Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
typical.investor
Posts: 2291
Joined: Mon Jun 11, 2018 3:17 am

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by typical.investor »

Bama12 wrote: Fri Apr 03, 2020 8:21 pm Now is not the time to buy index. You want to buy good stocks.
Why? Good stocks are obviously going to be priced at an unusually large premium in times of distress.

Sure there is chance that everything else will go under, but at low prices companies don’t have turn into stars to be stellar.
Bama12
Posts: 277
Joined: Fri Aug 30, 2019 11:48 pm

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by Bama12 »

typical.investor wrote: Sat Apr 04, 2020 9:12 pm
Bama12 wrote: Fri Apr 03, 2020 8:21 pm Now is not the time to buy index. You want to buy good stocks.
Why? Good stocks are obviously going to be priced at an unusually large premium in times of distress.

Sure there is chance that everything else will go under, but at low prices companies don’t have turn into stars to be stellar.
Good stocks have gone down also.
User avatar
watchnerd
Posts: 5981
Joined: Sat Mar 03, 2007 11:18 am
Location: Seattle, WA, USA

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by watchnerd »

Bama12 wrote: Sat Apr 04, 2020 9:21 pm

Good stocks have gone down also.
But did the valuations of good stocks actually go down?

We won't know until we get new earnings.

They may not actually be cheaper, just lower priced.
70% Global Market Weight Equities | 15% Long Treasuries 15% short TIPS & cash || RSU + ESPP
bugleheadd
Posts: 333
Joined: Fri Nov 29, 2019 11:25 am

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by bugleheadd »

if it was so obvious as to know which stocks to pick, everybody would be doing it and getting rich
Slowtraveler
Posts: 209
Joined: Wed Jan 10, 2018 10:21 am

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by Slowtraveler »

It's already priced in so Costco has to beat expectations more than the Alaska Airlines beating its expected returns. Costco earnings yield was less than 4% last time so checked, whereas Alaska Airlines is 25%. Yes, earnings are expected to increase and decrease for the former and latter respectively but it's how the companies perform relative to expectations that matters. So even if Costco's earnings are amazing, it won't help as much as if Alaska Airlines has just moderately better earnings than expected and manages to pull of being cash flow positive. The companies are priced for bankruptcy and I don't think that's likely.

My years of investing have taught me that the future is unknowable and I was so arrogant or foolish to think I knew better. Thank God I learned how to accept that fact.

As a disclaimer, I own a very small share of every company mentioned in the OP.
typical.investor
Posts: 2291
Joined: Mon Jun 11, 2018 3:17 am

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by typical.investor »

Slowtraveler wrote: Sat Apr 04, 2020 10:46 pm It's already priced in so Costco has to beat expectations more than the Alaska Airlines beating its expected returns. Costco earnings yield was less than 4% last time so checked, whereas Alaska Airlines is 25%. Yes, earnings are expected to increase and decrease for the former and latter respectively but it's how the companies perform relative to expectations that matters. So even if Costco's earnings are amazing, it won't help as much as if Alaska Airlines has just moderately better earnings than expected and manages to pull of being cash flow positive. The companies are priced for bankruptcy and I don't think that's likely.

My years of investing have taught me that the future is unknowable and I was so arrogant or foolish to think I knew better. Thank God I learned how to accept that fact.

As a disclaimer, I own a very small share of every company mentioned in the OP.
Bingo. Here’s a post by someone who understands!
User avatar
watchnerd
Posts: 5981
Joined: Sat Mar 03, 2007 11:18 am
Location: Seattle, WA, USA

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by watchnerd »

Slowtraveler wrote: Sat Apr 04, 2020 10:46 pm
My years of investing have taught me that the future is unknowable and I was so arrogant or foolish to think I knew better. Thank God I learned how to accept that fact.
Here's the other stunner:

Historically, just 4% of the stocks in the market account for the entire equity risk premium.

The other 96% failed to beat T-bills over the long haul.

