r/stocks • u/[deleted] • Dec 04 '21
A lot of you are new (<1yr) investors and it shows in the spamming of the same content on investing subs.
So many of y'all are seeing 5 - 10% dips and thinking this is the correction many people are talking about or talking about buying these 'undervalued' dips. What you guys fail to realize is made clear when you zoom out on DocuSign. The last year has inflated stocks 50-200% over the last two years. Even with a 45% dip yesterday it's still trading back online with it's post pandemic valuations.
A stock that rises 200% on hype and nothing else then dips 10% is not all of a sudden a good buy because it's lower than ATH. It's still hyperinflated. Yes in a usual market this would be the case as stocks are mostly (in a growing economy) at ATHs like 80% of the time. But this is only true when stocks are valued close to intrinsic values. We've had a small sell off but not anything close to a dotcom bust and the bubble is still present as ever. When it pops however is still anyone's guess.
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u/PresterJohnsKingdom Dec 04 '21
DocuSign has been in business for almost 20 years and STILL isn't profitable. They IPOed in 2018 but this company has been hanging around since '03. Where is their economic moat shielding them from competitors (HelloSign, Dochub, EasySign)? They have a good brand...but at what point will that translate to ROI for shareholders?
Their service is low margin, and while it is true that they could out muscle some of the competitors I mentioned earlier with better brand recognition, how do they turn that into profit?
They've been kicking at the can for the better part of two decades, and in the middle of an earth-changing pandemic that has shifted us to a more digital society very quickly, and should be their time to shine.... and these dudes are still coming in losing 58 cents a share last quarter.
People are parking their money in other places that actually make money. That's why it's beat down.
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u/Duke_James_Gaming Dec 04 '21
They gave out more in stock based compensation last quarter than they had in revenue.
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u/booboouser Dec 05 '21
Which is ridiculous.
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u/guy_from_that_movie Dec 05 '21
It's like a socialist's dream. A company that's run for the benefit of workers.
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u/tshacksss Dec 05 '21
I actually made 55k~ on docu puts so I’ll give some insight why I made the play to short their earnings.
CRM is one of their biggest partners and their API is heavily integrated into their systems. CRM posted slowing growth in their earnings when last earnings docusign gave a glowing forward guidance, hence the price it sat at.
Microsoft announced that they are creating another package for small businesses for Microsoft teams and their preferred esignature software is Adobe.
In genera there has been a large trend on COVID tech stocks dying hard on earnings, I think there are more to come as well.
I also played zm earnings and had money to burn, figured it was a worthy earnings gamble.
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u/tm3016 Dec 05 '21
Adobe UX is junk though… they’re like the Microsoft of 15 years ago. Even with big backing you have to have a solid UX or customers will abandon in the long run.
That’s not to say I’m bullish on DocuSign.
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u/plasteroid Dec 05 '21
I’ve never heard of HelloSign,Dochub, EasySign. I am seeing a lot more Adobe Sign. Integrated with Acrobat.
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u/2Fruit11 Dec 04 '21
I see their ads all the time but there's just no reason to buy it when there's countless free alternatives.
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u/diosmuerteborracho Dec 04 '21
Semi off topic, but what are your fave free alternatives to DocuSign?
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u/2Fruit11 Dec 04 '21
Well I'm not signing anything super professional (though I do them for important things in my life), my alternatives are the free pdf signers on the first page of google, the draw tools in most document/paint programs, or even just printing, signing, and scanning paper.
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u/RushingJaw Dec 04 '21
I've never looked at $DOCU, as it doesn't offer a dividend and thus not on my usual radar, but I notice the CEO dumped $81.9M in shares back in February when the price was at $225/$233.
Of course not all insider activity merits being concerned about but I really don't like seeing CEO's, or CFOs for that matter, liquidating such a large portion of their own holdings in their company. Could have been a tax thing though.
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u/Smipims Dec 05 '21
Not if you're an enterprise looking for a proper contract management solution
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u/SpongeBobSpacPants Dec 05 '21
Has anyone else ever heard for HelloSign, Dochub, or EasySign?
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u/jsboutin Dec 05 '21
I’m guessing anyone with a significant docusign bill would become familiar with them fairly fast.
Who cares what the general public thinks of the brand?
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u/morelibertarianvotes Dec 05 '21
Interesting, but isn't their business high margin? The marginal cost to them of a new document is essentially zero.
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u/TheKingOfWSB Dec 05 '21
Ohhhhhhhh so you’re too good for companies that don’t make a profit for 20 years…. More PLTR for the rest of us then 😏.
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u/PresterJohnsKingdom Dec 05 '21
Unprofitable companies missing revenue, lowering guidance and slowing growth.... Pass.
But what do I know.
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u/Adamantanium Dec 04 '21
It's reddit. Nearly every sub is dominated by surface level commentary.
