STOCKS (high risk high return??)

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amithrain

amithrain

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This is probably a terrible place to ask because a KKFer’s first instinct is to buy knives with every dollar earned, but here we go:
So I earned a couple hundred dollars that I don’t know how to spend. I’ve pretty much decided to invest it for the experience, because I’ve never done so before. Of course, the safest thing to do is s&p 500 index funds, etc etc, but that’s slow and I kind of want to have some fun. Does anyone know any high risk high return stocks to invest in? Alternatively, any advice/discussion on stocks and investing is very welcome.
 
I’d say the whole leisure travel sector may bounce back quickly. Business travel, not so much.

I have no specific expertise, I’m just trying to point you in a direction to start thinking.
 
what SPY aint slow it's like 7% per year.

listen if you think you can beat the index more power to you. I have an advanced degree in econ and work in ML and I took one look at the problem space and just bought SPY. not worth the effort.

plus once upon a time I used to play a couple of betting games (poker, mahjong, etc) and I got pretty into the math behind the betting specifically and my advice is that eventually greed will catch up to you. if you want to be successful in the long term you need to be patient and you need capital. that's it. there's no get rich quick scheme that's reliable enough to objectively pursue.

if you want to gamble in a high risk fashion you can do option trading and you can sit at your computer all day working them but personally I get paid a lot more to do a normal job and put the money in an index.

if you really want to make money and have time to spare to gamble write something that tracks congressional disclosures. not political. both parties. if they buy, you buy. if they sell, you sell. at least then you dont have to slave away at your computer

or just do some actual gambling. at least then you know where you stand.
 
US stock market is at/ near all-time highs. So not a great time to jump in. But there are always some bargains around if you (or broker) poke around enough. The travel/ hospitality sectors have bounced back a lot, but there are still a couple string names out there that are a little beat up. I actually rotated out of tech stocks over the last 2 months and into a couple airlines, a cruise line and a hotel. I had done very well with Microsoft and crApple and to a degree Facebook, over the last year so I sold those to get the new batch of stocks. You might want to consider Moderna, although it has already doubled over the last few weeks. But their vaccine is the first of a series of drugs that are in their development pipeline; they should have a good future. It's all a gamble to a certain extent though. Jumping in at highs decreases your chances for a good score, and sets you up better for a loss in a pullback.
 
If you're looking for high risk r/wallstreetbets is it. I'm too wimpy to play like they do, but I've made good money trading some of their picks. It's also a place of horror stories...as stated above greed can catch anyone.
 
If you want the thrill, just buy some super obscure cryptos.
99.9% you’re losing all your money, but that 0.1% could make you a lot of money.

but I agree with what has been said above: Daytrading is like gambling and the pros use super fast computers and algorithms that skew the game anyway.

with stock markets at all time highs you need to look at some beaten down stocks. Travel will be consolidated and the surviving ones might thrive, yes. Oil stocks already came back a bit and once we have the vaccine going they could easily double ... and there’s less chance they go bankrupt (at least not the large ones). But it’s guess work, the stock market is detached from the economy.
 
If you want to invest for the experience then this is what I'd do.

Say you have 300 dollars. Use 100 to buy the S&P500 through an index fund, use 100 dollar to either buy an outright bond (probably not possible) or a bond fund/index for example US aggregate bond, and then 100 dollar to buy any single stock you fancy.

This way you will learn about things like bid offer spreads, how the process of buying and selling works, how diversification works, which asset managers are out there. And so on. This will help throughout your life, and especially when you have more money to invest.

Full disclaimer: kkf is not a good place to ask for investment advice. That said, it's kinda my job.. :)
 
In the first part of the year, I poured money in. Marathon Oil has been my big winner but, I have consumer staple type stocks that are giving it a good run at topping the Oil companies.

I was invested in the cruise lines but, they have been basically flat. I'm not convinced people want to sail on the USS PETRI DISH!

Everyone has to start somewhere and like you, I started really small with individual stocks mainly. I quickly found it wasn't worth the effort to track them and it wasn't very fun either.

Historically, index funds are a good choice for a lot of people. Contrarian funds can work if you pick correctly but, you can also lose big time too. Don't get me started on options trading and similar leveraged and risky bets.

Gold stocks are where I would look for a 'flyer' where total loss of investment was acceptable for something different. You could also buy ~10oz of Silver.
 