Who thinks they can beat those odds over the long term?
70% Global Market Weight Equities | 15% Long Treasuries 15% short TIPS & cash || RSU + ESPP
User avatar
geerhardusvos
Posts: 1135
Joined: Wed Oct 23, 2019 10:20 pm
Location: heavenlies

Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by geerhardusvos »

Silk McCue wrote: Fri Apr 03, 2020 12:33 pm Diversification is a benefit regardless of the reason for market machinations. There is nothing new here from a market volatility perspective.

I think your Boglehead core ideals may only be skin deep. Therein lies the problem.

Cheers
+1 :sharebeer

OP is not smarter than the market, especially long term
VTSAX and chill
User avatar
Phineas J. Whoopee
Posts: 9675
Joined: Sun Dec 18, 2011 6:18 pm

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by Phineas J. Whoopee »

Does the thread title translate to Do you want to own the whole metaphor when someone can make up a contradictory metaphor?

Sometimes I use a metaphor to help convey a concept, but I keep my personal investing reasoning off the metaphorical plane.

PJW
User avatar
1789
Posts: 1723
Joined: Fri Aug 16, 2019 3:31 pm

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by 1789 »

Prettyfrtnt wrote: Fri Apr 03, 2020 12:23 pm Questioning my bogelhead core ideals. Generally we want diversification. It is a benefit. Are we sure it is a benefit during a pandemic.

Won’t there be obvious winners and losers?

Winners: 3M, Costco, Zoom, Amazon... others I will not share here. I feel I have as a physician very specific epidemic knowledge ahead of the market.

Losers: Ford, GM, many more.

Is anyone starting to think they are smarter than the market? The market has been fairly dumb.

Why own a haystack (VTI) when someone has a blowtorch? Even Cramer says only a few will survive in many sectors.
I can give you reference on how successful Mr Cramer when it comes to stock picking. His top ten stocks decreased 94% to be accurate between 1999-2002. Those companies you mentioned got lucky this time and they wont be lucky that much next time. And plus you are late to the party anyway.
"My conscience wants vegetarianism to win over the world. And my subconscious is yearning for a piece of juicy meat. But what do i want?" (Andrei Tarkovsky)
3funder
Posts: 1456
Joined: Sun Oct 15, 2017 9:35 pm

Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by 3funder »

chw wrote: Fri Apr 03, 2020 3:58 pm You might be right about some of those stocks, but not able to consider some variable that could negatively impact other stocks you like. Some thoughts-

1) Say you're right about some of these stocks- do you plan to buy and hold forever, or do you have an exit strategy?
2) Seems like you have a lucrative day job, do you really want to be keeping track of a basket of stocks, and trying to keep ahead of potentially bad news, which might impact your holding a particular stock? You'll find that by the time you get or hear about any impactful news about a company, the market will know ahead of you.

Trust me, you'll be better off with the haystack- you'll find it has plenty of fire retardant in it.
+1
sharukh
Posts: 299
Joined: Mon Jun 20, 2016 10:19 am

Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by sharukh »

watchnerd wrote: Sat Apr 04, 2020 9:19 am
sharukh wrote: Sat Apr 04, 2020 6:09 am
watchnerd wrote: Fri Apr 03, 2020 5:22 pm
Thus, these days, I put my mental work for alpha generation into illiquid, inefficient, private markets
Can you please give examples of these.
Thank you
Private infrastructure (cell towers, EV charging stations, windmills), angel VC investing, macadamia nut farm, aqua culture.
Thank you
dacalo
Posts: 126
Joined: Mon Mar 28, 2016 11:09 pm

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by dacalo »

I have a slightly different view. I don't see VTI or VTSAX (or any other index funds) as a haystack. Rather, I see it as a stack of different materials. Some are more flammable than others in this environment, and if you pick something that is more flammable, then it might not end well, so WHY NOT own a pile of different materials rather than hoping some materials (single stocks) you pick will not "burn"?
User avatar
abuss368
Posts: 21599
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by abuss368 »

