[HN Gopher] Ask HN: How to deal with markets down turn? Feeling ...
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Ask HN: How to deal with markets down turn? Feeling down
Market is collapsing. My stock options value is shrinked 90%
Author : dev_0
Score : 120 points
Date : 2022-10-08 11:44 UTC (11 hours ago)
| augasur wrote:
| I am not a financial advisor, but I think markets are far from
| bottoming out. NASDAQ touched the resistance line, if it breaks
| it, we will go down even more.
|
| I also have multiple stocks that are >50% down, but if the
| fundamentals of the company has not changed since you invested
| when the price was higher, why not to buy it cheaper with
| discount to DCA.
|
| As for me, in this market turmoil I just keep saving cash for the
| bottom and put small sums to DCA in my current positions, as I
| think it is a great opportunity to buy for the long hold.
|
| Just try no to look at our portfolio every hour, because it will
| no change everything the less you look, the calmer you will be.
| the__alchemist wrote:
| Are you in aggressive short positions?
| augasur wrote:
| I do not have any short positions. Mainly investing in long
| term positions and sometimes speculation.
| throw0101c wrote:
| > _Market is collapsing._
|
| If you are not retired, then markets being down are a good thing,
| because everything is "on sale" / at 'discounted' prices. At
| least for the US+ (S&P 500, NASDAQ, Russel 2000), the historical
| 1-, 3-, 5-, and 10-year returns after a 25% drop are quite good:
|
| * https://awealthofcommonsense.com/2022/10/getting-long-term-b...
|
| If you've been foolish enough to cash out--which should really
| never been done by 'retail investors':
|
| * https://awealthofcommonsense.com/2014/02/worlds-worst-market...
|
| You should really start making regular contributions to get back
| in. You should always be fully invested: having cash on the side
| long-term is generally not a good investment. Even if you new
| ahead of time when the dips in the market would occur--which is
| impossible--it's still better to do regular contributions:
|
| * https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-co...
|
| If you try to be clever and skip the worst days in the market,
| you also tend miss the best days:
|
| * https://theirrelevantinvestor.com/2019/02/08/miss-the-worst-...
|
| At the end of the, there is only one piece of advice that average
| retail investors (saving for retirement) should follow:
|
| * https://ofdollarsanddata.com/just-keep-buying/
|
| As for myself: I have no idea if I'm down, or by how much, since
| I haven't logged into my brokerage/trading account since January
| when I topped it up for the new year; almost all of my
| investments are automated so I don't need to see/touch things. I
| have several decades until retirement, so why worry about what
| happens of the course of a single year?
|
| + I'm in Canada.
| xupybd wrote:
| I started investing during this downturn. I'm investing for 30
| years. Either this is the end of the world as we know it and my
| money is going to be worthless or it'll be fine over 30 years.
| theknocker wrote:
| ky5 wrote:
| SnowHill9902 wrote:
| No good if you are not liquid.
| tmn wrote:
| Cash the side line has been a great allocation for this whole
| year. As the mantra goes, don't fight the fed.
| throw0101c wrote:
| The problem is getting out before things drop, and getting
| back in when the drop is "over":
|
| * https://awealthofcommonsense.com/2018/10/the-psychology-
| of-s...
|
| By sitting in cash you're also losing money through
| inflation:
|
| * https://ofdollarsanddata.com/the-cost-of-waiting/
|
| At the end of the day you should always be invested, and if
| you're worried about market undulations then you should own
| some bonds. And besides reducing gyrations, bonds give
| another advantage: a source of 'dry powder'.
|
| If stocks get "too high" you rebalance by selling off some
| equities and buying bonds to 'lock in' the returns. When
| stocks drop you rebalance again by selling off bonds and
| 'buying low' in equities. Bonds/diversification can really
| help returns:
|
| * https://www.forbes.com/sites/investor/2010/12/17/the-lost-
| de...
|
| At least in Canada you can get "all-in-one" ETFs that do this
| rebalancing automatically:
|
| * https://www.youngandthrifty.ca/picking-the-best-all-in-
| one-e...
| richliss wrote:
| If you cut early and miss the top 5% of profits then buy
| back in at 5% above the bottom when it rebounds you'll do
| pretty well.
| throw0101c wrote:
| If you try to miss the bad/worst days you'll probably
| miss the best days:
|
| * https://theirrelevantinvestor.com/2019/02/08/miss-the-
| worst-...
|
| * https://aaiila.org/wp-content/uploads/2020/05/Tuchman-
| Best-a...
|
| * https://www.capitalgroup.com/individual/planning/invest
| ing-f...
|
| * https://www.cnbc.com/2021/03/24/this-chart-shows-why-
| investo...
| pzs wrote:
| That sounds great in theory, but you can't implement it
| in practice. It's often easy in hindsight to identify
| where are those suboptimal 5%-away-from-perfect-timing
| points where you should have done a rebalancing, but we
| have no idea how close we are to the next peak/trough.
| opportune wrote:
| It was very easy to identify as it happened, when
| inflation hit 8% while rates were at 0% and unemployment
| was at like 4%.
| czbond wrote:
| Think of cash as a call option premium for being able to
| buy future investments at a lower price.
|
| People tout the "cash loses to inflation" mantra as an
| absolute - they forget that in large market downturns, cash
| availability compresses while assets become in greatly less
| demand. So cash being available when everyone desperately
| needs it, but few have it, gives cash a value explodes on a
| opportunity basis for a window of time.
| dragontamer wrote:
| > By sitting in cash you're also losing money through
| inflation:
|
| Also by sitting in Stocks, you not only lost 20% this year,
| but also 9% due to inflation for a total loss of ~30%+.
|
| Cash is cash. It gets the job done. I'm not saying go 100%
| cash btw, but it has its place in this time of uncertainty.
| You cannot buy the dip if you're 100% invested, you have to
| be holding cash.
|
| ---------
|
| I suggest holding 10% cash and rebalancing as needed. As
| the market goes up, you naturally sell stocks for more
| cash. As the market goes down, you naturally sell cash to
| buy more stock. This stabilizes the portfolio
| significantly.
| quesera wrote:
| > Also by sitting in Stocks, you not only lost 20% this
| year, but also 9% due to inflation for a total loss of
| ~30%+.
|
| But if you sold the stocks, you would have taken an
| immediate tax hit of ~20-35%, _and_ you would have to
| time the bottom to get back in.
|
| So, it's not at all clear that getting out makes sense.
| Depends on the depth of the decline, and that is
| unknowable.
| remote_phone wrote:
| Only on the profits, if you even have it.
| opportune wrote:
| By keeping your stocks you lost your money to inflation
| too, and then another 20+% because you held through a
| bubble pop.
|
| I think a lot of the personal finance investing advice
| given to people in the vein of "solid advice for 90% of
| people to follow without too much expertise" is becoming
| some weird dogmatic religion. You must never time the
| market (even at a loose monetary policy induced bubble),
| you must always hold total market/sp500 ETFs (even when
| they're filled with overpriced companies), you should
| diversify into bonds (the most garbage asset class
| available for the past 20 years, until the last 6 months,
| when they became only partially garbage).
