Any of you trade just a little as a hobby?

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Ron Scott
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Any of you trade just a little as a hobby?

Post by Ron Scott » Sat Nov 18, 2017 11:49 am

This might be like asking people at an AA meeting over for a drink but it IS an investing forum so...

I've made no secret that up to 85% of my NW was in a single stock for almost 20 years (company stock) and even post-NUA I'm still at around 17%, BUT I've never traded anything else.

Do you do it? Couple bucks, instead of Vegas? How's it going?
Retirement is a game best played by those prepared for more volatility in the future than has been seen in the past. The solution is not to predict investment losses but to prepare for them.

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midareff
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Re: Any of you trade just a little as a hobby?

Post by midareff » Sat Nov 18, 2017 11:54 am

I moved on from that "game" about the same time I moved on from the Motley Fool, some 20 years ago. On occasion I do play with sector funds in my Roth but have now convincingly proven being lucky is better than being smart, so I may have to go mainstream with Total US and Total Int in there soon.

DrGoogle2017
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Re: Any of you trade just a little as a hobby?

Post by DrGoogle2017 » Sat Nov 18, 2017 11:57 am

I do but on a small account, not my retirement account. When I was working, I used to trade everyday, my job was boring and that’s the reason. I made 100% on my small account. I thought when I retire I would indulge in my favorite hobby, not so. I trade sporadically now. But did become a little active when I got 70 free trades. I will make money with free trades :D. The trick is I babysit my trade, when it turns the opposite direction, I close my trade. When the traders from NYC come back from lunch, I know they will drive up the trade, it’s almost like clockwork.
It’s a form of gambling I know, few people like to admit it.
Last edited by DrGoogle2017 on Sat Nov 18, 2017 12:03 pm, edited 2 times in total.

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Watty
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Re: Any of you trade just a little as a hobby?

Post by Watty » Sat Nov 18, 2017 11:58 am

I did some during the dot com days and learned my lesson.

One thing to watch out for is that the worst thing that could happen is if you take some "play money" and do very well then there will be a real risk that you will start investing recklessly with more of your money.

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Re: Any of you trade just a little as a hobby?

Post by sailaway » Sat Nov 18, 2017 12:00 pm

I have a motif account, but I don't play with it. I just buy a motif and let it stew. I don't even buy into the updates. It is about 5% of my personal net worth, 2% of our joint networth. I had stopped contributing, but the set a minimum balance earlier this year, so I threw in some more rather than selling.

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Re: Any of you trade just a little as a hobby?

Post by quantAndHold » Sat Nov 18, 2017 12:01 pm

Some work friends and I each put $1000 into a Robinhood account, and had a contest to see who could do the best with it over the course of a year. The year just ended in October.

I won.

I beat the S&P 500, but just barely. Nobody else actually did better than they could have done with an index fund. One guy was negative for the year, even though the market was up strongly.

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Re: Any of you trade just a little as a hobby?

Post by bogglizer » Sat Nov 18, 2017 12:18 pm

I used to play with options, because the lottery was too risky.

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Re: Any of you trade just a little as a hobby?

Post by montanagirl » Sat Nov 18, 2017 12:25 pm

I did some trading when the market was real volatile in 2008-2009. Valuations were so low...I made a little money that I put in my IRA. I don't see the same kind of opportunity at present.

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Re: Any of you trade just a little as a hobby?

Post by whodidntante » Sat Nov 18, 2017 1:37 pm

I do tactical allocation but in the form of tilts, not sell everything to buy the other things. For example I started over weighting EM value after the Chinese market was cut in half in 2015/2016. I'm still maintaining my overweight but I have needed to trim it as it outperformed the rest of my portfolio. I am prone to value traps/falling knifes and that could have been one but it worked out nicely.

I do not currently have an interest in holding single stocks.

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Re: Any of you trade just a little as a hobby?