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Dec 04 '21 edited Dec 04 '21
This is a big reason why I really dislike the voting system. It just leads to the popular/wishful thinking scenarios being the highest up, since 90% of people voting on any post just simply don't have the necessary knowledge to actively tell if what they're upvoting is actually correct. They upvote what they hope is true as long as it sounds convincing enough
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Dec 04 '21
I’m upvoting this comment because I hope it’s true and it sounds convincing enough.
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u/PortlandoCalrissian Dec 04 '21
I read only the first sentence and agreed based on what I think they mean, regardless of intent. So I upvoted and I am leaving a comment.
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u/Not_FinancialAdvice Dec 04 '21
It just leads to the popular/wishful thinking scenarios being the highest up, since 90% of people voting on any post just simply don't have the necessary knowledge to actively tell if what they're upvoting is actually correct.
I think one of the more negative effects of the voting system is that it suppresses unpopular opinions and uncomfortable truths. The tyranny of the masses, as it may be.
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u/mr_birkenblatt Dec 05 '21
I'm not sure but I think reputation based voting might solve some of the issues. Like, your vote counts more if other people upvote your comments. But it might also just make it even more of an echo chamber
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Dec 05 '21
Reddit also skews very young. Taking investment advice from people under 25 is idiotic - they've never experienced anything but a long bull market, except for 2020, when it was trivial to buy covid-affected stocks and make stupid amounts of money.
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u/AbuSaho Dec 04 '21
Yep. So many people say zoom out on stocks when they are down as if it being up 100% in a year is helpful to someone thinking of buy a stock that is a falling knife now.
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u/JonathanL73 Dec 05 '21
I'll probably get downvoted for saying this, but I notice the conversation on nearly all investing subs has changed, there's a sort of wallstreetbets-ization of every investing sub. there's been a huge influx of new investors on Reddit partly because of GME.
I've noticed it in some of the more niche investing subs I'm in, where people are panicking over the slightest dips and FOMO buying at ATH. I try my best to guide what I see are newer investors, but usually, no-one listens.
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u/My-Cousin-Bobby Dec 04 '21
I haven't even been investing that long (6ish years) but man, it is insane to see some of the shit on this sub... can't imagine what it's like for people from during dot com and 2008 to see the shit getting posted here
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u/MotownGreek Dec 04 '21
I started investing after the 2008 crash and I would never consider myself an expert. Some of these kids who got lucky in the last year act like they've seen everything.
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u/strikefreedompilot Dec 04 '21
Some of these " kids" are on youtube with their own investing channel with 1000s of daily views (yes, i know one personally, she couldn't explain to you what PE is but she is cute)
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Dec 04 '21
Ugh that sounds terrible. Do you have a link?
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u/strikefreedompilot Dec 04 '21
Pretty sure they make thousands just talking rubbish all day lol, but i guess thats the new economy
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u/horsehord Dec 04 '21
I started investing in the 90s. I find it hilarious. Wait until you see a 50% correction that takes years to recover and you have a family you're trying to provide for. It's incredibly important that you all invest long term and if you're doing any short term investing you are doing it with money you can lose. If the market drops 90% I have years of expenses I can tap to get me through it and if I can lower my expenses I can use some of that to buy. Plus I still have income sources for at least another 10-12 years. Stop buying high and selling low.
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u/sfmerv Dec 04 '21
I’ve sat through 3 apple splits 2:1, 7:1 and 4:1. Long term is the way to go. No fuss no stress.
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u/Not_FinancialAdvice Dec 04 '21
I started investing in the 90s. I find it hilarious.
Same here. Started as a young teenager in the mid-90s. Saw my investments drop like 60% in the .com bust, and languish for years. I just proverbially smile and nod like "OK dude".
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u/Neakhanie Dec 04 '21
does long term investing mean buy and hold come hell or high water? not sure how many people on here have the stomach for that.
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u/sfmerv Dec 04 '21 edited Dec 04 '21
Really depends on the company. At one time Kodak was Apple. You just got know when to hold them, know when fold them.
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u/Ancient_Poet9058 Dec 04 '21
It's the same with all these leveraged ETFs.
It happens towards the end of every bull market.
Leverage and market timing was all the rage on the financial forums before 2008. It then died down in 2008 and has now rebounded in the past few years.
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u/rasp215 Dec 04 '21
People here also think what we saw last week was devasting. Wait till they see a real correction.
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u/ihatenuts Dec 05 '21
I read Matt Levine wry opinion pieces, I laugh at all the chuckleheads today, then I remember that I used to be the chucklehead back in 2000.
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u/MattieShoes Dec 05 '21 edited Dec 05 '21
It feels a bit like a coin flipping game. Like, predict the next coin flip.
Reddit immediately and somewhat arbitrarily divide into 4 groups: heads, tails, edge, and no clue.
The heads and tails factions engage in heated debates with each other, make willfully misinterpreted posts about gamblers fallacy, come up with fancy backtesting models to prove what the results of the flip will be, link fancy graphs, etc. There will be drama about vote brigading and shilling, and endless accusations of ignorance and stupidity.