|
| This advice has gone from being labeled as generalist
| advice with asterisks, through many rounds of telephone, to
| now being something that invites angry replies if you
| disagree with it.
| throw0101c wrote:
| > _By keeping your stocks you lost your money to
| inflation too, and then another 20+% because you held
| through a bubble pop._
|
| By holding stocks and not selling _you have lost nothing_
| :
|
| * https://awealthofcommonsense.com/2014/02/worlds-worst-
| market...
|
| "Losses" only occur when you lock them in. If your
| trading account is down now you have lost nothing--just
| like you haven't made money until you sell your holdings
| for cash.
|
| *
| https://www.investopedia.com/terms/c/crystallization.asp
| esalman wrote:
| Any advice for those who are retiring?
| TimBurman wrote:
| The money is gone but you have a lot of qualities, you can learn
| from this valuable lesson and do better in the future. For
| example, I know someone who buys companies that have 20 years of
| consistent profits. He is down 9% this year, but fell far behind
| people who were making money from technology stocks in the boom
| times. He only looks at his stocks every 3 months and worries
| about nothing.
|
| In one of the Market Wizards books, an investor said that if he
| cannot sleep from worrying about his positions, he sells them
| until he is comfortable.
|
| If your company is granting you call options, all your new ones
| will be at lower prices and they may even lower the strike prices
| on the old ones to retain good employees. Try to get investments
| that are not correlated with the success of your company or
| industry or where you own property.
|
| The boss that hired me 15 years ago told me to save 20% of my
| take home income and invest it in quality companies with
| consistent earnings. He later retired at 55. Cut your costs, pay
| off your debts and lower your personal overhead, so that you are
| more resilient if you have to switch jobs or earn less money.
|
| Timing the market over the long term is very difficult and it is
| better to assume you cannot. It has been known for decades that
| if you miss a couple dozen up days because you were flat or short
| the market, your returns over decades are much lower.
| https://www.marketwatch.com/story/how-missing-out-on-25-days...
|
| If you are going to buy stocks or an index like the S&P 500, take
| a look at 50 years of data and see how bad the top 10 declines
| were and how long it took for those investments to reach new
| highs. The stocks I own have gone down 50% previously and I
| assume they could top that with a 60-70% decline. The worst time
| it took almost 3 years to get back to new highs. Once you know
| that about your investments, you can rest easier.
|
| Look for chances to buy quality companies so you do well when
| profits improve. You have all your valuable skills, you know more
| now and will do better in the future.
| jjav wrote:
| Without any context on the poster (age, net worth, career status,
| etc) it's not possible to say anything concrete.
|
| So I'll just speculate. Perhaps the poster is young enough to
| have entered professsional life after the 2008 crash. If so, they
| have only experienced a bull market going mostly only up with
| minor blips. But that's not normal, markets also crash and also
| sometimes meander down for a long while. Don't ever be invested
| in a way that such an event will be catastrophic to you.
|
| The dot.com crash turned my ~$1M into about 20K. At least they
| were options, so wasn't money I really ever had in my hand, but
| it was still a bummer.
| bartimus wrote:
| There's nothing wrong with the markets being down. It means the
| dollar is up? It's perhaps a good time to buy. The problem is
| with your bets being wrong.
| netsharc wrote:
| This was in the NPR recently [1]. It has a good perspective: just
| like jump ups in your portfolio aren't worth anything until you
| cash out, drops aren't losses until you cash out.
|
| Or the Warren Buffett philosophy[2] is, don't make a number be
| the source of your happiness or sadness. Play with your kids,
| enjoy life, even if that number is horrible, will you be fine?
| Probably yes...
|
| [1] https://www.npr.org/2022/09/28/1125656030/the-markets-are-
| do... [2] https://www.cnbc.com/2018/03/20/warren-buffett-
| doubling-your...
| dev_0 wrote:
| Most of my stocks are down 50 to 80%
| wheresvic5 wrote:
| If you speculate, you need to be ready for such massive swings. I
| just drip buy/sell as the market goes down/up.
| f0e4c2f7 wrote:
| I suggest reading a really good book, or if you're feeling
| ambitious perhaps you could start writing a really good one.
| Tempest1981 wrote:
| Really enjoyed "Project Hail Mary". Took my mind away from
| Earth.
| car wrote:
| I recently finished ,,The Song of Achilles". Beautifully
| written and riveting.
| mintaka5 wrote:
| that's the name of the game =) buckle up, kiddo! we're in for a
| fun ride ;)
| czbond wrote:
| I don't know why you're being downvoted - you're just being a
| realist.
| MerelyMortal wrote:
| Because the comment itself doesn't add any value?
| hey2022 wrote:
| - Please help me, I am struggling emotionally
|
| - Buckle up my dude lol
| dev_0 wrote:
| Good or bad?
| paulcole wrote:
| Yes
| JonChesterfield wrote:
| Good time to buy. 90% loss seems severe, possibly also good time
| to change employer (which is also essentially buying the dip -
| you get $N of RSU at the low valuation)
| dadoge wrote:
| Careful.
|
| That 90% could lead to a bankruptcy soon.
|
| Changing employers might still mean a big drop in stock from
| when you start. Unemployment still hasn't ticked down, the Fed
| is not done with its job of squashing inflation.
|
| Good companies are giving solid refreshers to ensure you are
| paid more fairly moving forward. See if your company will do
| that, it's sorta the same as getting a new offer elsewhere. If
| your current company won't do that, that is a bad sign they are
| worried about bankruptcy and you should indeed leave.
| sokoloff wrote:
| A company worried about bankruptcy wouldn't seem overly
| worried about issuing new options (which will become
| worthless if bankruptcy happens, so cost nothing but some
| paperwork).
|
| There are many good reasons to leave a company whose
| performance is declining and where your compensation is cut
| to well below what you can make elsewhere, of course.
| [deleted]
| xwdv wrote:
| If you are young enough you can expect this same thing to happen
| several times throughout your life. Will you feel the same every
| time?
| jcadam wrote:
| Well, I got laid off this week, so I win.
| thanatos519 wrote:
| I'm sorry to hear that you're having such a bad time at the
| casino.
| vogt wrote:
| I've never had stock options in the first place if that makes you
| feel any better.
| hatware wrote:
| Learn from your mistakes.
| iancmceachern wrote:
| Perspective. Rather than spend the day looking at your portfolio,
| go outside, take a drive, amd volunteer or even just have a few
| conversations with those less fortunate than you. Folks that
| don't have investments, 401ks, but are still beautiful humans.
| Perspective will help you tp see what you have, not the small
| percentage you are loosing.
| bluGill wrote:
| Fidelity did a survey of thier customers whose 401k did the best
| over the years. The most popular response (about 1/3) was 'I
| don't have a 401k at fidelity'. They had forgotten about it and
| left it alone to grow through good and bad. If you know how your
| investments are doing you know too much
| baron816 wrote:
| Dead people's portfolios also tend to perform really well.
| omreaderhn wrote:
| This mentality worked for the past 40 years but it won't work
| for the next 40 years.
