hope of a quick selloff while the SP is still high: you'll find no buyers (surprise!) No, the time to buy is as the SP begins to rise, giving you the option of taking a small but safe profit before the SP peaks [*] or else staying in for the long term, enjoying a regular payout, for as long as the price you payed remain above the annual mininimum. Bear in mind that the first option frees up money that may be better used elsewhere: that's the name of the game!
[*Don't fall into the trap of grieving for what you may have made by holding on for a better price; a safe profit wins every time. As previously stated,avoid emotional attachment: Any mightabeen profit is no different to what you might have made by putting your money elsewhere]

Quick question for you guys - there aren't a lot of threads about investing on WP (at least not current) so I'm going to the spergy 'force a topic change' thing that I never do with NT's but here considering the bandwidth of these conversations there'd hardly be anywhere else to talk about it.

So a couple questions:

1) I've been hearing people say that there's high likelihood that we see a severe market correction downward about three or four months after initial rate cuts (mid September 2024 - so aiming toward December 2024 or January 2025) - do you guys think that's overwhelming likelihood, low double-digit likelihood, or too few similarities to 1987 and 2008 for that to be realistic? Doomberg says oil prices were dropping as China subbed out heavy machinery with LNG but with Israel / Palestine / Iran that windfall could be challenged.

2) I've been looking at what various people are saying about how the US handles fiscal dominance and (I'm not *super* knowledgeable but I tend to feel like I'm a reasonable judge of experts) I've really been impressed with Luke Gromen's analysis because he's given several possibilities for what could be happening although he gets into Lyn Alden level detail so some of his interviews (like the recent one with David Lyn) took a few rewatches to grock it all. The most obvious things that get discussed are that if the US can't kick the can and can't discharge its debt it will run the money printer like never before. Another possibility is that gold could be repegged (a figure I see floating around online right now - whether it's realistic or moonboy for this scenario - $20K per oz). Do you guys have any thoughts on what makes sense based on the metrics you're seeing?

The economy in China is flourishing.
This is what I pasted from my notebook:
9/06 A092267 +3236.14 (-10,000.00)
9/07 A092267 -3236.14 (+10,426.16)
9/12 A083247 +193.26 (-2,000.00)
9/14 Au9999 +18.235 (-10,000.00)
9/14 Au9999 +1.765 (-982.19)
9/14 A323551 +4,500,000 (-13,251.44)
9/16 A022263 +1.02263 (-300.00)
9/17 Ag9999 +803.22 (-5,000.00)
9/19 A083247 -193.26 (+2,623.51)
10/09 A242635 +1,265.42 (-15,000.00)
10/11 Au9999 -20.000 (+14,268.25)
10/11 A242635 -1,265.42 (-18,223.05)
10/11 A323551 -4,500,000 (+46,323.82)
10/11 Ag9999 -803.22 (-4,983.17)
10/11 A022263 -1.02263 (+312.46)
so I ended up winning like 50,000 from that time alone

_________________
Sorry if I suck at communication
I have an IQ of 161(no bragging intended) but an EQ of only 24 so I probably suck a lot.
I sleep about 11 hours a day and I mostly drink water.
PM me if you would like a friend!

Diagnosed aspergers at 12, dosn't care a lot about it