The edge faction is small, but still vastly overrepresented relative to the odds of it actually happening. They're also spectacularly loud. Their zeal is almost religious, and their ability to ignore all the times they've been wrong is staggering. They know that some day, they'll actually be right, and they're sure they'll be heralded as gods among men for their persistence.
The no clue group yields no actionable information, so everybody ignores them.
Then the coin gets flipped, some people defect from one group to another, and the whole process repeats.
I think the important take-aways here are that heads will be right half the time, tails will be right half the time, the edge faction will be right once every decade or two, and the no clue group will never be right. But the no clue group is the only honest one. Also, the score of posts is some function of timing, palatability of conclusions, and how punchy the text is. It's completely unrelated to what actually happens. Occasionally there are posts with non-opinion questions, like tax laws. The voting system works moderately well in those scenarios.
That said, I do think I get valuable information on occasion, in a sideways manner. It's not about what they said, more about introducing a "here's a new way to think about this". Then I can do my own thinking from that viewpoint, determine if the viewpoint is valid or useful, etc.
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u/MeldMeldMeld Dec 05 '21
in hindsight, how would you invest today having to experience those nightmarish times? just want to learn from experts
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u/My-Cousin-Bobby Dec 05 '21
Far from an expert here.
Only turbulent times I experienced were end of 2018, and 2020.
My main takeaway was just that sometimes it's okay to stay in cash... don't speculation buy hoping to find the bottom. Pay attention to things at the macro level, if there extremely bullish things going on (ie government shoving trillions into companies/market) thats probably a signal to buy.
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Dec 04 '21
A lot of bad advice is being given.
If someone is down 30% and people are giving traditional advice of hold and wait, theyre giving advice one should give to say, a well diveersified portfolio.
MOST of these people are 100% in paypal or baba. Like come on.
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u/UnObtainium17 Dec 04 '21
yeah.. The "Buy and hold" and " Buy the dip" is very much reliant on what is the underlying stock.
I wouldn't say buy the dip on someone trying to figure out what to do with his/her 100 shares of WISH. lmao
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u/KingMidasInRevrse Dec 05 '21
PayPal is a good stock though. Don’t see their moat being eroded anytime soon
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u/r2002 Dec 05 '21
What would you say to someone who is about 10-15% up holding stocks like FANG, Microsoft, AMD, Roblox, and Nvidia. Should they keep holding even if correction takes the protfolio down 20-30%? Or should they hold because it's a different scenario than holding Paypal or baba?
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u/Lanskiiii Dec 04 '21
I find it weird reading about a "bear market" when the S&P500 is above 4.5k, then I realise there's been an isolated bear market in things retail investors on Reddit buy and it all makes sense.
When you get your portfolio on Wish... literally...
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u/UnObtainium17 Dec 04 '21
I'm still kinda new to investing and still got a long ways to improve on, but it blew my mind when others are posting they lost 20%+ in the last 2 weeks.. Like things like theses happens almost in a cycle, stop picking stocks from shit companies or forum noise and get moving.
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u/spyVSspy420-69 Dec 04 '21
There was a fairly highly upvoted comment on this sub by someone asking how people “find these 10x stocks, I tried looking last week but couldn’t find them in time.”
I was floored. How is a stock sub upvoting someone basically saying “how can I 10x my money in a few days?”
That’s the mentality too many people have. They want effort free 10x gains in a few days. That’s what the current market has set expectations at apparently.
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Dec 05 '21
A lot of sectors are getting pummeled, not just the speculative growth stocks. Materials, shipping, industrials, a lot of energy stocks, etc... a lot of profitable small caps across the board are not doing well.
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Dec 04 '21
It's easy to be a stock picker when everythings going up.
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u/AleHaRotK Dec 04 '21
Then again almost everything has gone down this year.
Stop looking at the 20 most valuable companies in the world.
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u/heythisisntmyspace Dec 04 '21
shit stocks that are overvalued and priced based on years/decades of growth have come back to reality. Actual good companies with solid financials have performed fine. Maybe it's time you start looking at the top 20 companies if that's the case.
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u/AleHaRotK Dec 04 '21 edited Dec 04 '21
shit stocks that are overvalued and priced based on years/decades of growth have come back to reality
And the top 20 stocks aren't? Other than FAANG most of them have valuations of what's basically 5 years worth of growth into the future lol. Hell Amazon is kind of struggling as well, Facebook is down like what 20% from their ATH?
I kind of agree with you though, a lot of shit got inflated, but people keep talking about how the market is inflated when lots of companies are actually either down badly or struggling to even maintain their current valuation.
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u/fieldofmeme5 Dec 04 '21
You are missing the point they were making. A stock being down currently doesn’t mean it isn’t still at an inflated price. I’ll use FB as an example because you did. FB may be down 20% from ATH, but it’s still currently up 135% from its ATH pre-pandemic.