Over 25 years, I learned one thing
NEVER SELL.
I have many anecdotes, but here's 3 that sum it up.
I bought Netflix at 16 dollars, sold at 168, and thought I was really smart.
I put about 5000 each into MVIS (with dilution etc, it's worth about 900 now) and EXAS back in 2004, and recently sold half my EXAS because retirement is looming and figured ok, now I can sell, time to get conservative.
The math shows holding pays off long term.
Ok, one more- ATVI, for years and years was stuck at 10 to 16$ I believed in video games though I don't really play myself. Recently I bought more because now I REALLY believe in online games.

Also, what Wanamhong said is perfect.
I'm assuming this money is in a retirement account, otherwise capital gains in index funds can be a pain.


For ideas on disruptive stocks, look into ARK invest.
Short term stocks (less than 5 years in my opinion)are gambling.
Remember, never sell, you can only lose everything once, but winning can be forever. So much winning$$$.
 
one of the reasons I dont go for individuals is nothing is rational.

NKLA not at zero despite being a literal fraudulent business under federal investigation and GM having to substantially change partnership because NKLA told them a truck rolling down a hill was driving (not a joke), TSLA being worth bazillions of dollars despite the fact that they are probably the jankiest "tech" company in the world that have no clue how to develop software (which is kind of important you know), AMZN is down from it's high despite being the literal best positioned company for the pandemic, etc.
 
Knives can be a sound investment, kitchen or pocket. I have found firearms to be very sound investments. Quality firearms will hold or increase in value and are very easily liquidated.
 
Recognize a loser before it hits rock bottom. Don't wait and hope it comes back. Sell it and move on. 50% of something is better than 100% of nothing.

Case in point, I bought Boeing at $120 and sold it a bit above $180. Last time I checked it was around $150 thanks to the first flights of the 737 Max bumping it back up. Long term, vacation and business travel is down so, the demand for new passenger aircraft is low.

Boeing has a good military division but, under a Biden/Harris administration I don't expect it to take off based on previous Democratic administrations military spending history. Thus, I'm glad I'm out of Boeing and locked in my profits.

Is Marathon and Valero oil a good long term stock with Tesla and others bringing electric cars to market? Certainly not for me as a retirement stock, however it will be a long time before refining capacity declines. I'm up 50% to 80% in those stocks in the past year so, I've done really well with them so far but, their run is not over until the need for refined fuels diminishes.

I still have a hard time understand crypto-currencies without any intrinsic value. Sure, the USA is no longer on the gold standard but, it is backed by the good faith of the USA. If cryptocurrencies decline or fail, who do you turn to?
 
Recently thought about trying to understand the stock market a little bit better, which I guess would really be try to understand it at all, but after this inspired me to do a little research I just feel more broke and stupid. Good luck to all of you brave souls
 
Boeing was at $230 the other day.

FWIW I bought it at around $65 and sold it at around $325 (when it was on the way back down). It was a stock I always avoided, as I never liked cyclicals. But my broker talked me into it 6 or so years back.

When it dropped to around $120 I figured I would not jump back in, as I did not want to risk it unless it was below $100. It has bounced back pretty well from those lows, but I think it will be sideways for quite a while until airlines have enough $ to start ordering again.
 
I wouldn't say the Gold Standard does much at all, other than possibly keep the value of a currency artificially high, without much value, thereby shrinking exports and flexibility for monetary policy, neither great things. Gold, crypto, or real currency like the dollar, if the market loses a want for it you're screwed. Over the long run, real value is in goods and services produced by the economy. The dollars worth something because people want to buy goods and services which are valued in dollars.

If you want this money to grow to its maximum potential over twenty years, statistically speaking you are best off buying a S&P mutual fund. If its just fun, then go for something crazy like SpaceEx. Idk, it really doesn't matter if you're going with bigger companies. Larger forces effect the economy. If the new Congress and Administration can get their act together and roll out the vaccines (with a couple more getting approved) effectively and pass some stimulus, the big companies will do the best of everyone and the stock market will go up a bit more before a correction. If there's gridlock on stimulus and the vaccine roll out doesn't go well, the Dow will crash 20k and everyone will get hit. If its somewhere in between as is likely, we'll have some middling result, where the larger companies will be more insulated from downward trends because of their presence overseas as well.
 
alterwisser said:
If you want the thrill, just buy some super obscure cryptos.
99.9% you’re losing all your money, but that 0.1% could make you a lot of money.

but I agree with what has been said above: Daytrading is like gambling and the pros use super fast computers and algorithms that skew the game anyway.

with stock markets at all time highs you need to look at some beaten down stocks. Travel will be consolidated and the surviving ones might thrive, yes. Oil stocks already came back a bit and once we have the vaccine going they could easily double ... and there’s less chance they go bankrupt (at least not the large ones). But it’s guess work, the stock market is detached from the economy.
Click to expand...