I purchased more Total Stock Index this week.
John C. Bogle: “Simplicity is the master key to financial success."
User avatar
William Million
Posts: 693
Joined: Wed May 05, 2010 4:41 am
Location: A Deep Mountain

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by William Million »

I like indexes because, among other advantages, losers can only decrease by 100%, winners can grow by much more. So a combination of winners and losers not a bad thing.
Topic Author
Prettyfrtnt
Posts: 212
Joined: Fri Aug 23, 2019 6:28 pm

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by Prettyfrtnt »

This guy hasn’t put down the blowtorch yet. People seem to be coming around that indexing isn’t smart right now. It’s rather painful. Indexes all in the red. Individual stocks that are covid compatible deflecting the pain keeping things in the positive.
MotoTrojan
Posts: 10659
Joined: Wed Feb 01, 2017 8:39 pm

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by MotoTrojan »

If all companies were valued equally (let's say price / earnings) and then the pandemic hit, then yes I would want to buy shares of companies I thought would fair better.

Nothing you have stated is unknown to the market. It is priced in.

The real question is, do you think Amazon will do even better than expected, and Ford will do even worse than expected? That is a bet, not a given.
MotoTrojan
Posts: 10659
Joined: Wed Feb 01, 2017 8:39 pm

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by MotoTrojan »

Prettyfrtnt wrote: Thu May 14, 2020 9:45 am This guy hasn’t put down the blowtorch yet. People seem to be coming around that indexing isn’t smart right now. It’s rather painful. Indexes all in the red. Individual stocks that are covid compatible deflecting the pain keeping things in the positive.
And what happens if/when things improve and you don't move to the beaten down companies in time? I'll tell you... the market rebounds, and your safe-havens fall back in-line with their pre-crisis trend. You have to time this trade well twice to profit long-term.
whereskyle
Posts: 1265
Joined: Wed Jan 29, 2020 10:29 am

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by whereskyle »

Prettyfrtnt wrote: Thu May 14, 2020 9:45 am This guy hasn’t put down the blowtorch yet. People seem to be coming around that indexing isn’t smart right now. It’s rather painful. Indexes all in the red. Individual stocks that are covid compatible deflecting the pain keeping things in the positive.
Just as always, buying VTI is the most sane decision. Every purchase devotes more money to the stocks that are good now, giving the buyer downside protection. Every purchase also gives you, albeit in lower amounts, all the stocks that are bad now, giving the buyer plenty of upside. And just like always, the good stocks are priced higher, so more of your money goes to downside protection, but you still are taking some risk by buying stocks with long-term upside. What approach to portfolio construction do you recommend investors take apart from investing in a group of assets that gives short-term protection and another group that gives long-term upside? Buying VTI seems just as sane to me as it always does!
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle
User avatar
HomerJ
Posts: 15170
Joined: Fri Jun 06, 2008 12:50 pm

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by HomerJ »

Prettyfrtnt wrote: Thu May 14, 2020 9:45 am This guy hasn’t put down the blowtorch yet. People seem to be coming around that indexing isn’t smart right now. It’s rather painful.
Owning stocks is sometimes painful. Still smarter to own an index though instead of trying to pick stocks.

Stocks are a long-term investment. Why is that hard to understand?

The 9%-10% nominal long-term annual gain of the total stock market INCLUDES the crashes. Read that again.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”
User avatar
Taylor Larimore
Advisory Board
Posts: 29960
Joined: Tue Feb 27, 2007 8:09 pm
Location: Miami FL

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by Taylor Larimore »

Prettyfrtnt wrote:Why own a haystack (VTI) when someone has a blowtorch? Even Cramer says only a few will survive in many sectors.
Prettyfrtnt:

Dr. William Bernstein, a neurologist who retired early and became a highly respected author and advisor to millionaires, wrote:
"When you buy the market, you are hiring the aggregate judgment of the most brilliant and well-informed minds in finance."
Below are additional quotes from respected authorities:

What Experts Say About Total Market Index Funds

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "Never think you know more than the market. Nobody does." -- "In my view, owning the market and holding it forever is the ultimate strategy for winners."
"Simplicity is the master key to financial success." -- Jack Bogle
dziuniek
Posts: 869
Joined: Mon Jul 23, 2012 2:54 pm
Location: Corrupticut

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by dziuniek »

You might want to be buying the losers then - when you feel like they dropped a lot.
BigJohn
Posts: 1895
Joined: Wed Apr 02, 2014 11:27 pm

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by BigJohn »

Prettyfrtnt wrote: Thu May 14, 2020 9:45 am This guy hasn’t put down the blowtorch yet. People seem to be coming around that indexing isn’t smart right now. It’s rather painful. Indexes all in the red. Individual stocks that are covid compatible deflecting the pain keeping things in the positive.
So, did you see this coming so you could buy just the COVID compatible stocks in January? What are you buying now, all the highly valued the COVID winners or the potentially undervalued loser that are on sale? Once this crisis is winding down, how will you chose what to sell/buy and when?

Picking the winners always looks easy in hindsight but using hindsight to buy for the future is risky. As someone said above, you have to out smart the experts that do this for a living twice (getting and getting out). There’s lots of data out there like the SPIVA report that says doing that is more luck than skill and almost impossible to do routinely over time.
bltn
Posts: 881
Joined: Mon Feb 20, 2017 9:32 pm

Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by bltn »

HomerJ wrote: Fri Apr 03, 2020 1:23 pm
The Broz wrote: Fri Apr 03, 2020 12:42 pm There are always winners and losers in business. The idea of owning everything is so that you don't have to guess the winners, and just hope you are right. Owning everything means you are guaranteed to own the winners, and their value is theoretically infinite. Sure - you own losers too, but they can only go to zero.
Owning the full market is simply a bet on the success of American business over the long term. Nothing more - nothing less.
This. Good post.
I agree.
Very nicely stated.

Rereading Dr Bernstein s investment booklet of advice for millennials, he mentions that over the previous 10 years, the S and P 500 Index funds beat 89% of actively managed funds. Go back 20 years and the percentage probably approaches 95. Over a 20 year investing career, trying to pick stock funds in the top 5% was well beyond my capabilities. I m glad I realized that after 10-12 years of trying to beat the market.
Topic Author
Prettyfrtnt
Posts: 212
Joined: Fri Aug 23, 2019 6:28 pm

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by Prettyfrtnt »

Update: zoom, 3M, Amazon, Costco, Tesla, Apple, QQQ has really smoked the vti... so glad I doubled down on individual equities Last few months. Vti is seriously not able to make money last couple years, sad looking at its Morningstar lately... starting to make VXUS look decent...
cogito
Posts: 152
Joined: Fri Nov 30, 2018 2:12 am

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by cogito »

Prettyfrtnt wrote: Thu Jun 25, 2020 12:20 am Update: zoom, 3M, Amazon, Costco, Tesla, Apple, QQQ has really smoked the vti... so glad I doubled down on individual equities Last few months. Vti is seriously not able to make money last couple years, sad looking at its Morningstar lately... starting to make VXUS look decent...
Must be indicative of future returns. I would lever up, you'll get rich. 2 months can't be wrong, r/wallstreetbets may have some great advice on how to 5x your strategy! :sharebeer
Affable at 50
Posts: 54
Joined: Fri Dec 27, 2019 2:34 am

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by Affable at 50 »

cogito wrote: Thu Jun 25, 2020 12:31 am
Prettyfrtnt wrote: Thu Jun 25, 2020 12:20 am Update: zoom, 3M, Amazon, Costco, Tesla, Apple, QQQ has really smoked the vti... so glad I doubled down on individual equities Last few months. Vti is seriously not able to make money last couple years, sad looking at its Morningstar lately... starting to make VXUS look decent...
Must be indicative of future returns. I would lever up, you'll get rich. 2 months can't be wrong, r/wallstreetbets may have some great advice on how to 5x your strategy! :e
OP, congratulations on the gains you achieved the last months. The more challenging thing is to do it long term because it is very hard and few individual investors are able to do it. Funds like VTI, VOO, VTSAX, and their low cost equivalents from other fund families remain the surest way to earn a fair share of the stock market returns over the long run in an easy to follow, tax efficient manner. The vast majority of BH investors appreciate the simplicity.