Post by tibbitts » Sat Nov 18, 2017 1:45 pm

No, never even tempted. I do many hundreds of exchanges every year in my mutual fund accounts, $100 here and there, and that's kind of a game, aiming for that .1 percent gain vs. doing nothing. Sadly I have no way to calculate my results down to anywhere near that precision, so I just declare victory and move on.

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Re: Any of you trade just a little as a hobby?

Post by oldcomputerguy » Sat Nov 18, 2017 1:59 pm

Ron Scott wrote:
Sat Nov 18, 2017 11:49 am
This might be like asking people at an AA meeting over for a drink but it IS an investing forum so...

I've made no secret that up to 85% of my NW was in a single stock for almost 20 years (company stock) and even post-NUA I'm still at around 17%, BUT I've never traded anything else.

Do you do it? Couple bucks, instead of Vegas? How's it going?
Funny you should ask. Over the past few months I have collected a few bucks in credit card rewards in my Fidelity account, so I decided to use them as "play money" and so began looking around at individual stocks and ETFs. After using Fido's stock screener and their ETF screener, I finally concluded that I just couldn't bring myself to dump that money into those types of "investments", so I ended up pushing it out to my checking account to cover holiday expenses. Go figure. :?
It’s taken me a lot of years, but I’ve come around to this: If you’re dumb, surround yourself with smart people. And if you’re smart, surround yourself with smart people who disagree with you.

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BenfromToronto
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Re: Any of you trade just a little as a hobby?

Post by BenfromToronto » Sat Nov 18, 2017 2:39 pm

Yes, it is like gambling.
However, after I got converted to a strategy of buying and holding the entire market, it was very hard for me "to do nothing."
Watching my wealth grow slowly as the market went up (and down), felt like watching a tree grow.

So, about 20 years ago, to resist the urge of doing something, I took about 1% of my net wealth and started to invest in some individual stocks in a taxable Fidelity Brokerage account.
I followed a system.
I would invest about $3,000 per position so that my cost --the commissions for buying and selling-- would be relatively low. Early on, I paid $19.95 per trade; I now invest $5,000 per position and at $4.95 per trade, the cost for buying and selling is 0.2%.
Following both a contrarian philosophy and Peter Lynch's advice, I would buy out of favor major companies I liked (e.g., FedEx in 1999 or Disney in 2002).
I would add another $1,000 (now $1,666) if the stocks declined by 33% and another $750 (now $1,250) if the stock declined another 25%, for a maximum exposure of $4,750 (now $6,916).
Because of my buy and hold forever conviction, I would ride a stock down to $0 and get a tax loss (it happened a few times; e.g., K-Mart or AMR) or I would sell half every time I had doubled my money (including reinvested dividends) (i.e., when a position hit $6,000, now $10,000).
I have also used this account to make charitable gift of appreciated stocks.
Realized profits would be reinvested in other stocks.

Over the years, this has worked for me.
My Fidelity account shows an annual personal rate of return ("calculated using a money-weighted formula. It measures the performance of underlying investments and takes into account fees and the size and timing of any deposits and withdrawals made during the defined time period") of 11.4% since 2003 (when they started to keep track), 8.6% over the past 10 years (vs. 7.5% for the S&P500) and 27.3% over the past year (vs. 23.6% for the S&P500).
This rate of return does not include the additional return from the tax savings due to losses.
The account is now 2% of my net wealth (with 34 positions between $390 and $9,190).

As I said, it is like gambling but it has kept me entertained and it has prevented me from trying to time the market with my serious money.
Becoming rich slowly is simple --earn, save, invest following a Bogleheads philosophy-- but it is not easy.

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Sandtrap
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Re: Any of you trade just a little as a hobby?

Post by Sandtrap » Sat Nov 18, 2017 2:46 pm

Some of my friends have "play money" and do so, but it is just not my nature.
j :D

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Re: Any of you trade just a little as a hobby?