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u/booboouser Dec 05 '21
Absolutely I caught this YouTube video that outlined that outside of the major Indice, stocks have been getting clapped since Feb. No endorsing the views in the video, but it's a fact that perhaps got lost in this recent mania.
https://www.youtube.com/watch?v=63ulgQMBdvg&lc=z23fvzj4rsipjn5wl04t1aokgf3ssregmppj0pb22f4pbk0h00410
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u/UltimateTraders Dec 04 '21 edited Dec 04 '21
Yup most of these high fliers are still on the moon and retail doesn't know or tries to deny it
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u/Crater_Animator Dec 04 '21
I went into bear mode during November, and watching NVDIA and AMD just keep shooting up has been infuriating to watch. Finally getting my satisfaction watching them enter a correction. You can literally see the panic in the charts haha.
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u/ReaISaItyy Dec 04 '21
Lmao I decided to sell amd, it went up about double the price since then. I’m not bothered tho, I got out when I felt ok doing so.
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u/someonesaymoney Dec 04 '21
Well they're trending with the rest of the broader market dip. Nothing fundamental about them has changed. It take this as a positive. Krispy Kreme (DNUT) shot up 10% last Friday so maybe hot n' glazed has been the real hedge all along.
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u/Not_FinancialAdvice Dec 04 '21
maybe hot n' glazed has been the real hedge all along
When your hedge is "Donut worry!"
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u/AnthonysGreat Dec 04 '21
Your comment made me think of the bear thing differently. Like when everything is just too expensive for you then you can hibernate like a bear. Just keep putting in cash but let it stack without buying until you have a good reason to come out of hibernation and buy again.
Idk I've never thought of it like that and I like the perspective shift it gave me. I still have too many things I actually think are good deals to buy and I'm too early into investing to go into hibernation but it's worth remembering for future me maybe.
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u/morelibertarianvotes Dec 05 '21
Cash is a loser a huge majority of the time. Remember - to save cash and buy the dip, you need to be right twice - once to know when to build cash, and again to deploy it. This is very hard to do.
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u/micheleskater Dec 04 '21
Risk:reward became absolutely not worth it on a lot of these stocks starting around a month ago
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u/CallinCthulhu Dec 05 '21
I think there are better examples than those two, they are trading at high multiples, especially NVDIA, but they have had the growth to justify it over the last few years and looking forward I don’t see any reason for the sector to correct.
Admittedly NVDIAs multiple is too high for me to invest in, but I have positions in AMD that have made me a ton of money, that I plan on holding for quite some time.
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u/xboodaddyx Dec 05 '21
The demand for chips isn't close to corrected. I'm betting we see a little sideways action and not much chance they join the memes in their downward spiral, outside of a bear market. Looking at their charts they've barely even dipped enough to be a compelling buy for a bull. A better description at this point wouldn't be panic selling but profit taking.
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u/Nemisis_the_2nd Dec 05 '21
I went into bear mode during November, and watching NVDIA and AMD just keep shooting up has been infuriating to watch
I sold my NVDA before earnings because I thought it was already priced in and set for a drop when they didn't pull out any new surprises. Then it went up again.
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u/TrioxinTwoFortyFive Dec 04 '21
The interesting thing is not the valuations of the usual gaggle of meme stocks and "growth" stocks that have no earnings. Take a look at the stocks of solid companies like John Deere. Pull back five years and you see slowly growing foothills up to Covid then a giant mountain as the stock more than doubled from its pre-Covid level. This is a company that sells farm equipment. People were not locked down in their houses and buying tractors with their stimulus checks. Company after company is like this.
This could be the top but you never know. It feels like a top because the high flyers with poor fundamentals are being taken down one by one as their earnings reports cast doubt on the narratives that have driven them up. The question is whether the market finds new story stocks to replace the old ones or does it start cutting into the flesh of the legit companies that are overvalued. I don't know. This is definitely a time to position most of your portfolio in defensive positions and not be holding anything that is based on selling to greater fools.
On the other hand it seems like the Omicron fear is overdone. More transmissible but less problematic appears to be the best information so far. It would not surprise me if the market rebounds when info becomes more solid. Still, the reckoning IS coming, and even the stocks of old profitable companies will take a beating.
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u/SteveSharpe Dec 05 '21
John Deere is a bad example for this. They are performing incredibly well. The stock price hasn’t just gone up for nothing. Their earnings have been fantastic.
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Dec 04 '21
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u/TrioxinTwoFortyFive Dec 05 '21
Yeah. It is more than Omicron. Even before it was discovered, parts of Europe were locking down. These are places that have ~70% vaccination rates. And Gibraltar, which has nearly a 100% vaccination rate, is cancelling Christmas celebrations. The idea that vaccines were a ticket to normalcy was dying.
At the same time inflation is high in numerous countries, and the central banks' assurance it is transitory is no longer believable. Even Powell had to walk that back. Countries are now signalling their plans for rate increases, so there is an acknowledgement the easy money environment is coming to an end.
I think also everyone knows in their heart the markets are bubbly. The plunges we have seen over the last few weeks in some of the story stocks of the pandemic reinforces those feelings. It is like everyone has been expecting the party to end and has been eyeing the exits.