| wholinator2 wrote:
| Why
| throw0101c wrote:
| > _Fidelity did a survey_
|
| [citation needed]
|
| This is an urban legend from what I recall. (But not touching
| your investments is generally a good idea.)
| O__________O wrote:
| Citation:
|
| https://www.businessinsider.com/forgetful-investors-
| performe...
| senko wrote:
| That citation is an unverifiable retelling of a supposed
| anecdote:
|
| > one anecdote from an employee who recently joined his
| firm
|
| That page seems to be the only piece on the internet that
| contains this claim.
|
| If I had a dime for every "true anecdote" told by a thought
| leader or a consultant, I wouldn't need a 401k.
| throw0101c wrote:
| An article from 2015:
|
| > _Well, maybe. My Fidelity contact has not heard of such a
| thing, nor has Morningstar 's Fidelity Canada contact.
| Suffice it to say that none of these citations came linked
| to the original source. (Such is the Internet.)_
|
| * https://www.morningstar.com/articles/964493/from-the-
| archive...
|
| Unless the citation has fidelity.com in the link (or an
| archive.org snapshot of said link), I'm calling urban
| legend.
| O__________O wrote:
| I mean, simple Google produced result I shared, which you
| might have easily cited to in your original request and
| added the clarification you just added, but you didn't do
| that.
|
| Or strange thought, you could contact Fidelity and ask
| them yourself -- and if it is urban legend, let them
| know, and suggest them survey their records and see if
| legend is true -- since for sure mainstream media would
| cover it and given current economy likely be good for
| business too.
|
| Mean time, no shortage of research on the topic:
|
| https://scholar.google.com/scholar?hl=en&as_sdt=0%2C21&q=
| Dol...
| [deleted]
| Aulig wrote:
| Your first and second sentence made me laugh out loud because I
| thought it was a joke. The explanation makes perfect sense
| though - buy and hold beats the average attempt at market
| timing.
| Ekaros wrote:
| Let's see where things go... Past performance is not
| indicator of future performance.
| cameronh90 wrote:
| Time in the market beats timing the market.
| nathias wrote:
| first time? don't worry it's only money
| yrgulation wrote:
| I will never forget the words of a previous tenant of mine. The
| profile is silicon valley worker, remote outside the us due to
| the pandemic, total "comp" 500k: "i dont invest in real estate
| because its too much hassle and i made my money on the stock
| market with shares earned from my employer". Fast forward to the
| onset of the market crash, my real estate sold, his "portfolio"
| down one million. I feel sorry for him but i am glad i went the
| only way that can't fail (unless there's excessive taxation):
| real estate. You dont get rich but boy am i doing fine.
|
| Getting back to your question, i'd wait it out. Markets go up and
| down all the time.
| cloudking wrote:
| Be aware that:
|
| 1) we're likely in a declining/sideways market for at least
| another year until inflation subsides, possibly longer
|
| 2) the Fed has most of the control over the inflation/deflation
| levers (on demand side)
|
| 3) markets will most likely recover over the long term,
| historically speaking
|
| The Fed is purposefully reducing their asset holdings and
| increasing interest rates to slow down demand, which in theory
| should cool inflation. Once the economy cools enough, they will
| "flip the switch" back on to supporting markets by reducing
| interest rates, at which point #3 should begin. Educate yourself
| on the Fed and their impact on markets.
|
| So if you sell at the lows, you're accepting the losses, can move
| on and invest again later. If you can afford to hold through this
| bear market, you may recover some of your losses on a longer
| timeframe. You can also position your portfolio with some
| downside protection (e.g long dated put options on indexes,
| selling covered calls on your stocks etc) to reduce the pain, you
| don't have to just watch your portfolio decline.
| bluquark wrote:
| I agree with most of this, but note that stock prices don't
| track real-world events as closely as you're suggesting.
| They're based on competing predictions of the future. The
| market will (or has already) hit bottom when the average
| prediction starts being less pessimistic, not when inflation
| actually subsides or the Fed actually lowers rates.
|
| The defining feature of bear markets is not direction, but high
| volatility -- they look like a random walk without a clear
| upper or lower bound.
| cloudking wrote:
| Yes predictions are a part of stock prices, but the price
| ultimately comes from supply and demand. If there are more
| people that want to buy the stock (demand), than people
| selling (supply) then the price goes up. In this environment
| where inflation is everywhere and it costs more to borrow
| money, demand has come down and will likely not return until
| the Fed switches their policy stance. At least for US
| markets.
| ekelsen wrote:
| "markets will most likely recover over the long term,
| historically speaking"
|
| tell that to the Nikkei index. At this point you'll have been
| waiting 40 years for the recovery.
|
| https://www.macrotrends.net/2593/nikkei-225-index-historical...
| cloudking wrote:
| Fair point, my comment is centered around the US markets, I
| should have clarified that.
| kqr wrote:
| A different take on the same thing: the best models we have
| of the risk-free returns of equity markets are unbiased
| random walks, or martingales. Whatever value the index is at
| now is the best guess at what value it will be in the future,
| at least when absolute polynomial loss is the error function.
| mypastself wrote:
| Does this statement hold true when accounting for total
| returns, including dividends?
| causi wrote:
| _1) we 're likely in a declining/sideways market for at least
| another year until inflation subsides_
|
| Gonna be a lot longer than that, at least as far as inflation
| goes. Q3 2022 is the median date for retirement of the largest
| generation, the Boomers. When they retire they take their
| capital with them. Expect the cost of capital triple for at
| least the next decade.
| TechnicolorByte wrote:
| Can you expand on this? What do you mean when you say that
| the cost of capital will triple over the next decade?
| prottog wrote:
| They probably mean that prevailing interest rates will
| triple.
| causi wrote:
| The US population pyramid is no longer a pyramid, and
| neither are those of most of the rest of the world. Not
| having to pay to raise a larger generation created a golden
| age that's lasted thirty years. It's now time to pay the
| piper.
|
| https://i.imgur.com/iUYcuTQ.png
| chrchang523 wrote:
| This model is not consistent with what we've seen in
| Japan over the past several decades.
| edgyquant wrote:
| Most people will have their capital in accounts the rebalance
| towards bonds on a yearly basis. They aren't going to be just
| pulling a ton of acapital out of the market to live off of
| quintushoratius wrote:
| > Q3 2022 is the median date for retirement of the largest
| generation, the Boomers.
|
| Just to nitpick: the largest generation is the millennials,
| not the boomers.
|
| https://www.statista.com/statistics/797321/us-population-
| by-...
| dev_0 wrote:
| This time seems different with China and Russia making
| political shift
| sicp-enjoyer wrote:
| There is always a reason to think it's different this time.
| tjs8rj wrote:
| Investments doing so well these last 40 years is the
| unusual part. Vast majority of the gains in the stock
| market over its history happened from 1977-2007.
| paganel wrote:
| The FTSE 100 is almost at the same level as in 2014,
| those betting that the S&P 500 will always be different
| than the rest of the exchanges/indeces might be in for a
| nasty surprise.
| hanoz wrote:
| _> The FTSE 100 is almost at the same level as in 2014_
|
| The FTSE 100 is currently at almost exactly the same
| level as it was on New Year's Eve December 1999!