Post by itstoomuch » Sat Nov 18, 2017 3:20 pm

It's not "hobby money" but Discretionary. :annoyed
Currently, our Discretionary Acct s (now mostly IRA) is relatively high cash. We recently bought retirement home and used various Discetionary Acct s has down payment funding. My major holding had a big run up and I took profits. I haven't found replacement stock. Nearing the end of my fiscal asset year.
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BenfromToronto
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Re: Any of you trade just a little as a hobby?

Post by BenfromToronto » Sun Dec 10, 2017 11:47 pm

As discussed in a similar thread recently, buying and selling individual stocks is a form of gambling and it is fine to do “for fun” as a hobby.

After I read Bogle’s books about 25 years ago and I got converted to a strategy of buying and holding the entire market, it was very hard for me to keep "doing nothing."
Watching my wealth change as the market went up (and down), felt like watching a tree grow.

So, about 20 years ago, to resist the urge of doing something, I took about 1% of my net worth and started to invest in some individual stocks in a taxable Fidelity Brokerage account.
I followed a system.
I would invest about $3,000 per position so that my cost --the commissions for buying and selling-- would be relatively low. Early on, I paid $19.95 per trade; I now invest $5,000 per position and at $4.95 per trade, the cost for buying and selling is 0.2%.
Following both a contrarian philosophy and Peter Lynch's advice, I would buy out of favor major companies I thought were undervalued (e.g., FedEx in 1999 or Disney in 2002).
I would add another $1,000 (now $1,666) if the stocks declined by 33% and another $750 (now $1,250) if the stock declined another 25%, for a maximum exposure of $4,750 (now $6,916).
Because of my "buy and hold forever" conviction, I would ride a stock down to $0 and get a tax loss (it happened a few times; e.g., K-Mart or AMR) or I would sell half every time I had doubled my money (including reinvested dividends) (i.e., when a position hit $6,000, now $10,000).
I have also used this account to make charitable gift of appreciated stocks.
Realized profits are piled up or reinvested in other stocks when I believe I see an apportunity (there had not been any lately).

Over the years, this approach has worked for me.
The account is now 2% of my net worth (with 34 positions between $132 and $9,080).
My overall goal is not to beat the market but to keep me entertained and busy so that I do not yield to the urge of trying to time the market with my serious money.
Still, Fidelity shows an annual personal rate of return ("calculated using a money-weighted formula. It measures the performance of underlying investments and takes into account fees and the size and timing of any deposits and withdrawals made during the defined time period") of 11.5% since 2003 (when they started to keep track), 9.0% over the past 10 years (vs. 8.3% for the S&P500) and 24.9% over the past year (vs. 22.9 % for the S&P500).
This rate of return does not include the additional return from the tax savings due to losses or from the donations.
Becoming rich slowly is simple --earn, save, invest following a Bogleheads philosophy-- but it is not easy.

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peterinjapan
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Re: Any of you trade just a little as a hobby?

Post by peterinjapan » Mon Dec 11, 2017 4:58 am

I don't trade, but I do have non Boglehead Approved® investments and I enjoy them. I even have some Bitcoin, just for the entertainment value.

retired recently
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Re: Any of you trade just a little as a hobby?

Post by retired recently » Mon Dec 11, 2017 7:45 am

I have play/gambling money that I invest with but if I lost it all it would not change our lives.

So far this year I have bought and sold TSLA puts 3 times and made a 50% return each time totalling $40K. I bought 200 shs of Edison Intl last week after the large drop as I was hoping for a quick rebound but it did not happen so I sold after two days making $2.5 per share.

I have some puts on the S&P which are down about $5k and I will probably sell those this week to offset the gains above.

I now have $54K in TSLA puts that expire in March/April...breaking even right now. Probably sell this week as we are going on a two week holiday.

Last year I think I made one trade only made $5k and the year before that no trades...so not sure if it counts as a hobby.

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Re: Any of you trade just a little as a hobby?