These are all good points. I might also add that for single stocks in addition to the matter of high frequency trading there is also almost certainly some degree of information asymmetry that does not favor the small investor. The NKLA example cited above by @tcmx3 or the now extinct theranos only serve to show that sometimes even the big players get gamed, market oversight and enforcement are fairly weak these days.
 
WildBoar said:
Boeing was at $230 the other day.
...
Click to expand...

Wow! That's a big jump that I missed. To be honest, I'm a bit surprised it got that high but, Robinhood and other things have caused significant price spikes for reasons that defy normal market logic with some other stocks so I guess this isn't too far out of the norm.

Even if Boeing gets full 737 Max recertification all over the world, passenger loads are still pretty low and will likely stay that way for a good while. Airlines are already dumping big parts of their fleets to keep only the newest most efficient planes and in some cases consolidating on a single brand for easier and cheaper logistics for fleet support.
 
SHOWERDOOKIE said:
Recently thought about trying to understand the stock market a little bit better, which I guess would really be try to understand it at all, but after this inspired me to do a little research I just feel more broke and stupid. Good luck to all of you brave souls
Click to expand...

A better strategy is to focus on something you know or have familiarity with. Most people can do well IF they stick to things they know whether they are a car mechanic, carpenter, software engineer, doctor, etc.

Farmers can do well with Ag related stocks. Nurses, Doctors, etc. can do really well with medical companies. Housewives can do really well with consumer staple companies (think laundry detergent, package foods, etc.), and so on. My mom worked at Macy's and made a lot of money on Macy's stock because she understood store traffic and cash register sales.

I bought AGCO on a flier thinking people will still need to eat so, farmers will need tractors and other equipment. AGCO has treated me much better than I expected. I live on a farm now and grew up on a farm in Oklahoma. The Oklahoma oil boom really opened my eyes to that market and, Marathon and Valero refineries are treating me well. The retail pump companies (gas stations) are doing okay but, aren't on fire like some other companies. I also knew oil exploration companies were way too risky for me. When they hit, they hit big but, most end in bankruptcy.
 
I've done well with Qualcomm bought last year.
Not taking profits they are a leader I think for years to come.

Just bought Vuzix (VUZI) digital glasses. It's cheap a bit of a gamble they supplied the military looking to branch in other sectors.
 
I'm seeing some remarks about never selling single stocks versus holding on to losers. This is exactly why buying an index fund is such a good choice and imho preferable over buying single stocks.

An index fund will automatically make sure you will have increasing exposure to winners while reducing exposure to losing stocks. Buy an index fund and you will always be on top of any new technological innovation.

Investors often fall into behavioural traps, like selling stocks too soon or holding onto stocks for too long. Again, this is where an index fund helps as it will do this for you!
 
Wahnamhong said:
...
Investors often fall into behavioural traps, like selling stocks too soon or holding onto stocks for too long. Again, this is where an index fund helps as it will do this for you!
Click to expand...

If my crystal ball wasn't so cloudy, I wouldn't have sold winners before they topped out and I definitely would have sold the losers sooner. Hindsight is always 20/20 and current market trends with new investors is definitely schewing long-held market beliefs.

A lot of individual stocks have a Bitcoin feel regarding highs and lows with the volatility of big swings in short periods of time. This is a new level of price volatility for me and above historical norms in most cases.
 
Just paid taxes on regular IRA & combined it with my Roth. Now taxes are reasonable, there is now talk about doubling taxes in stock market.
Some act like the stock market is just for the rich. My 401 is in a good fund mostly in stocks. Was thinking of transferring it to IRA taking money out of it to pay taxes turn it into Roth. Who knows where taxes will be in future. Index fund for that account.
 
Last edited by a moderator:
deskjockey said:
If my crystal ball wasn't so cloudy, I wouldn't have sold winners before they topped out and I definitely would have sold the losers sooner. Hindsight is always 20/20 and current market trends with new investors is definitely schewing long-held market beliefs.

A lot of individual stocks have a Bitcoin feel regarding highs and lows with the volatility of big swings in short periods of time. This is a new level of price volatility for me and above historical norms in most cases.
Click to expand...
I used to work with some traders and they taught me to use price targets and stop loss levels. At the moment you are buying a stock you should already know at which price you will be selling (part of) it if the stock price climbs to a certain level.

Likewise you should already know at which price you will cut your losses once the price is falling (stop loss).