| somenameforme wrote:
| I'd also add to this point:
| https://wtfhappenedin1971.com/
|
| The implied causation :
| https://en.wikipedia.org/wiki/Bretton_Woods_system
|
| Bretton Woods was a defacto global* monetary system with
| other currencies tied to the dollar, and the dollar
| convertible to gold at a fixed rate. Nixon ended it in
| 1971, at which point the government was unconstrained by
| any external forces when determining economic policy. The
| debt to GDP ratio in 1971 was about 35% and declining.
| Today it's 122%. Even before COVID it was 105% and
| rising.
|
| If this is not sustainable, then there will be a
| generation which will simultaneously be the last to
| benefit and first to suffer for this.
| dev_0 wrote:
| Read Nassim Taleb books. No guarantee that history will
| repeat itself
| sicp-enjoyer wrote:
| If that period really was remarkable, I think the outcome
| of a worse period is just lower expected returns, not the
| end of the world. Japan is often used as an example. But,
| if you invested regularly in Japanese stocks over that
| period of stagnation, I think with dividends its still a
| fine investment.
| ThrowawayTestr wrote:
| You only lose if you sell.
| YZF wrote:
| That's not true. As a counter-example, I held shared of GM to
| the point it went bankrupt in 2009, I lost all my shares and
| got left with _zero_.
| mynameishere wrote:
| Options have this thing called "time value", so you lose just
| by nothing happening.
|
| It's unclear if OP is getting options as part of his
| remuneration or if he is gambling, so impossible to advise. If
| he is gambling, he should just stop.
| pseudoramble wrote:
| My perspective is a bit different since I don't have stock
| options, just plain retirement and such. So, take this with that
| in mind.
|
| I would recommend giving yourself a break from following it. My
| reasons for not looking are these: Values of assets change a ton
| day-to-day, and a year or two from now who knows what it will
| look like! I also don't have any control over prices. I could
| shuffle assets around, but again I don't know what will happen a
| few years from now. So, I don't gain much by looking at the
| numbers often.
|
| Sorry it's a stressful sad time for you though. It does suck!
| gtirloni wrote:
| Same advice. Unless you're a day trader, just pick strong
| assets and look at them once in a while. You'll get sick if you
| keep reacting to the fluctuations every day.
| greymalik wrote:
| Since the GP talks about stock options I'm guessing these are
| part of their total compensation and not a discretionary
| investment. I'm in a similar boat - stock is about 50% of my
| total compensation but its value has dropped by 90%. It's
| hard to be blase about losing almost half my income.
| bluGill wrote:
| Unless you are aiming for the C suite you should NEVER have
| any company stock as that is putting too many eggs in one
| basket. If you have all your eggs in one basket you better
| watch that basket on a level that only C suite people have
| access to. (I'm not sure if they do,but at least they can
| unlike those below)
| spacemadness wrote:
| Many developers have a decent chunk of their total
| compensation in RSUs these days.
| jmathai wrote:
| In this case, you don't have much choice if company stock
| makes up a large portion of your income. You can sell
| immediately but the money you receive from that
| transaction is much less - it's lowered income even if
| you immediately diversify.
| gtirloni wrote:
| I don't understand how someone can tie 50% of their income
| to a highly volatile asset. But thanks for the perspective.
| greymalik wrote:
| That's how my employer and many other large tech
| companies structure compensation.
| writeinpencils wrote:
| This is something covered very well by Taleb in "Fooled By
| Randomness." Simply by exposing yourself to random fluctuations
| on a shorter cadence, you are experiencing stress reactions
| that would never occur if you checked it on a less frequent
| cadence. Anyone who has played fantasy football will be
| familiar with this. If you check your players' scores every
| five minutes, it is infinitely more stressful than just
| checking them once on Monday morning.
| kqr wrote:
| Also why defaulting to hooking up mothers in labour to
| continuous monitoring is a bad idea. Better, unless something
| else is medically called for, to check in at sparser
| intervals instead.
|
| Also a good reason not to get these "breathing monitors" for
| infants, again, unless medically indicated.
| wpietri wrote:
| Exactly the book I came here to mention.
|
| I used to write software for financial traders, so I know
| it's possible to make money by following second-to-second
| shifts in the market. But it's a zero-sum game, and I saw our
| traders take a lot of money from people who were responding
| to second-to-second shifts in the market.
|
| These days I put my money in long-term investments and then
| look at them every few years. The other day I saw mention of
| the big market price jumps. I thought, "maybe now's the time
| to rebalance things?" And then I sat very still until the
| urge passed, because reacting to headline news strikes me as
| a great way to lose money.
| jeremyt wrote:
| Sorry that this happened. You're not alone feeling this way.
|
| I have lost about 95% of my liquid net worth this year, due to
| hubris, basically. The first half of 2022 for me was waking up
| every morning and feeling like puking a little as I get more
| under water, closer to that margin call, plunging through my
| stops.
|
| After almost a year of this, I have found a perspective that is
| helpful for me and may be helpful for you.
|
| It is my firm belief that you are meant to learn certain things
| in life, and your subconscious very carefully and meticulously
| arranges your life circumstances to learn these things. This is
| why you often find yourself shaking your head and saying "I got
| myself into this".
|
| It may be different for you, but I have realized that the thing I
| needed to learn is that my net worth is not my self-worth. I
| realized that I've desperately been trying to make money my whole
| life so that people will like me and I can avoid the pain that I
| saw caused by poverty when I grew up.
|
| I have been blessed to have money and realize that neither one of
| those things are true, and then I guess I have been blessed to be
| tested on what I learned the first time around by losing it.
|
| I have also come to realize that I don't need all that much money
| to live a comfortable life.
|
| These are the things that I learned. They may not be what you are
| intended to learn.
|
| So, take it easy on yourself. What happened may have been
| completely out of your control, or it might have been something
| that you contributed to. Either way, it's done.
|
| Take some time to feel shitty, because you will, but consider
| changing perspectives and start looking at what you can learn
| from this and maybe even what opportunities have opened up
| because of it.
| thehappypm wrote:
| What was your motivation to invest in such a way that 95% loss
| was even possible?
| actionablefiber wrote:
| Probably to make money? GP mentions margin calls, which
| suggests they're investing with leverage.
| thehappypm wrote:
| Sounds a lot like gambling.
| nurettin wrote:
| When you step out of the door, that is gambling. If you
| choose to stay inside, that also is gambling. You are a
| gambler.
| User23 wrote:
| The everything bubble gave a lot of people the mistaken
| impression that they were genius tier investors. I know I
| personally spent a lot of emotional energy on checking my own
| ego.
| jmathai wrote:
| I'm involved in a few personal finance communities and this
| is very true. I especially see it in people who are in
| their 20s or 30s and started investing after the US
| subprime crash.
| jeremyt wrote:
| To make money, why else? Look folks, this wasn't my
| retirement money, it was money I didn't particularly need and
| had no idea what to do with.
|
| It always worked for me before. My investing history is a
| long string of huge successes beginning in 2014.
|
| I've always invested in companies I believed in and that had
| solid fundamentals.