Post by Da5id » Mon Dec 11, 2017 8:34 am

I don't do it, but who knows, maybe someday when I'm retired I'd do it as a hobby. Rather doubt it though, not in my nature/philosophy currently. Seems mostly harmless if it is a small percentage of your assets that you are willing to have underperform the market or even willing to lose.

The real risk IMHO is actually doing too well early on in this hobby. You may then think you have deep insights nobody else shares (rather than being lucky) and put a larger percentage of your money into this "play" pool. Maybe you DO know stuff that lets you beat the market, but I'd not count on it myself. There is also the risk gamblers/lottery place face of remembering and magnifying their wins, and discounting their losses.

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Re: Any of you trade just a little as a hobby?

Post by nisiprius » Mon Dec 11, 2017 9:39 am

I've bought individual stocks about fifteen times in my life, from ages twenty to sixty. I would not call it "trading" and I would not call it a hobby. I would call it small mistakes and learning experiences. I'm slightly in the black over my lifetime.

The last time I bought an individual stock was 18 years ago, and it was GE. It wasn't really investment or speculation; it was a sentimental gesture because someone I knew had just started working at GE. Yep. That dumb.

Wait, no, that wasn't the last time. When my granddaughter was about thirteen, I bought her a single share of Target stock, with a framed stock certificate, for about three times the share price. She was completely bored by it and the only result was that I saddled her parents with some tax work because of the dividend checks for fractional dollars that keep coming in.
Last edited by nisiprius on Mon Dec 11, 2017 9:53 am, edited 1 time in total.
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Re: Any of you trade just a little as a hobby?

Post by in_reality » Mon Dec 11, 2017 9:51 am

Placing trades, any trades, makes me anxious. I hate it.

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Re: Any of you trade just a little as a hobby?

Post by wolf359 » Mon Dec 11, 2017 9:54 am

I used to trade momentum stocks before I ran into the tech meltdown. I didn't get just get a haircut. That buzz saw almost took my head off.

Now when I'm feeling adventurous, I buy MTUM for my momentum trading. Only, it's not quite trading. I have only made three purchases and have held for more than a year. It's now a small momentum factor tilt in my portfolio.

Whenever I dream of buying a hot stock that is getting mentioned on CNBC, I can generally look inside MTUM, realize that it's already there, and the urge to buy it goes away. (I already own it.)

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Re: Any of you trade just a little as a hobby?

Post by McCharley » Tue Dec 12, 2017 12:25 am

Trading is a great hobby. It encourages savings. :moneybag

I have had a Scottrade account for years. I always buy $2000 positions and sit on them until they become long term capital gains. $333/mo. is automatically paid into my account monthly -- about $4000/year, so two companies per year. I sell things that have lost value at the end of the year to tax loss harvest. I try not to sell otherwise unless I need the money or a company ceases to be a good value. Altogether it is maybe 2% of my savings.

Lately this hobby has become a lot more difficult as I am a value investor and it is hard to find good values nowadays. :(

A few years ago I downloaded all of my transactions into Excel and compared the return to an SP500 index. (Counting dividends and trade costs -- it was a bit of a hassle.) XIRR is a great tool in Excel. My returns over time were just about exactly what an SP500 index would have been.

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LittleGreenSoldiers
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Re: Any of you trade just a little as a hobby?

Post by LittleGreenSoldiers » Tue Dec 12, 2017 12:41 am

Watty wrote:
Sat Nov 18, 2017 11:58 am
I did some during the dot com days and learned my lesson.

One thing to watch out for is that the worst thing that could happen is if you take some "play money" and do very well then there will be a real risk that you will start investing recklessly with more of your money.
Been there done that. At least I was fairly young when I learned that lesson.
I now "trade just a little as a hobby" when I...
1 . Make payroll contributions to my 401K.
2. Trade out of one fund for another to re-balance my AA.

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Re: Any of you trade just a little as a hobby?