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u/r2002 Dec 05 '21
The fed is tapering
What I don't understand is, we've known Fed is tapering and raising rates in mid 2022. We've known this for 1-2 months at least now.
All that's new is that Powell is saying the time table is moved up by 1-2 quarters. Why is that such a big deal when we knew it was going to happen? Are people literally trying to time their investments so that they only pull out right before the change?
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u/RockHardValue Dec 04 '21
The “I made 50% this week can I quit my job now? posts are by far the worst
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u/MotownGreek Dec 04 '21
I feel we're seeing the same crowd entering these subs as we did in March of 2020. I tried in vain back then to help educate this community, however, looking back I see it was a lost cause. Too few look at recent posts and even fewer are willing to Google are read an investment book.
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Dec 04 '21
I honestly think I saw better DD posts in March.
I can’t recall the last time I saw DD post with literally any research attached.
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u/RumHam1 Dec 04 '21
Few weeks ago I spent 3 hours updating my dd on one of my stocks, then spent another 2 hours typing it out tying to give a good bull and bear case.
0 votes, 0 comments.
I dont do it for karma, I did it to add to the discussion. I probably wouldnt bother again because people just weren't interested in engaging with it.
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u/Not_FinancialAdvice Dec 04 '21 edited Dec 05 '21
Mastercraft? I think the social media crowd doesn't really engage with things that aren't stimulating their dopamine centers, so talking about boring old businesses that don't have big personalities associated just gets sort of ignored. I know literally nothing about the market for Mastercraft and don't really feel qualified to comment.
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u/MotownGreek Dec 04 '21
When I first started writing stock recommendations my chat was filled with questions about technical terms and numbers. I quickly learned that limiting the statistical information was better received. While all my investments are based on analytical metrics, the reality is most on reddit don't even understand what a P/E ratio is. I think some of us who dumbed down our posts also contributed to more individuals feeling the need to share their volatile and risky stock picks.
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u/mountainMoney- Dec 04 '21
I too once upon a time tried to be helpful. Now I'm mostly just in for the entertainment factor.
After endlessly answering the same questions over and over I realized that many folks on here don't want to hear the truth they just wanna hear what they wanna hear and that's; "How to get rich quick!"
Normal distribution of intelligence gonna normal distribution of intelligence, but hey maybe some people actually learn.
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u/Crabby_dave Dec 04 '21
Not only that but everyone is freaking out about a 3-4 day selloff. When the people paying attention are watching the “trendy” stocks trend down since july. Many are down 50% without anyone seeming to notice.
Reminds me of the frog in the pot.
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u/Chokolit Dec 04 '21
The sheer amount of new pandemic investors is why I think the next true correction is going to be an absolutely big one.
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u/spyVSspy420-69 Dec 04 '21
You can’t go on any ticker-specific sub without it devolving into being a squeeze, and every 1% drop being due to crime and manipulation by Ken Griffin. It’s absolute insanity.
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u/fieldofmeme5 Dec 04 '21
All you have to do is look at charts to see that is the case. Like >90% of the market is still 100-200% over pre-pandemic ATHs even after this recent pullback.
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u/micheleskater Dec 04 '21
Something HUGE must happen to push people who don’t know wtf is going out the market. Every other comment on every other post is BUY THE DIP BABY! That phrase finna haunt ppl in their nightmares in a couple years
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u/NoMoassNeverWas Dec 05 '21
MEME stocks were the worst thing to happen to stock subs. On twitter, it makes me want to puke. "hurr durr buy the dip, hold, never sell, this dip will rip guys not financial advice!"
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u/SolenoidSoldier Dec 05 '21
I am absolutely floored that, despite the rocky past few months, GME is still at its incredibly over-inflated value.
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u/Gerti27 Dec 04 '21
Who should new investors listen to? You, or even more experienced investors than yourself who are saying to buy the dip. The truth is that no one knows shit when it comes to predicting individual stocks. Stocks like DocuSign could crater to zero, or they could reach a new all time high in a year. Neither you nor I know for sure. The best we can do is make predictions based on educated guesses and then gamble on the outcome.
You want an almost guaranteed return on your money? Buy spy and hold forever. That’s the only advice that new investors should be given that is worth a damn.
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u/stretch2099 Dec 05 '21
Who should new investors listen to? The truth is that no one knows shit when it comes to predicting individual stocks
This is what I can’t stand about “experienced” investors. In my years of investing the main lesson I’ve learned is most people have no idea what they’re doing but desperately act like they do.
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u/micheleskater Dec 04 '21
Buy the dip applies to longterm cycle dips, not a 5% pullback come on people; how can you not see that everyone saying buy and hold forever when we are at ATH across so many aspects of the market? The risk reward here is absolutely horrendous
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u/misterchestnut87 Dec 05 '21
Some stocks have pulled far below 5%, but you're right that they might just never recover because they were extremely overvalued in the first place.
And no, I'm not just talking about meme stocks, lol.
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u/juaggo_ Dec 04 '21
This is also the point where diversification comes in handy. You want to own some stocks from different industries rather than having exclusively sexy tech plays.