|
| It appears the market doesn't give a shit about company
| fundamentals right now. Most small growth companies are down
| ~80%. The two companies I lost everything in are currently
| priced below liquidation value.
|
| Yeah, I bought on margin, so that gave me 2x leverage, so if
| it goes down 50% you get margin called.
|
| Like I said. I have learned lots.
| matheusmoreira wrote:
| > It appears the market doesn't give a shit about company
| fundamentals right now.
|
| I don't think it ever did. I think it's all about the free
| money pouring into the economy due to low interest rates
| set by the federal reserve. They turned off that tap, the
| flow stopped and the economy screeched into a halt.
| noloblo wrote:
| which companies @jeremyt are marked below liquidation value
| sillysaurusx wrote:
| For what it's worth, you can convert your losses into a few
| thousand upvotes on https://reddit.com/r/wallstreetbets
| jeremyt wrote:
| I know you're joking, but as much as i've learned that my
| self worth doesn't come from making money, it doesn't
| come from bragging about losing it either :)
| noloblo wrote:
| It is my firm belief that you are meant to learn certain
| things in life, and your subconscious very carefully and
| meticulously arranges your life circumstances to learn
| these things. This is why you often find yourself shaking
| your head and saying "I got myself into this".
|
| @jeremyt care to elaborate on this thesis and wondering
| how you came to this conclusion, was it a self journey
| jeremyt wrote:
| I was attempting to keep religion out of it, but this is
| the Buddhist worldview.
|
| I believe that my soul chose this life to learn what I'm
| learning. And whether I'm conscious of it or not, the
| "higher self" part of me hangs around in the background
| to ensure that I learn what I need to. This isn't
| typically what one would expect from what other religions
| would call a "guardian angel", but that's kind of how I
| see it.
|
| Like, sometimes I can't take losses. That's deep family
| karma from being afraid of being poor. However, being
| unable to take losses means that you make poor decisions.
| Not being able to make good financial decisions makes
| people poor, and just continues the intergenerational
| cycle of poverty.
|
| So, my unconscious "higher self" carefully arranges
| events such that I encounter maximum pain for going along
| with this karmic thing I'm supposed to transcend. The
| pain facilitates the learning, and thus the freedom from
| the karma.
|
| Ultimately, the point of existence is to experience
| everything that can be experienced in every lifetime and
| learn everything that can be learned, resulting in
| ultimate freedom from karma and liberation from the cycle
| of birth and death.
|
| Or, you can just meditate a lot, and I guess I'm working
| on that.
| extragood wrote:
| I'm not spiritual at all, but I did resonate with the
| Buddhist principle to acknowledge your emotions, rather
| than to react (or avoid) them. Something I'm trying to
| apply in my own life.
| mikestew wrote:
| _Like I said. I have learned lots._
|
| And as long as you truly learned things, and apply them
| later[0], then it is not money wasted. I graduated from
| Wall Street University about fifteen years ago, and paid
| some steep tuition fees, but I came out a better investor
| for it with consistent returns. (For clarity, WSU is not a
| real university, but a metaphor for "blew a lot of money in
| the stock market".) Take those lessons learned, and go make
| even more than you originally lost.
|
| [0] Examples including, keeping emotions in check or out of
| the decision-making process, disciplined stop
| limits/losses, and, umm, staying away from margin unless
| you have reasons beyond "margin let's me buy more shares".
| But these are my personal examples, go find your own. :-)
| kqr wrote:
| > To make money
|
| Strategies that result in 95 % drawdowns are not in the
| "making you money" bucket.
|
| Since growth is compounding[1], the most important property
| of a money-making strategy is to keep drawdowns at at
| optimal level. This optimal level is a thrill ride on its
| own, but 95 % is plain overbetting and will never make you
| money in the long run.
|
| ----
|
| [1]: If you draw down from 100 to 10, it takes as long to
| go back to 100 as it would have taken to go to 800 had you
| only drawn to 80.
| doovd wrote:
| > Strategies that result in 95 % drawdowns are not in the
| "making you money" bucket.
|
| As long as you're betting with +ev after fees are taken
| into account then they certainly can make you money. Low
| sharpe / high vol != unprofitable.
| kqr wrote:
| This is correct only if you look at single bets in
| isolation, or at bets small enough that you can actually
| make so many of them you get the EV in the end.
|
| Once you look at a long sequence of large bets (where 95
| % drawdown absolutely indicates a large bet), you'll find
| that those where big drawdown can happen grow slower
| because a big drawdown simply sets you back too far. It's
| worth earning a little less for each bet if none will
| cost you a huge loss.
| baby wrote:
| Same here. My biggest bets were facebook, uber, and
| netflix, and they went down the most. Still, I still think
| that there's no way these companies won't continue their
| growth so I refuse to sell.
| armitron wrote:
| I'd sell all of these without thinking twice.
| Ntrails wrote:
| I would not call any of those growth at this point, nor
| are they companies with strong fundamentals.
|
| Like, just my pov - but their years of growth are done
| and the competition is in.
| reducesuffering wrote:
| Facebook has 14% YoY growth, P/S of 3, P/E of 10.6, with
| 80.5% gross margins. If those don't sound like strong
| fundamentals, let me know what companies have better
| metrics, I'd actually be interested...
| Mikeb85 wrote:
| > It appears the market doesn't give a shit about company
| fundamentals right now.
|
| Fundamentals have never mattered all that much. Stock
| prices are based on demand for the stock itself, which is
| largely dependent on economic conditions. When the Fed was
| increasing the money supply a lot of that excess pumped up
| stocks because there was nowhere else for it to go, now
| that money is drying up causing the market correction.
| alar44 wrote:
| Wait, you're telling me you did well during the longest
| bull run ever? During 2014-2021 you literally couldn't
| lose.
| hawkeye224 wrote:
| "Everyone is a genius in a bull market".. and we had one
| of the longer (and most artificially propped up) ones
| YZF wrote:
| Sorry to hear about your losses and this might sound like
| lecturing but I think it's worth saying.
|
| What price did you pay for those businesses? When you say
| they had solid fundamentals what does that mean? A pretty
| common mistake is to overpay for a business with good
| potential. Unless you have some unique insight everyone
| already knows the business has potential and it's priced
| that way. The market as a whole had crazy crazy multiples
| which means it was overpriced even including the growth
| prospects. Sure, if you think Tesla can get to a point
| where it's selling all the cars in the world then you
| definitely should buy that stock at the price it was
| trading at.
|
| Overpaying on margin is just compounding your problems. I
| never ever buy stocks on margin (and generally I avoid
| borrowing money for anything but the most solid investment,
| like buying a house). You have to _always_ think about the
| worse case scenario and be willing to live with it.
| Ofcourse gambling a lot of money can lead to making a lot
| of money- it 's just that the expected value is negative.
|
| The other thing you always need to consider is how the
| company you're investing in will perform in an economic
| downturn. Recessions aren't an if, they're a when. There's
| a certain chance of recession every year. If you believe
| the company has strong enough fundamentals to survive a
| recession and strong enough management/leadership to steer
| it through difficult times then just hold on. Presumably
| you have a mix of those so on the aggregate you should do
| ok. If these great companies are below book price then
| double down on them but keep in mind the market is
| disagreeing with your evaluation. Otherwise you've
| miscalculated the expected value of your investments i.e.