Post by panhead » Tue Dec 12, 2017 8:54 am

I used to do this in my Roth IRA with a small amount of $$, but I stopped due to a realization of the amount of work this would actually take to even have the possibility of being successful. In the end, if I recall correctly, I think I about broke even, ie, I would have been better holding the market. I am actually a bit of an outlier here as I believe that beating the market is possible, but probably not by me. It would take treating this as more than a full time job, and I would only attempt it with small or micro cap stocks (no penny stocks). I think an individual investor has a small advantage here. This would obviously be incredibly risky and I don't have the time or desire to put into this, and even if I did, I would still only do it with up to a max of 10% of my portfolio.

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Re: Any of you trade just a little as a hobby?

Post by Toons » Tue Dec 12, 2017 9:17 am

No.
I would rather ride my bike. :happy
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Re: Any of you trade just a little as a hobby?

Post by GibsonL6s » Tue Dec 12, 2017 11:20 am

Yes occasionally I test an idea I have. As an example before the election I bought a prison REIT that had a huge dividend yield and a government contract to house deportees. The thought was if Trump won with the election the REIT would benefit, if he lost, probably no huge downside. I doubled my money in about 6 months. The issue is on of time, it is fun but time consuming to mine for ideas like this.

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Re: Any of you trade just a little as a hobby?

Post by smitcat » Tue Dec 12, 2017 11:37 am

My wife likes to trade so part of our investment plan sets aside a fixed amount with which she trades.
This is separate from the bulk of our investments where we do not trade individual stocks.
Began this about 10 years back now and she now has a lot more to trade with in that account.

We agreed in the past and still agree now that we would not add to that account other than gains over time.

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Re: Any of you trade just a little as a hobby?

Post by diy60 » Tue Dec 12, 2017 12:45 pm

I will buy a stock once in a blue moon based on life's experiences, which usually results in a purchase once every 5 years or so. Certainly not a hobby. e.g. February 2016 I was stuck in traffic across from 2 gas stations when I noticed gasoline was $0.99/gal. The last time I could remember paying less than $0.99 for a gallon of gasoline was perhaps sometime before the oil embargo 40+ years ago. So the next day I purchased several oil related stocks, and just recently sold them for +100% gains. Now I'm just waiting for my next life's experience to pop up, which could be next year or could be never.

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Re: Any of you trade just a little as a hobby?

Post by dwickenh » Tue Dec 12, 2017 12:50 pm

Toons wrote:
Tue Dec 12, 2017 9:17 am
No.
I would rather ride my bike. :happy
Doesn't that mustache get caught in the pedals? :mrgreen:

Best to you Toons,

Dan
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett

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Re: Any of you trade just a little as a hobby?

Post by KlangFool » Tue Dec 12, 2017 12:57 pm

OP,

1) I keep $5,000 in a play account. If I win, I withdraw enough to keep it at $5,000. If I lost it all, I stop.

2) I aim for the small company at less than 1 billion capitalizations with the possibility of 10X to 30X return.

3) I have not found anything worthwhile to gamble for a few years.

4) I spend $2 on lottery ticket whenever the jackpot is worth than 100 million.

KlangFool

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Re: Any of you trade just a little as a hobby?

Post by All Seasons » Tue Dec 12, 2017 1:05 pm

I follow Bogle's advice on keeping a speculative account capped at 5% of my portfolio. It's not exactly super high turnover trading, but it's definitely got some positions that would raise some eyebrows as far as conservative investors are concerned.
The market portfolio is always a legitimate portfolio.

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Re: Any of you trade just a little as a hobby?

Post by Trader/Investor » Tue Dec 12, 2017 1:24 pm

If you approach trading as a hobby good luck. It should not be a hobby but a profession. Otherwise might as well go to Reno and try counting cards or find a biased single zero roulette wheel.

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Re: Any of you trade just a little as a hobby?

Post by barberakb » Tue Dec 12, 2017 3:21 pm

I usually keep about 7-8% of my portfolio in individual stocks.