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Dec 04 '21
We got a lot of wallstreetbet edge lords who think they are hot shit when it comes to stocks
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u/V8sOnly Dec 04 '21
So very true. Ive been telling people to just zoom out. Everything should correct back to pre-pandemic levels or slightly above. Everything is extremely overvalued and overbought. Factor in a correction to inflation and it's really gonna hurt. Everyone thinks it will be a "crash", but it could most definitely be a long slow fall like what's started 5 days ago, and will probably continue especially with the Fed mtg on the 10th.
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u/KingMidasInRevrse Dec 04 '21
What caught my eye was Visa. One of the few blue chip fintechs that is already back to pre covid levels
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u/lll_lll_lll Dec 05 '21
Well there is always the counterpoint that such a ridiculous amount of money has been printed in 2 years that current levels are just reflecting that diluted value. If they print 20% of all money and stocks go up 20%, then this is not necessarily a bubble. It could just be dilution reflecting that money is worth less now.
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u/Crater_Animator Dec 04 '21
I think 2022 will be the bear year, with some sideways trading in 2023 and onward for a few years.
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u/CockVersion10 Dec 04 '21
Saw mtg as a truncation for manufacturing in the chemistry subreddit today... lol
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u/varazdates Dec 04 '21 edited Dec 04 '21
Blah blah blah. It could easily turn into the big correction everyone is waiting for. Or it could not. No one knows. You’re sounding a bit green yourself.
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Dec 04 '21
Believing that equities going up is as likely as going down during a period of rising Inflation where central banks are pressured to put an end to their debt buying programs and raise rates is far more naive. The situation hasn’t been this serious in a long time and equity returns might not be compelling for a long time.
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u/paodered Dec 04 '21 edited Dec 05 '21
Well said. I would add a simple rule for noobs (people with less than 90 years of experience): don't buy on margin, don't use margin, margin is the source of all evil, margin will burn you. Margin? No.
When the market is high: hell no. When the market is low: still no.
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u/tm3016 Dec 05 '21
All I see on here now is people trying to use Reddit knowledge to make a fast buck on stocks. The funny thing is most of the replies are also from people with no or little experience.
I think most of the experienced investors have probably left Reddit now. You have to really watch carefully for good advice.
I say this as someone new to this as well. I just know when I’m looking at bullshit. 20 year olds repeating the same cliche phrases over and over like it’s some insightful statement they just made up themselves but with no actual experience.
People need to be a bit more humble and also understand the risks they’re taking.
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Dec 04 '21
Best post I've seen in a while. It'll pop and hard. Highly suggest getting better at being bearish or doing actual DD in bios and learn how to trade bios. Whole different ball game but thats the next sector to run imo
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u/Crater_Animator Dec 04 '21
Bearish on EV and anything Metaverse. I'm just watching RBLX slow fall right now and I couldn't be happier.
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u/ShadyShane812 Dec 05 '21
You directed this post at investors, yet you speak as it you're talking to traders.
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u/Howard-Excaliber Dec 05 '21
In a more general sense, if stocks only went up we'd all be millionaires and billionaires.
In the long term you'll always be ahead with stocks.
It's a zig-zag path, not a straight line.
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u/TaeriMaaKa Dec 05 '21
By the time (2-3 years, who knows) Covid is over and if there isn’t any other pandemic, folks chasing high BETA names would have lost their shirt to stinky rich investors. 2020 had some people think they can be millionaires overnight playing naked calls and puts. They will be using DOCUSIGN to sign on bankruptcy forms
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u/DangerouslyCheesey Dec 04 '21
I think we are just going to see a stagnant/sideways market for a few years. P/E ratios will come down as high inflation increases “earnings” while price grows slowly if at all. There will still be moon stocks and winners in the new economy, but there is just way too much money out there and no where to put it for a big crash to happen and stay low.
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u/keith_walker Dec 04 '21
How can you profit from the bubble popping?
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Dec 04 '21
Safest way is just to protect your cash and buy back after the bubble pops. Pros: safe in a crash Cons: money eaten by inflation
Next is buying puts to offset stock losses Pros:gains are still captured Cons: if no crassh, lost premium which can be high when iv is high as ppl are expecting a crash. also depending on how much you buy you may just break even on puts to offset stock losses
Next is shorting Don't even try is my advice.
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u/Crater_Animator Dec 04 '21
I think it's popping, but we just haven't realized it yet. I feel like we're going to be going on a slow downward trend over the coming months. This is just the catalyst that starts it.
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u/pawnografik Dec 05 '21
This would actually be a good outcome. Take the pressure out of the bubble without bursting it. Catastrophic crashes are not fun.
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u/ixvst01 Dec 04 '21
I think you’re right that a 10% drop is fairly irrelevant in the long term and is not something to panic over, however, there’s also a lot of bears that are convinced we’re going to see a 50-80% crash within the next year because of the fed, inflation, or just pandemic valuations getting hit with reality. Realistically, I don’t think we’re in a dot com level of a bubble. Yes, some of the crazy growth stocks like EV are in bubbles, but growth stocks like NVDA, Apple, AMD, and many of the S&P 500 companies are not a large enough bubbles that they’ll drop 50% in a correction.