| your belief in the companies and their fundamentals was
| incorrect.
| xvilka wrote:
| > I realized that I've desperately been trying to make money my
| whole life so that people will like me
|
| Money themselves have zero value and certainly shouldn't be
| viewed from that perspective. Their only value as a tool to get
| things done or buy something. Nothing more.
| chatterhead wrote:
| This is insightful and self-reflecting. Thanks for sharing it.
| pavlov wrote:
| _> "I have realized that the thing I needed to learn is that my
| net worth is not my self-worth."_
|
| This is a really important point. I'm not a native English
| speaker. When I first heard an American use the expression
| "he's worth X dollars", it felt extremely wrong. Someone's
| worth should never be attached to a dollar value!
|
| I've got used to it by now, but I still wish Americans would
| come up with a more constructive way of talking about wealth
| than "personal worth."
| bryanlarsen wrote:
| Are you in Europe or the States? The two areas have vastly
| different economic outlooks.
|
| The outlook in the US can best be described as "uncertain".
| Valuations are down because the market doesn't like uncertainty,
| but it doesn't necessarily translate into a future recession --
| many of the economic indicators in the US are very positive.
|
| OTOH, Europe is facing a hard winter unless an energy miracle
| appears.
|
| The market is down 20% on the year, so that means that a lot of
| people are underwater on their options, so that the fact that
| yours still has some value means that you are doing better than
| many.
| dazsnow wrote:
| because those are the only 2 places in the world people could
| possibly be
| TheCraiggers wrote:
| At no point did the parent allude that. Perhaps the poster
| just doesn't have insight into every economy on the planet
| and didn't want to give nonfactual info.
| septillianator wrote:
| What are you referring to as being positive? .i.e. nonfarm
| payroll growth is not good at this point.
| bryanlarsen wrote:
| Huh? nonfarm payroll growth is up 263,000 in September.
|
| The most predictive indicator is the unemployment ratio, and
| it's very low right now.
|
| Perhaps inflation is a better predictive indicator, but we
| really don't know since we haven't had any for ~40 years. As
| I said, it's the uncertainty depressing markets IMO, not
| necessarily the outlook.
| _heimdall wrote:
| Unemployment really needs to be paired with the Labor Force
| Participation Rate. Unemployment is low, but LFPR is down
| as well. 10 years ago it hovered steadily around 63.5-64%.
| The pandemic crushed it, but we're still only back up to
| around 62.5%.
|
| That's a lot of people not working that simply aren't in
| the market anymore, unemployment would look a lot worse if
| they were included.
| bryanlarsen wrote:
| LFPR is above the level it was pre-pandemic. Immigration
| is the best way of driving up the LFPR, but that was
| essentially nil during the pandemic and is still way
| down. Combine that with the aging population, and a
| slight increase in LFPR over the last 3 years is much
| better than could be expected.
| [deleted]
| StopTheWorld wrote:
| In January 2021 the market seemed overheated so I mostly cashed
| out, and sold a lot of my 401K stock, putting it into safer
| assets.
|
| From May to September as tech indexes got cheaper I began buying
| them up in my rollover IRA. Two and a half weeks ago I started
| loading up on tech indexes with my spare liquid assets - I am
| down about 2.3% on that right now.
|
| I still have some spare liquid assets, but it's easily possible
| the market can go down more. IYW is down over 35% YTD, IGV is
| down 34.71% YTD. Then again, if conditions are rosy, you're not
| going to get to buy Google, Salesforce etc. at such discounts off
| their highs.
|
| The price of tech stocks has been too high for me for a long
| time, so I have had a lot of cash. The past two and a half weeks
| I piled most of my spare liquid cash into the market. I still
| have a little bit more I can put in, but more than that and I
| start tapping into my rainy day fund. Any how, I don't think I
| would buy more on a small dip at this point, it would have to be
| a bigger dip for me to buy more tech indexes now.
|
| I don't even like buying stocks, but it's hard to resist buying
| the tech stocks at such a discount off their peak at the end of
| last year.
| bwb wrote:
| Timing the market is luck :)
|
| If you want to be wealthy stay in it and wait 30, 40, or 50
| years. It isn't a get rich quick scheme.
| llampx wrote:
| Such a dogma...
| sgtnoodle wrote:
| It sounds like their timing isn't bad, though.
| augasur wrote:
| As there is one good saying in investors community: Time in
| the market beats timing the market.
| rvz wrote:
| You are right, it was indeed getting quite overhyped and
| extremely euphoric in both the stock market (and crypto). I
| quite frankly saw it coming months ago. [0]
|
| It just had to end very quickly with a market crash after all
| what happened in the last two years.
|
| [0] https://news.ycombinator.com/item?id=29508238
| rsweeney21 wrote:
| A similar thing happened at Netflix in 2011. My coworker kept
| buying options and I stopped. His stock grew to $34M. Mine
| recovered to six figures.
|
| If you can buy more, and you have confidence in the company,
| that's what I would do.
| czbond wrote:
| In the markets, the hardest thing to mentally is usually the
| correct one over time. The markets goal is to trick everyone -
| so you have to be strategically, but intelligently, able to
| craft contrarian perspectives.
| ISL wrote:
| Markets don't have a goal. They just don't care.
| czbond wrote:
| "Markets" don't, but the market makers do. And that is to
| take all your cash while making you think you are making
| sound decisions.
| omreaderhn wrote:
| The Federal Reserve launched Operation Twist on September 21,
| 2011.
|
| It's only wise to buy stocks when the Federal Reserve is
| printing money or you know that they will print money.
| [deleted]
| pclmulqdq wrote:
| Remember that the only number that really matters in terms of
| your bank account is 0. As long as you can hold off 0, you are
| doing fine. A lot of other people are in the same boat.
|
| Otherwise, you don't need to look at the value of your options.
| atemerev wrote:
| According to the Buddhist doctrine, thinking of temporal things
| as if they were permanent is the chief source of human suffering.
| Certainly it does apply to economic growth.
| Lionga wrote:
| Everything is temporal so the conclusion is to not think at
| all?
| thenerdhead wrote:
| You live on. This won't be the first nor the last time it will
| happen.
|
| This time will prepare you for the next one where you can buy at
| a discount to build wealth faster.
| redleggedfrog wrote:
| 1st world problems, man. Go volunteer at a soup kitchen to get
| some perspective. Also scientifically proven to lift your
| spirits.
| rufus_foreman wrote:
| Going shopping at Walmart works too.
| ethotool wrote:
| As long as you don't sell you haven't lost. Could recover in the
| next 2-3 years. Stock market is a risky investment. Own it and
| move on. Take responsibility for it and don't feel bad. Brush it
| off as a loss. It is what it is - you took a risk at the end of
| the day.
| jpswade wrote:
| There's only two prices to worry about, the price you buy and the
| price you sell.
|
| In times of economic downturn there's opportunity. That's
| exciting.