Those that say it is gambling make me laugh. Not that they are wrong, but investing in the stock market at all, even in ETF's and index funds is still gambling...

Too me it is fun. I usually only have 10-15 stocks.

I have done really well on stocks like Visa but have also lost a bit on things like Go Pro.

I actually sold Walmart today after a nice gain. I usually hold stocks for several years though.

Not a day trader by any means.

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Re: Any of you trade just a little as a hobby?

Post by peterinjapan » Tue Dec 12, 2017 9:29 pm

I recently started teaching my son about stocks and investing, and gave him some "play money" ($30k that he earned over a few years) to do with what he wanted. Making mistakes, which he made, has been very educational. The [little one --admin LadyGeek] also put $10k into the Bitcoin trust and tripled is money. So it might be hard for me to teach him the proper "get rich slowly" attitude.

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Re: Any of you trade just a little as a hobby?

Post by itstoomuch » Tue Dec 12, 2017 10:09 pm

I gave ours $10k in the 90's/ 00's . Bought IBM and other Biggie's.
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo

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Re: Any of you trade just a little as a hobby?

Post by whiteprius » Tue Dec 12, 2017 10:23 pm

I used to day trade with $600,000 sometimes, looking for $250 to $1500 gain on each trade, but it was super stressful. Sure most stocks do a sine wave and so you can make money by buying at the low/selling at the top -- but the problem is that wave can move up and down randomly, e.g. if a huge purchase or sale comes in, or if some news breaks, or an analyst upgrade breaks. At the end of the day it was a game where I was completely beholden to random events and not much fun. Glad I told my broker to take my margin ability off my account and never put it back on.

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Re: Any of you trade just a little as a hobby?

Post by Sandtrap » Tue Dec 12, 2017 10:31 pm

in_reality wrote:
Mon Dec 11, 2017 9:51 am
Placing trades, any trades, makes me anxious. I hate it.
+1
I find the research and speculation fascinating. But the actual doing would ruin my "sleep factor". It would cease to become a hobby or fun. My OCD tendencies would turn it into a serious financial project. And, then I would no longer be "retired". :D

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Re: Any of you trade just a little as a hobby?

Post by whiteprius » Tue Dec 12, 2017 10:34 pm

Sandtrap wrote:
Tue Dec 12, 2017 10:31 pm
in_reality wrote:
Mon Dec 11, 2017 9:51 am
Placing trades, any trades, makes me anxious. I hate it.
+1
I find the research and speculation fascinating. But the actual doing would ruin my "sleep factor". It would cease to become a hobby or fun. My OCD tendencies would turn it into a serious financial project. And, then I would no longer be "retired". :D
Reminds me of my day trading days. Literally seven hours straight of sweaty and obsessed screen watching, with a manic feeling running through my body. Truly a horrifying way to live.

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Re: Any of you trade just a little as a hobby?

Post by technovelist » Wed Dec 13, 2017 5:42 am

I just bought some certified gold eagles and gold proof sets, with money I got from tax gain harvesting some bullion coins. Theoretically I should be able to sell them at a profit (because I got them at dealer prices), although ebay fees are pretty high so I'm going to try to find some private purchasers.

Does that count? :mrgreen:
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Re: Any of you trade just a little as a hobby?

Post by bgf » Wed Dec 13, 2017 9:17 am

i own a few individual stocks that i do not "trade"; i just add to my positions as i would any of my index holdings.

i buy call options every now and then, primarily on the stocks i already own as additional leverage when the vagaries of the market drive their prices down.

i think some people here have developed an incredibly distorted view of any form of investment other than index investing... index investing is NOT the ONLY "reasonable" investment strategy. it is a simple, cheap, tax efficient investment strategy that is likely to provide very good investment returns, but it is not the only strategy worth following.