The more you automate your buying and selling, and hence cut out your instincts, the better your results will be. While my proposed solution won't help with extreme volatility it's still a good approach imho.
 
deskjockey said:
A better strategy is to focus on something you know or have familiarity with. Most people can do well IF they stick to things they know whether they are a car mechanic, carpenter, software engineer, doctor, etc.

Farmers can do well with Ag related stocks. Nurses, Doctors, etc. can do really well with medical companies. Housewives can do really well with consumer staple companies (think laundry detergent, package foods, etc.), and so on. My mom worked at Macy's and made a lot of money on Macy's stock because she understood store traffic and cash register sales.

I bought AGCO on a flier thinking people will still need to eat so, farmers will need tractors and other equipment. AGCO has treated me much better than I expected. I live on a farm now and grew up on a farm in Oklahoma. The Oklahoma oil boom really opened my eyes to that market and, Marathon and Valero refineries are treating me well. The retail pump companies (gas stations) are doing okay but, aren't on fire like some other companies. I also knew oil exploration companies were way too risky for me. When they hit, they hit big but, most end in bankruptcy.
Click to expand...

strong disagree.

being an expert at one thing doesn't make you an expert at another, even if they seem related if you squint hard enough. a stock of a thing is not the same as the thing itself.

if you're retired and sit around all day doing it, like my grandfather did for the last 40 years of his life, sure. but even then if you really want to know why he was successful it's because his dad was rich, too, and his dad, and his dad, and his dad...
 
tcmx3 said:
strong disagree.

being an expert at one thing doesn't make you an expert at another, even if they seem related if you squint hard enough. a stock of a thing is not the same as the thing itself.

if you're retired and sit around all day doing it, like my grandfather did for the last 40 years of his life, sure. but even then if you really want to know why he was successful it's because his dad was rich, too, and his dad, and his dad, and his dad...
Click to expand...

What do I know about the GAP or Nordstrom's? For me, it would be all about blind education. With my experiences in life, I start from a much stronger position of strength to study stocks in question.

As an example: Children are often good at spotting upcoming trends because they know what their peers are doing and what they want. Perfect, No! Better than blind study, Yes! YMMV.

My mother was NOT wealthy. What she was, was observant. She saw trends on the sales floor management in their Ivory towers never saw. For someone of modest means, she did well.

On the flip side, I do see a lot of people who think they know more than they really do JUST BECAUSE THEY HAVE MONEY! Money helps but, it doesn't solve all problems either. A rare few don't follow common advice and strike it rich but, we generally never hear about all the failed attempts that ended in failure. Having unique insight definitely helps a lot of people become successful though!
 
Wahnamhong said:
I used to work with some traders and they taught me to use price targets and stop loss levels. At the moment you are buying a stock you should already know at which price you will be selling (part of) it if the stock price climbs to a certain level.

Likewise you should already know at which price you will cut your losses once the price is falling (stop loss).

The more you automate your buying and selling, and hence cut out your instincts, the better your results will be. While my proposed solution won't help with extreme volatility it's still a good approach imho.
Click to expand...

Yes, I use limit orders to limit losses and it also tends to limit profits as well. On the flip side, I would rather have 80% of something versus 100% of very little or nothing.
 
one of my favorite things is watching places like Hindenburg absolutely demolish flavor-of-the-month stocks whose entire business model is a sham:


deskjockey said:
What do I know about the GAP or Nordstrom's? For me, it would be all about blind education. With my experiences in life, I start from a much stronger position of strength to study stocks in question.

As an example: Children are often good at spotting upcoming trends because they know what their peers are doing and what they want. Perfect, No! Better than blind study, Yes! YMMV.

My mother was NOT wealthy. What she was, was observant. She saw trends on the sales floor management in their Ivory towers never saw. For someone of modest means, she did well.

On the flip side, I do see a lot of people who think they know more than they really do JUST BECAUSE THEY HAVE MONEY! Money helps but, it doesn't solve all problems either. A rare few don't follow common advice and strike it rich but, we generally never hear about all the failed attempts that ended in failure. Having unique insight definitely helps a lot of people become successful though!
Click to expand...

everyone's free to believe what they want. from my perspective you've built up a lot of what I would characterize as a personal mythology, which is unimpressive to me (and by that I mean as an investment strategy, not your life story). normally this is whatever but this thread is someone asking us for advice on how to spend money so I feel compelled to point out that I find your strategy unlikely to be good advice, and as such I 100% stand by my disagreement with the strategy you laid out in post 21.
 
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