| francisofascii wrote:
| So sorry this happened. Can't help you feel better other than to
| say you are not alone. I didn't suffer as much as you. I went
| more conservative, or so I thought, and went heavy into bonds,
| which most 30% over the past year. I guess the moral of the story
| is stay diversified, and if every asset class goes down, well, we
| all lose together. Misery loves company.
| karaterobot wrote:
| Stop watching the markets, stop reading the news, do something
| fun and engaging. This is the best advice you'll get (which is
| why so many people are giving it). If you're serious about
| feeling better, please take this advice.
| mellosouls wrote:
| Markets go down and up. Your money isn't real till you cash it
| out, and it's unhealthy to let short term changes in headline
| numbers control your emotional reaction - positive or negative.
|
| Your focus on the short term is causing the issue here, so try to
| move on from that.
| smileysteve wrote:
| Diversify asset classes. When you do have the chance to exercise
| stock options, do - to a basket of stocks (like a total market
| ETF) and other assets (such as bonds, cds, notes).
| roenxi wrote:
| What does deal with mean here? Deal with as in how to...
|
| ... recognise and learn from the mistakes in your investing
| strategy?
|
| ... reorganise a life based on having less money?
|
| ... deal with the emotional turmoil of losing lots of money?
|
| ... deal with the emotional turmoil of uncertainty?
|
| ... cope with facing an imminent retirement where you don't have
| the funds to live comfortably?
|
| This post isn't really answerable because it is too vague. Even
| as a comment on hard times, there isn't much to go on here.
| H8crilA wrote:
| If you bought options your base case should be that they expire
| worthless, except some very special cases. If you sold options
| your likely case should be extreme loss, exceeding the premium in
| double digit multiples.
|
| If you don't know this then you shouldn't have traded, and were
| misinformed. They're considered complex instruments for a reason,
| and the ease with which the masses trade them is something of a
| tragedy.
|
| This has happened multiple times in the past and will happen many
| times again, as there's nothing new under the sun (from
| Livermore, one of the greatest speculators).
|
| A fun little book that I like to recommend: "Confusion of
| confusions". It was written by a Jewish trader working with the
| 1600s Amsterdam stock and bond exchanges. It is a good proof of
| how little things have changed, you'll understand pretty much
| everything once you map the terms and concepts to their modern
| equivalents.
| sokoloff wrote:
| In context, I'd assume OP's options were employer-granted
| options being far more likely than they were speculating on
| public market options.
| tharkun__ wrote:
| In which case - and sorry for not having any consoling words
| here for the OP here - I can unfortunately not really have
| much empathy here. An overwhelming majority of people
| especially here on HN laugh at you if you discount variable
| aspects of renumeration. Employer issued options or RSUs are
| down 90%? So what! You accepted a variable renumeration
| scheme. You knew ahead of time. You are no longer making 200k
| base + 200k in options/RSUs that you expected to actually
| yield you 500k in value for doing nothing? Well that's the
| deal you took.
|
| EDIT: From the down voters I would appreciate some
| substantiated reply as to why this isn't true. Don't get me
| wrong, if I had taken such a deal and was now under I'd be
| miserable as well, especially if I counted on that money and
| maybe bought something on credit expecting a windfall later.
| Such as getting a huge mortgage I thought I'd be able to pay
| off very fast soon. I took the opposite deal. I rejected
| offers that wanted to give me a lot of variable renumeration
| and a small base salary and was laughed out of the room.
| tjr225 wrote:
| This was the general sentiment here 8 years ago and I've
| always trusted it. As such my various equities have always
| been treated as "funny money." If it works out, great- but
| I don't count on them.
|
| If that sentiment has somehow reversed... well, you picked
| a bad time to do so!
| svnt wrote:
| I'd hazard a guess that you're being downvoted because of
| your lack of empathy, which is the point of the post, but
| also because of your gotcha position around variable comp.
|
| If you work for a startup and reject variable comp, you are
| wasting your time. Go get a safer, easier, better-salaried
| position.
|
| If you aren't working for a startup, you're in no position
| to comment on the validity of the approach people take
| there working with variable comp.
|
| You just walked into a funeral for people who got hit by a
| train and said "what's the big deal? I never cross train
| tracks, they're too risky."
| tharkun__ wrote:
| We don't know about the OP. He didn't say what his
| situation was. For the hypothetical situation of my
| parent my stance stays even if voted into oblivion. And I
| knew it would likely happen given the overall sentiment
| on HN. Like with variable renumeration itself knew what I
| was getting into. FWIW I have a variable mortgage and I
| knew what might happen and is now happening and that is
| why I didn't buy at the top of what the bank would give
| me.
|
| If you work for a startup, like you say, there's usually
| no option to get more base comp. Absolutely understood.
| You do that when you are young and take a chance to hit
| it big. Don't complain if you don't hit it big though.
|
| I never said I applied at a startup though and the
| example I made is more indicative of Amazon or Google.
|
| The way I see the parents example the appropriate analogy
| would be a funeral for people that liked standing on the
| train tracks knowing a train was coming and trying to
| jump before it hit them and I wonder why everyone is
| surprised that it happened.
| tjr225 wrote:
| Except it's not a funeral at all, they likely still make
| well over median income.
| narrator wrote:
| If you want to pick stocks, and not just use a roboadvisor like
| betterment or wealthfront you have to understand that the market
| does not always go up. This means you have to have a bear market
| strategy and know when to switch modes from bull to bear by
| watching and deeply understanding the federal reserve. Otherwise,
| just give up and use a roboadvisor.
|
| In my case, I sold my tech portfolio when it was clear we were in
| a bear market when the war broke out and inflation was roaring.
| There's a reason people spend crazy amounts of time analyzing the
| fed. When they start raising rates a lot, like 75 basis points,
| the market WILL crash.
|
| I then started playing around with swing trading energy and
| monkeypox stocks and options and I'm now a little ahead of break
| even for the year. Generally government spending (monkeypox) and
| whatever is driving the inflation (energy) does well in an
| inflationary depression, which is what we're in. You have to
| watch the news though to see if monkeypox is a dud or if opec is
| going to throw a tantrum in response to world events, like when
| probably the U.S starts destroying energy infrastructure.
|
| Sure, swing trading is short term capital gains, but the key to
| investing is DON'T LOSE MONEY. You can only use $3000 in losses a
| year, so losing money in the stock market is double bad.
|
| I will eventually become a bull again when the fed decides to
| start lowering rates. Permabears are just as big of stock market
| losers as permabulls.
| cpeterso wrote:
| I skimmed an old book (whose title I don't remember) that
| simply recommended: when the Fed raises rates, move from bonds
| to stocks; when the Fed lowers rates, move from stocks to
| bonds.
|
| Tracking the Fed like that seems like a lagging market
| indicator. It was probably more effective when bonds had
| double-digit returns.
| faebi wrote:
| If you still feel like investing, then just continue. It's called
| dollar cost averaging. The modern term would be buying the dip.
| Also you could save cash and wait till you think the market has
| bottomed. Now some stuff has crashed more than others. You could
| find new opportunities which are really undervalued in these
| markets. A lot of the weighting has changed. So what I'm saying
| is, nothing stops you from continuing. You may lost a round but
| not the game.