the one negative that index investing has introduced to the investment world is that it has artificially estranged and alienated the investor from the companies that he invests in. too many index investors now are like a grocery shopper who goes to the store every sunday afteroon to buy a perfect package of plucked and butchered gleaming skinless chicken breasts. this shopper never killed a chicken and, if given the choice of killing and butchering a chicken or not eating at all, the shopper would simply choose not to eat.

there was/is a thread on here about an individual who held a substantial portion of his portfolio in berkshire hathaway. i would imagine, because he held it for a long time and berkshire has performed exceedingly well. some people here were absolutely freaking out that he held so much in "one stock." i couldn't believe it. there is some serious mental dissonance going on here at times.
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"

Grt2bOutdoors
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Re: Any of you trade just a little as a hobby?

Post by Grt2bOutdoors » Wed Dec 13, 2017 9:19 am

No trading, buy and hold.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

Da5id
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Re: Any of you trade just a little as a hobby?

Post by Da5id » Wed Dec 13, 2017 9:32 am

bgf wrote:
Wed Dec 13, 2017 9:17 am
i think some people here have developed an incredibly distorted view of any form of investment other than index investing... index investing is NOT the ONLY "reasonable" investment strategy. it is a simple, cheap, tax efficient investment strategy that is likely to provide very good investment returns, but it is not the only strategy worth following.

the one negative that index investing has introduced to the investment world is that it has artificially estranged and alienated the investor from the companies that he invests in. too many index investors now are like a grocery shopper who goes to the store every sunday afteroon to buy a perfect package of plucked and butchered gleaming skinless chicken breasts. this shopper never killed a chicken and, if given the choice of killing and butchering a chicken or not eating at all, the shopper would simply choose not to eat.

there was/is a thread on here about an individual who held a substantial portion of his portfolio in berkshire hathaway. i would imagine, because he held it for a long time and berkshire has performed exceedingly well. some people here were absolutely freaking out that he held so much in "one stock." i couldn't believe it. there is some serious mental dissonance going on here at times.
As to BRK, IMHO it was a somewhat risky strategy. Presumably Buffett's mortality is priced into the stock now, though there still may be a price shock if Buffett/Munger are still active in the business when their time comes. Had Warren Buffett had a heart attack 20 years ago, what would have happened to BRK shares? Because it feels like a fair part of the value of the company has come from Buffett/Munger's acumen rather than IP or other things that would have survived them. And while BRK is internally somewhat diversified, it is (and I think was even more so at times past) heavily weighted towards insurance business, is that necessarily the sector you want to invest? Maybe. Why, other than hindsight bias, do you think that highly concentrating in BRK rather than diversifying was the right choice? If you think highly focusing in a single company is a good idea going forward, which company are you suggesting and why?

I don't buy the butchering analogy either. But each to their own. To buy stocks individually is to make the following assertions:
1) I know something about the current pricing of the stock the market does not
2) I know something about the future course of the company the market does not

I think there are some (few) people who have the acumen to make those claims. But it clearly isn't the vast majority of us who get our rather stale/priced into the stock information from public sources. If you have some inside first-hand knowledge of a company and nonetheless are not legally an insider, OK, maybe I'd concede that you know enough to believe you know more than the market. But each to their own.

To buy an index you need to make the following assertions:
1) the stock risk premium will persist
2) you can't pick stocks that will beat the index (and you can't identify someone else who can beat it by picking for you)

For me, the second assumptions are much easier to make than the ones you need to make to pick individual stocks...

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Toons
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Re: Any of you trade just a little as a hobby?

Post by Toons » Wed Dec 13, 2017 5:39 pm

dwickenh wrote:
Tue Dec 12, 2017 12:50 pm
Toons wrote:
Tue Dec 12, 2017 9:17 am
No.
I would rather ride my bike. :happy
Doesn't that mustache get caught in the pedals? :mrgreen:

Best to you Toons,

Dan
Excellento Dan
Best,Toons :sharebeer
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

SGM
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Re: Any of you trade just a little as a hobby?

