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View Full Version : It's Painful Being Foolish


barn32
03-10-2015, 05:01 PM
I'm long one stock, Visa (V). I've been waiting for a pullback to start buying some things like AAPL, where I thought 123 would be a good spot, but the way Visa kept shooting up I had to have some. I was up 2500-3000 at one point.

So anyway V is up 7 points one day about a week or so ago, and I thought it's time to get out. But no.

It drops, and then goes up again. Get out. Nooooo.

Finally I'd had enough and it was up 2.5 yesterday so I put in my bid to get out. I got busy, was away from things, didn't get filled, so maybe today.

Nooooooo! Down ~$5.50 for thee hundred shares.

The good news is that all of my spreads are doing fine, and I was 11 out of 12 on my e-mini scalps. But that still doesn't cover my loss on Visa today.

Oh what will tomorrow bring.



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PICSIX
03-10-2015, 06:43 PM
I'm holding Visa until after the 4 for 1 split. It will become "affordable" at that point and new buyers should drive it up fairly quickly. I believe the split takes affect on the 19th. :ThmbUp:

Just checked, it's the 18th.

whodoyoulike
03-10-2015, 06:47 PM
Are you in options or shares?

PICSIX
03-10-2015, 06:55 PM
In shares since Feb. 18th @ 270.11.

Actually the 12th....18th was settlement date.

1st time lasix
03-11-2015, 12:02 PM
Splits are irrelevent. Biggest myth in stock market investing. Just because there is another cut in the pie---doesn't make the pie any bigger. In graduate school I did a comprehensive study. Only time post-split shares tend to outperform is with a corresponding dividend increase. Otherwise...post split shares do not outperform...pre-split shares. Of course if any company outperforms earnings/revenue "expectations".... or has some other positive catalyst like a new product/drug approval or merger news...it will tend to outperform later---- no matter if the stock has split or not.

badcompany
03-11-2015, 12:07 PM
Splits are irrelevent. Biggest myth in stock market investing. Just because there is another cut in the pie---doesn't make the pie any bigger. In graduate school I did a comprehensive study. Only time post-split shares tend to outperform is with a corresponding dividend increase. Otherwise...post split shares do not outperform...pre-split shares. Of course if any company outperforms earnings/revenue "expectations".... or has some other positive catalyst like a new product/drug approval or merger news...it will tend to outperform later---- no matter if the stock has split or not.

A split is akin to taking your $20 bill and giving you two $10s.

_______
03-11-2015, 09:25 PM
Splits are irrelevent. Biggest myth in stock market investing. Just because there is another cut in the pie---doesn't make the pie any bigger. In graduate school I did a comprehensive study. Only time post-split shares tend to outperform is with a corresponding dividend increase. Otherwise...post split shares do not outperform...pre-split shares. Of course if any company outperforms earnings/revenue "expectations".... or has some other positive catalyst like a new product/drug approval or merger news...it will tend to outperform later---- no matter if the stock has split or not.

Fully agree with your point on splits being almost meaningless but that isn't the biggest myth. Here are 4.5 that might be at least equal:

1) Investing = Gambling. If Wall Street is a casino, it's the odd one that makes nearly every visitor with patience a winner. Look at stocks as pips that move up and down and you might think it's all random chance. But understand that they actually give you a limited liability ownership of money making machines in the greatest economy in history and the upward bias of stock prices over almost any long period is understood.

2) Stocks that go up must come down. There is no law of gravity. Buying a good company at a fair price can happen even when that company is at a 52 week (or all time) high.

2a) Stocks that go down must come back up. There isn't a rubber band either. Just because a company is cheap compared to it's price a year ago doesn't make it a value.

3) Good company = Good stock. There are tons of well managed, highly profitable companies whose stock I wouldn't touch with a 10 foot pole.

4) Growth beats Value. Future growth is an important metric is determining what a fair value should be. But I would rather own a cash cow with limited growth prospects than pay 40x next years earnings for 20% growth. It always comes down to a determination of fair value and pure growth investors can overpay.

PICSIX
03-12-2015, 08:27 AM
Splits are irrelevent. Biggest myth in stock market investing. Just because there is another cut in the pie---doesn't make the pie any bigger. In graduate school I did a comprehensive study. Only time post-split shares tend to outperform is with a corresponding dividend increase. Otherwise...post split shares do not outperform...pre-split shares. Of course if any company outperforms earnings/revenue "expectations".... or has some other positive catalyst like a new product/drug approval or merger news...it will tend to outperform later---- no matter if the stock has split or not.

Yes, I understand this, but today we live in a world where anyone with a computer can trade stocks. Many of these traders are of the mentality that they can't buy V @ $280 but can when it becomes "affordable" @ $70.

barn32
03-12-2015, 09:31 AM
Yes, I understand this, but today we live in a world where anyone with a computer can trade stocks. Many of these traders are of the mentality that they can't buy V @ $280 but can when it becomes "affordable" @ $70.I agree. That's one of the reasons I bought AAPL after the split.


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