| YZF wrote:
| Are those stock options for a public company? If not, I don't
| know if this would cheer you up or not, but you should have
| assumed they're worth zero anyways.
|
| With respect to the market it goes up and it goes down. If you
| have a good portfolio and you're invested for the long term just
| ignore it. To help you feel better look at how quickly the market
| recovered in the dot com bust, and in 2009. Keep dollar cost
| averaging. Never put any money into the market you might need in
| the short or medium term, stocks are for long term investment.
| TradingPlaces wrote:
| You can get a 6-month T-bill right now at 4.07% That's how.
| gardenfelder wrote:
| Is this your first rodeo?
| mac3n wrote:
| advice given me during the dot-com boom at the end of the 90s
|
| "the important thing about options is that they should be 2-ply"
| marcrosoft wrote:
| Know that relative to previous events it is possible for a much
| larger drop. Be mentally prepared. Stick to your plan. If buy and
| hold is your plan you should already know that it routinely has
| 30% drops for months or years at a time. If you have all your
| money in one company stock then your plan could use some
| diversification.
| driverdan wrote:
| I continue investing a large amount of my pay, just like I always
| do. The markets will recover.
| xivzgrev wrote:
| Make sure you are personally prepared if you get laid off. Have
| enough cash on hand to cover 6 months of expenses.
|
| Accept downturns are a part of life and are overall a good thing.
| Every bull market accumulates cruft (NFTs, ahem), and a downturn
| helps clear that out for the next bull market.
|
| Downturns can be a fantastic time to buy. The old adage is to buy
| low and sell high. S&P 500 is down 25% this year. If you believe
| (as I do) it will more than recover, then if you buy today, you
| will earn more than 25% return when it does.
|
| Lastly if your stock options are hit more than market, assuming
| you believe in long term health of business, that probably means
| they will recover more once market recovers. Tech stocks are
| getting unfairly punished now because of tampered growth
| expectations. Don't sell them. Let them vest and ride. In fact
| buy more if you can (see point above).
| whalesalad wrote:
| Find some psychedelic drugs and take them with friends in a fun
| environment. Afterwards you won't care about the market ever
| again.
| phlakaton wrote:
| My stock options have gone to basically zero twice in my career.
| It's OK. I knew going in they were gambles on companies I wasn't
| sure would take off, and I made sure I still had a decent salary
| from those companies. I also got a LOT out of those companies in
| experience.
|
| You don't have to buy options that are underwater, or that you're
| not sure will go back up. You might choose to buy some anyway for
| Reasons (in both my cases I did do modest purchases, and nothing
| has come of them), or you might decide to go put your money
| elsewhere.
|
| My advice to you: particularly if it's early in your career,
| don't put all your eggs in one basket, and don't have only one
| iron in the fire. Find other ways to squirrel money away.
| Diversify your holdings over time. Consider all the investment
| vehicles your company may offer: US companies I've worked for
| also offer ESPP, 401(k) contributions and matching, and RSUs
| (which unlike options are actual shares given to you), for
| example.
|
| Finally, go talk to a financial advisor if you haven't already
| and come up with a long-term plan that makes sense to you. That
| should give you some peace of mind!
| SnowHill9902 wrote:
| From dust you come and to dust will you return.
| aliqot wrote:
| What is the difference between 'invest' and 'gamble'?
| Tempest1981 wrote:
| Being more methodical than emotional?
|
| https://www.alphagamma.eu/finance/making-safe-investment/
|
| Smaller historic alpha or standard-deviation?
| downbad_rsus wrote:
| Based on my understanding of you've said, you are down bad on
| holdings (on paper) as I'm sure most all of us are but are you in
| need of liquidity (cash)? If not then it really doesn't matter.
| Try to focus on what you need to survive/live and let markets do
| what markets do.
|
| Eventually markets will stabilize/return to previous levels at
| least historically speaking.
|
| If you are in need of liquidity you could look to sell your
| current (even your future, yet to be vested holdings) but I'd
| recommend sitting on your hands unless you are an active investor
| or in dire need of liquidity.
|
| - down 30%+ on paper
| orzig wrote:
| All this is good advice, but I haven't seen any prospective on
| personal budgets:
|
| - Remember that money exists to be spent on useful things, it's
| not a video game score
|
| - Understand your monthly spending and monthly take-home. If
| you're in a role that grants equity, I bet you've got a healthy
| surplus. If not, I bet you could make some lifestyle changes to
| achieve that.
|
| - Take a moment to really accept that you are fine. You are not
| in danger, and shouldn't carry a fight or flight anxiety.
|
| - Then think about your future. Can't sugarcoat it, you might
| have had more vacations or whatever if your options didn't
| decline, but I bet that you can chart a course to a decent
| retirement. Use an online calculator. Again, your future is fine.
| Not great, but fine.
|
| - Think about what your future looked like when you graduated
| high school (or equivalent, wherever you did it). Did it
| _definitely_ include being rich? If not, then you have lost
| nothing relative to that. And it 's possible that on this
| company, the next one, or the one after that, you'll end up there
| anyway.
|
| - Finally, spend a little money on something you like, and cut a
| little money on something you hadn't gotten around to canceling
| (streaming service, routine meals out, etc) You have so much
| control over your life.
| roeles wrote:
| Brilliant advice. Simple wisdom.
|
| Thank you so much for sharing.
| adriand wrote:
| This is great advice. One of the things I learned from the
| pandemic experience was how little money I needed to spend to
| be happy. I spent countless hours making music using iOS apps
| that cost next to nothing. The possession that's given me the
| most joy over the past year is an old acoustic guitar that
| someone gave to me, free of charge, that sent me down the path
| of learning a traditional musical instrument for the first
| time.
|
| I used to think that if I had enough money I'd travel. We have
| savings now that would support living abroad, and I can work
| anywhere, but after doing a bunch of traveling I find I'm
| always happy to be back home. I like cooking my own food,
| seeing family and friends, sticking with my familiar routines,
| and so on.
|
| I recognize that sometimes funds are needed for things that
| would truly make a material difference to happiness, such as
| being able to sponsor family to immigrate or pay for a child's
| education. If your decline in wealth impacts those things, then
| you (OP) have my sympathy, and I hope if you are patient then
| these things will still be possible for you. But if that is not
| the situation, the old aphorism that money does not buy
| happiness is very true. We don't often live like it is, but it
| is.
| compumike wrote:
| The market is really not collapsing.
|
| A longer-term perspective might help ease your short-term
| emotional swing... see longer-term asset class graphs at
| https://totalrealreturns.com (my side project)
|
| Options are leverage. If you can't handle the levered-up
| volatility, reduce your leverage.
| devwastaken wrote:
| If you're worried about stock options and other Corpo nonsense to
| such a point if affects your general wellbeing - get some
| perspective. You're still the top 0.0001% of humans whom even
| have the opportunity, and you're still not happy.
|
| You've got limited time left to live, do something more
| meaningful and you won't be worrying about stocks into your 70's.
| yandrypozo wrote:
| Hey I can related, my stock options have a similar value, but we
| have to think that is temporary the market goes up and down with
| time. Also I recommend you looking into Stoic philosophy it helps
| a lot on these times.
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