If you can beat sad, old VTI over the long run :sharebeer
whereskyle
Posts: 1265
Joined: Wed Jan 29, 2020 10:29 am

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by whereskyle »

Prettyfrtnt wrote: Thu Jun 25, 2020 12:20 am Update: zoom, 3M, Amazon, Costco, Tesla, Apple, QQQ has really smoked the vti... so glad I doubled down on individual equities Last few months. Vti is seriously not able to make money last couple years, sad looking at its Morningstar lately... starting to make VXUS look decent...
I bought VTI in late March and it's up over 30% over 3 months. That and I bear no risk that my portfolio will fail. Please let us know when you have exited your positions in Zoom, 3m, Amazon, Costco, Tesla, and Apple. I hope for your sake that you exit right before they are not good stocks anymore. I don't expect you have any idea when you should exit those positions though. That's why I think you're just trolling. If you want to share when you made your purchases and sales because you think it might be helpful to any of us, please do. The problem for me is that, even if you did show us, how would we use this information to benefit us in the future? That's why you're just trolling, helping no one, and potentially endangering other people's money. Please see yourself out and come back when you want help getting your finances in order for long-term success.
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle
GrowthSeeker
Posts: 884
Joined: Tue May 15, 2018 10:14 pm

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by GrowthSeeker »

Phineas J. Whoopee wrote: Sun Apr 05, 2020 7:49 pm Does the thread title translate to Do you want to own the whole metaphor when someone can make up a contradictory metaphor?

Sometimes I use a metaphor to help convey a concept, but I keep my personal investing reasoning off the metaphorical plane.

PJW
Good point.
Analogies sometimes help for gaining insight into a situation, but they are rarely a good enough fit to form the basis for a serious decision. An analogy is not a very effective form of persuasion.
Having said that, here is my contradictory metaphor.

Why own a haystack when someone has a blowtorch?
Because the needles are also made out of hay.
Just because you're paranoid doesn't mean they're NOT out to get you.
Blue456
Posts: 1018
Joined: Tue Jun 04, 2019 5:46 am

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by Blue456 »

Prettyfrtnt wrote: Fri Apr 03, 2020 12:23 pm Why own a haystack (VTI) when someone has a blowtorch? Even Cramer says only a few will survive in many sectors.
I hope you know that VTI is not the haystack.
User avatar
midareff
Posts: 7140
Joined: Mon Nov 29, 2010 10:43 am
Location: Biscayne Bay, South Florida

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by midareff »

Prettyfrtnt wrote: Fri Apr 03, 2020 12:23 pm Questioning my bogelhead core ideals. Generally we want diversification. It is a benefit. Are we sure it is a benefit during a pandemic.

Won’t there be obvious winners and losers?

Winners: 3M, Costco, Zoom, Amazon... others I will not share here. I feel I have as a physician very specific epidemic knowledge ahead of the market.

Losers: Ford, GM, many more.

Is anyone starting to think they are smarter than the market? The market has been fairly dumb.

Why own a haystack (VTI) when someone has a blowtorch? Even Cramer says only a few will survive in many sectors.
Ahhh... Cramer the entertainer in the hearts and minds of the viewers. It seems a well established statistic that over a ten year period the S&P 500 (or Total Stock Market) will outperform 82% (or more) of all actively managed funds. ... which of course are run by professional stock pickers with all the resources in the world to wield that blow torch. The primary problem of course is identifying the 18% in advance. There is also that thing they call luck. Back in the late 1990's there was a fund LMVTX (Legg Mason Value Trust now known as ClearBridge Value) managed by "Legend" Bill Miller who beat the S&P500 17 years running, until he didn't. .. and in fact tanked so badly after that loosing his investor's gains and more he retired embarrassed a few years later. If we follow LMVTX from 1982 to now, including the period he bested the S&P 17 years running, your gains from 1982 would be 4626% ... unfortunately, if you stuck with the S&P through the entire period your gains would be 6371%. LOL, not to mention (well, OK I mentioned) Buffet's winning bet on the S&P against a basket of hedge funds for ten years. I'm thinking you would be better off staying with your doctoring and leaving the blow torch stuff alone.
austin757
Posts: 139
Joined: Wed Jun 06, 2018 11:48 am