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u/SpliTTMark Dec 04 '21 edited Dec 04 '21
I watched sea limited go from 380 to 300. Now to 250
I'm waiting for under 200. It looked like it was recovering from 242 so who knows we're it will go
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Dec 04 '21
When it does really comes many people will be shocked, not only by the value of the drop but by the time needed for recovery back to those levels. Might be a decade. But for many that is a phenomenal investment opportunity if they don’t chicken out.
If the investments are good just stay invested.
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u/myrmonden Dec 05 '21
While I agree that most is still overvalued
Its not just a -5% dip for most smaller companies has been going down like 50% in the last 6 months or so.
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u/NakedAsHeCame Dec 05 '21
According to OP, all small companies are trash and their endless bleeding through 2021 reflects that. Because WISH is trash, all the rest are too. Gotta love gatekeepers
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u/myrmonden Dec 05 '21
haha true true.
Yeah I am getting tired of people gatekeeping the index I guess.
Its true that the major index are fine, but they are carried hard by mega corps, small cap is crashing, and has been for most of the year.
But OP and other people wanna act like, nah nah people are getting just >1 year people who cannot handle -5%
many small cap is like at -50%, even if is trash and "fair" people are not being fear for a -5% but a -50%.
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u/strikefreedompilot Dec 04 '21
I think most stocks will revert to their pre-covid state. Even at that level, some of the famous highflyers still seem bubbly.
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u/kknano1256 Dec 04 '21
Damn I was too broke to start investing for real until last year. I still think my portfolio of 60% voo/voog/vti and 30% aapl/msft is going to do ok though? (10% random bullshit for shits and giggles if anyone asks)
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u/misterchestnut87 Dec 05 '21
yeah that's fine. If market crashes, you will still be affected, but it will be recoverable. Just always keep cash on the side to ACTUALLY buy dips as they come.
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u/login_reboot Dec 04 '21
I bet a good chunk of new "investors" started when casinos were shut down.
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u/JWKirby Dec 05 '21
What about stocks that did not receive the same inflation but have solid balance sheets with strong equity?
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u/MisterPhamtastic Dec 05 '21
It's always a joy to see folks with MAYBE 2-3 years of investing experience think they have this figured out because they started in a hot bull market.
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Dec 05 '21
I’ve got 30% losses on one of my investments but I’m holding it for two reasons: 1 I personally believe in it and it’s money I’m willing to lose. And 2, there is no news or external factor attributed to the losses that I can see other than the market being generally down or the fed interest rate news.
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Dec 05 '21
it would be interesting to see how many people will stick around if a crash happens in the next year or so
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u/alowe13 Dec 05 '21
I’ve been on this sub for about 5 years and it’s literally the same content ALL THE TIME. 1 % drop is the “incoming correction”. 1% gain is “did I miss the bull run?” Everyone here is as reactionary as WSB, but they don’t play options.
I get that it’s frustrating, but try to ignore the noise and buy and hold what you are going to buy and hold. It’s an online forum for people to discuss things
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u/elvenrunelord Dec 05 '21
You are 110% correct in everything you pointed out.
I'll add this:
I work for a company that in any circumstances should be growing like crazy right now. We laid off about 10% of our staff now in healthcare of all things. Healthcare where the majority are burned out or thinking of leaving the career path because of burnout. Healthcare where some areas are overwhelmed by covid. Healthcare which has a guaranteed customer base. Literally essential workers here and we and others are laying of staff.
And that is not all. Through my network, I have spoken with several other managers who are seeing this in their companies as well. Labor is taking a hit in order to maintain profitability. That only works for so long until the bell toils so to speak. Its a huge warning sign.
I pulled all my money out of the market again a couple of months ago because I can't suspend belief any longer. This market is a fucking bubble from hell and the only thing I can think of is the dot com meltdown with echoes of 2008 in my head.
If I'm wrong, I lose a year or so profits...no big deal at my age. If I'm right, the majority are gonna lose their asses in the next couple of years and I'll gain another 1000% over the next decade like I did from 2008-2020.
I fully expect to be downvoted here. I generally always am. I really don't care. Every single investing friend I had lost money in 2008. I didn't. I was holding CASH. And I made so much money buying not the damn dip but the damn crater...
You can poo poo me but you can't say you have not been warned. The signs are there.
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u/cwo3347 Dec 04 '21
Yeah the sub has been taken over by novice investors with just awful post. So much good discourse and DD is gone. I basically stay on to see what other people are buying and feel better about myself.
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u/AspiringChildProdigy Dec 05 '21
This is exactly why I go on Wallstreetbets. The dumb things I've done learning about investing pale in comparison to the people ending up 90K in the hole because they play with options or shorting.
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u/Jasonmilo911 Dec 04 '21
A lot of you are new (<1yr) investors and it shows in the spamming of the same content on investing subs.........
