He probably had a really good day or two in the market this week. Now thinks trading is easy.
Loan Application - Why you must trade this market
- Thread starter kmiklas
- Start date
He probably had a really good day or two in the market this week. Now thinks trading is easy.
Keep in mind that dividend stocks:For most people yes, but for the argument's sake, let's say one has a steady income that can easily cover the monthly payments. You can create a portfolio of dividend stocks that will exceed or come close to the rate you are paying, can't you? It's safe to assume that stocks will bounce prior to interest rates going up significantly. I don't think I would actually do it, but during 2008 crisis I had Prime MINUS one HELOC! I actually called the bank and asked what will happen if Prime goes to zero
1. Go down by the amount of the dividend when they go ex. As such, the fact they pay a dividend is meaningless from the perspective of their ability to preserve capital. There might be an underlying factor like steady, recession resistant income, that makes them a good choice, but merely paying a dividend is meaningless. It's the difference between me giving you a $100 account that you can cash out any time or one that you can cash out any time but also once a month I give you $1 and reduce the amount you can cash out by $1. Tax issues aside you'll end up with the same amount of money at any given point in time.
2. Can go down in value. Again there may be some underlying reason to own a dividend paying stock, but if your dividend paying stock has a beta of 1 you can expect it to go down 30% when the market goes down 30%.
3. Can cut the dividend at any point. Although as demonstrated above the dividend itself is rather pointless, it's also not fixed and is typically reduced when the company is financially stressed.
I was thinking in terms of dividends covering the loan payments. So what you end up with is interest free loan to invest in high quality stocks at the time of panic. To me, it's a better way to YOLO. Of course you are risking your house's equity. Also, I remember that during financial crisis, the real state values went down and the banks were talking about possibility of reducing the line of credit - margin call. I'm not sure how they would do it. I had my savings account with same bank, I guess they could have taken it, but I hope that is illegal.
Bottom line, while these things are fun to think about, the risks are not worth the rewards, imo.
Yes, I did get whipsawed, I moved everything into ca$h. I reflected on and learned from that experience. Then I talked to the loan officer, realized that benching myself is wrong. I must trade this market.
I mention the loan officer because of his comments about how lenders now judge investors by the 2008 crisis, and how this CV crisis will be used to judge traders for years to come. I talked with him to learn; these guys are very shrewd. I had almost zero expectation of him loaning me a penny.
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Easy for him to say.
If I have billions, I would think the same but since us plebs have nothing, we can't always think about losing money as opposed to making money. Can't protect what we don't have.
@kmiklas be careful.
So, a few years back, I said, GE was down to ~$20 with a juicy dividend, a 100 yr DOW company what could go wrong? Bought GE. GE cut its dividend to $0.00, stock went down to $6.
Fast forward to last month, BA, #1 in Aerospace, DOW component for a long time, solid company, juicy dividend, what could go wrong. Stock @$300 a month ago, ATH $440, wow what a bargain. BA cut its dividend to $0.00, stock @ $95. Fortunately I learned my lessons and didn't buy BA this time.
I thought you mentioned the loan officer because you were taking out a loan?
I know a professional trader with a lot of experience who actually have stayed out of this market on selected days.
I would rather take out a loan if you can prove yourself profitable after one month of trading.
You must be Dozu in disguise. How many virgins can you offer this time?I made an appointment with my bank loan officer for some working capital. He said that how one traded in the 2008 mortgage crisis is a good indicator of how good one is at managing money.
Opinion: Trade this market. Earn your stripes. This is the kind of market where fortunes are made, and you can prove yourself. Now is the time to show what you can do. Smart trading now will serve you for years to come. Girder up your loins, and FIGHT.
I'm hearing newscasters say "Get into cash." F that. Now is the time to hone your skills. You are David, and this market is Goliath. Whatever your trading style, get in there and trade.
Folks, trading the bear market is very different from trading the bull market. In a bull market, you need only sit on your ass and you'll be more or less profitable. That's not the case in a bear market. More people will lose their shirt overnight than make a killing. Don't listen to this rubbish crap.
Sir, this is a wendys.I made an appointment with my bank loan officer for some working capital. He said that how one traded in the 2008 mortgage crisis is a good indicator of how good one is at managing money.
Opinion: Trade this market. Earn your stripes. This is the kind of market where fortunes are made, and you can prove yourself. Now is the time to show what you can do. Smart trading now will serve you for years to come. Girder up your loins, and FIGHT.
I'm hearing newscasters say "Get into cash." F that. Now is the time to hone your skills. You are David, and this market is Goliath. Whatever your trading style, get in there and trade.
I walked into my bank one day after rolling up in my brand new lamborghini and told them i need money to trade, he asked me about my risk profile and i told him i go all in on one day puts have quadrupled my account in a week, he high fived me and said loan approved for a million dollars.