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by austin757 »

Prettyfrtnt wrote: Thu Jun 25, 2020 12:20 am Update: zoom, 3M, Amazon, Costco, Tesla, Apple, QQQ has really smoked the vti... so glad I doubled down on individual equities Last few months. Vti is seriously not able to make money last couple years, sad looking at its Morningstar lately... starting to make VXUS look decent...
Thanks for the update. I was having trouble sleeping thinking about it.
Nowizard
Posts: 3019
Joined: Tue Oct 23, 2007 5:33 pm

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by Nowizard »

Not something we will bet the haystack on, but we do sometimes dabble with 2-3% of our assets. In the recent months, we have added more Amazon that is currently up very significantly from its yearly lows when we purchased. Similarly, purchased Intuitive Surgical when elective surgeries were discontinued, also feeling short-term purchases of DaVinci systems would drop. It is currently up quite significantly as well. I am in the camp of feeling there are market circumstances that affect individual stocks more than the overall market and that this is one of those times even though also expecting we will test March lows eventually. You buy your ticket and take your chances.

Tim
chambers136
Posts: 266
Joined: Tue Feb 28, 2017 9:49 am

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by chambers136 »

Prettyfrtnt wrote: Thu Jun 25, 2020 12:20 am Update: zoom, 3M, Amazon, Costco, Tesla, Apple, QQQ has really smoked the vti... so glad I doubled down on individual equities Last few months. Vti is seriously not able to make money last couple years, sad looking at its Morningstar lately... starting to make VXUS look decent...
Pretty sweet how you added Tesla, Apple, QQQ to your list after seeing their results over the past months....
zeal
Posts: 246
Joined: Tue Dec 11, 2018 4:28 pm

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by zeal »

I like the analogy...

I would rather own the haystack, especially if someone is going to take a blowtorch to it.

If someone takes a blowtorch to it, which one is more likely to contain a needle:
  • a haystack, or
  • a handful of hay picked from a random spot within the haystack?
With the haystack, you're left with a hot needle... With the handful? High chance of owning nothing but third degree burns at the end of blowtorch day.

And don't kid yourself--if the people who are watching and sifting through the haystack on a daily basis (fund managers) don't know where the needle is, you definitely don't.
RetiredNewbie
Posts: 47
Joined: Sun Dec 10, 2017 7:52 am
Location: Southeast Virginia

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by RetiredNewbie »

whereskyle wrote: Thu Jun 25, 2020 5:37 am Please let us know when you have exited your positions in Zoom, 3m, Amazon, Costco, Tesla, and Apple.
I hope yall don't mind a newbie question. Can you always sell your individual stocks? Is it possible that they could drop so far in price that no one would want to buy them from you, and you'd be stuck with them?
Your attitude about risk changes significantly when the bear begins to maul you.
User avatar
warowits
Posts: 460
Joined: Tue Sep 29, 2015 2:38 am

Re: Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by warowits »

RetiredNewbie wrote: Thu Jun 25, 2020 11:13 am I hope yall don't mind a newbie question. Can you always sell your individual stocks? Is it possible that they could drop so far in price that no one would want to buy them from you, and you'd be stuck with them?
Stocks listed on an exchange are almost always highly liquid, and can be sold readily (but maybe not at the price you want). As a company heads towards bankruptcy they can get delisted from the exchange, making them more difficult to sell, but not impossible. Eventually someone is holding the stock when the value goes to zero, but that person is rarely concerned about being "stuck" owning the stock, and more concerned about the 100% loss they took.
Post Reply