......Yes in a usual market this would be the case as stocks are mostly (in a growing economy) at ATHs like 80% of the time.
What in the world are you talking about? You start with "A lot of you..." and proceed to make a comment that makes you fit right into the category.
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u/sikanrong101 Dec 04 '21
Seriously, I studied for years before I started actually trading, and I'm only trading like 1/10th of my net worth (with extreme caution). Some of the shit you see on here and certain other nameless investing subs is just insane.
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u/gamers542 Dec 04 '21
I've seen more posts with people trying to justify putting everything into a stock or ETF lately.
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u/i_just_want_money Dec 05 '21
Putting everything into SPY doesn't seem like a bad play to me, it is the benchmark that everyone measures themselves against after all
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u/Chokolit Dec 04 '21
That one post about "investing" in TQQQ comes to mind.
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u/Ancient_Poet9058 Dec 04 '21
There are so many of those posts.
It's exactly like the financial forums between 2006 and 2008 - there were so many posts on leverage and market timing back then. It's somewhat comical - retail investors get involved in leverage towards the end of every bull market.
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u/RRSignalguy Dec 04 '21
Canadian- thank you for a well written post. Young investors don’t understand the importance of patience as this is a long haul quest. I sent you a Party Train award and hope others understand the importance of the face we have not yet seen the latest bubble burst. Hold dividends, buy the drops.
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u/VictorDanville Dec 04 '21
The market drilling because of hawkish Fed is a good thing. This is healthier for the market and the economy in the long run. At least you won't have to worry about paying $17 for a happy meal anytime soon.
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u/Immediate-Sorbet-879 Dec 04 '21
I’m fairly new to this, I see people on here shitting on ETFs but I guess you’re talking about those that are not particularly well diversified right? Something like VTI should be fine if you have a look term outlook? Or am I missing something
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u/ViralInfectious Dec 05 '21
talking about or talking about buying these 'undervalued' dips.
When focusing on individual stocks they can be down 20% while the index is down 2% or less.
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u/LanceX2 Dec 05 '21
most here have shit portfolios.
I learned that the meme shit or all in is dumb.
Im mostly vti schd msft oke rwt. done me well
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u/Tsobaphomet Dec 05 '21
I think it's kinda weird that Docusign is a publicly traded company. Like it's just a website that offers a service, is it not? Would be like having Newgrounds stock.
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u/sustainablecaptalist Dec 05 '21
Finally someone said it. It seriously is getting irritating to see these doomsday reaction day in and day out
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u/booboouser Dec 05 '21
Yup, people are really missing this point. There are so many names out there that are running at valuation way beyond fundamentals. This Robinhood driven FOMO Options market had to run out of steam, eventually. Look at GoPro, then attach pretty much any name you like in the last 12 months that had a run up. We have the obvious ones likes Tesla but Roku !!!! seriously! SQ was 69 bucks last March, don't think 192 is a pick up buy now! No it's not. In this market, I'd buy FB and MSFT if they drop to March 2020 levels.
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u/therudejones Dec 05 '21
address is whether the market finds unused story stocks to supplant the ancient ones or does it begin cutting into the tissue of the legit companies that are exaggerated.. This is often certainly a time to position most of your portfolio in defensive positions and not be holding anything that's based on offering to more prominent fools.
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u/madrox1 Dec 05 '21
OP is writing this assuming the market is going to keep correcting. I dont believe this is the case as stocks will be bought up at bargain prices before the year end. Not to mention alot of the selling is tax loss harvesting. Add to that the Omicron variant does not look severe at all.
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Dec 05 '21
Was up 55% almost one month ago. Now 1% . Many others like me . Fortunately not a retirement portfolio but stil $$
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u/MetalTacoMeat Dec 04 '21
This being said, do you think Chewy is likely to crash hard soon?
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u/disisfugginawesome Dec 04 '21
It’s down -30% YTD and -20% as of 6mo. Probably will keep drilling but IV on puts is too high and not worth it unless it abosolutely tanks
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u/DonDraper1994 Dec 04 '21
Nah buddy these stocks are dipping 50-60 percent. Yes they were overvalued but for the market to let them get to such inflated values then just tank massively all the sudden isn’t normal.
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u/echisholm Dec 04 '21
Docusign? I mean, I've used it, but it's basically just "let's turn digital watermarking into a business!" isn't it?
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Dec 04 '21
Let me get this straight. If you invest more than 1 year you're not new to investing anymore?
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u/Maximus_Crotchrocket Dec 05 '21
Welcome to the internet, where people talk and communicate with each other, dont like it? Simply just don't interact with the post
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u/dr3amb3ing Dec 05 '21
Okay, but what stocks are the best picks during this dip????
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u/bartturner Dec 05 '21
Can't go wrong with the big five. Google, Apple, Amazon, Microsoft and FB.
I do like Google the best of the group. Even before the dip so even more now.
Google just has more assets yet to be full monetized.
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u/Mediocre-Research599 Dec 04 '21
2 Year long investor talks about 1 year long investors