Post by SGM » Thu Dec 14, 2017 4:08 am

I never considered investing as a hobby, but as a means to complete financial independence. I still have large holdings in individual stocks that I have been winnowing down for 7 years. No individual stock makes too high a portion of the portfolio. This year we had some unusual expenses and took more long term capital gains from these individual stocks than we normally do. Roth accounts are much more simplified because we can sell the individual stocks without tax consequences. New investments have mostly gone into index funds and index ETFs. Despite this winnowing process we still have a large number of individual stocks in taxable accounts.

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M_to_the_G
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Re: Any of you trade just a little as a hobby?

Post by M_to_the_G » Thu Dec 14, 2017 8:45 am

tibbitts wrote:
Sat Nov 18, 2017 1:45 pm
No, never even tempted. I do many hundreds of exchanges every year in my mutual fund accounts, $100 here and there, and that's kind of a game, aiming for that .1 percent gain vs. doing nothing [emphasis mine]. Sadly I have no way to calculate my results down to anywhere near that precision, so I just declare victory and move on.
"Doing nothing" is a great strategy. As Jack Bogle once said, "Don't do something, just stand there!" Or as Warren Buffet once said, "Benign neglect, bordering on sloth, remains the hallmark of our investment process."
"It’s basically the plot of 'Charlie and the Chocolate Factory.' If you stick around, doing nothing, while everyone around you ****s up, you’re going to win big." - John Oliver

JimmyJammy
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Re: Any of you trade just a little as a hobby?

Post by JimmyJammy » Thu Dec 14, 2017 11:22 am

Starting near the recession lows, I developed a semi-addiction to stock trading. It was not a terrible time to do so, since you could get a big win by throwing a dart at a board of stocks.
My biggest problem was getting freaked out by my wins. When stock would double or quadruple, I'd sell it, but then have regrets when 16 months later it had returned 20X.
That said, I also had my first big loss betting on a penny biotech. I'll never do that again.

Eventually, I've ended up with about 25% of my assets in individual stocks. They're mostly FAANG stocks and large cap dividend payers.

At least I don't trade anymore. Most of my stocks are buy-and-holds picked up in 2010.

Each year, I try to swear off of them and reduce my positions, since they are a source of stress and worry.

But they also bring a dopamine rush of excitement. And they also give me a greater sense of control (however misguided). It's a difficult addiction to break.

Alas, every year since 2010, I've only managed to beat my personal benchmark, which is a simple Vanguard Retirement target fund, once. I might beat it this year, barely.

So, the biggest loss has been time.
<Sigh>

Beardog
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Re: Any of you trade just a little as a hobby?

Post by Beardog » Thu Dec 14, 2017 1:21 pm

No. My hobby is music.

I only buy and hold, waiting until I need to start using my investment portfolio for living income.

I see no problem with a disciplined investor, who can afford to do so, having a portion of money set aside for hobby investing and speculating (are those about the same thing?). But beware over confidence and recency bias. Don't let such things bleed over into serious retirement money!
Beardog

bi0hazard
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Re: Any of you trade just a little as a hobby?

Post by bi0hazard » Thu Dec 14, 2017 2:22 pm

I do not trade and have no individual stocks. However, after saving very conservatively my entire career in my 30s (stock index funds only 30-50% portfolio), I am ready for an adventure. I want to dedicate less than 0.5% of my assets to the marijuana industry (buy and hold). I have not decided between individual stocks or upcoming US ETF.

technovelist
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Re: Any of you trade just a little as a hobby?

Post by technovelist » Thu Dec 14, 2017 2:45 pm

bi0hazard wrote:
Thu Dec 14, 2017 2:22 pm
I do not trade and have no individual stocks. However, after saving very conservatively my entire career in my 30s (stock index funds only 30-50% portfolio), I am ready for an adventure. I want to dedicate less than 0.5% of my assets to the marijuana industry (buy and hold). I have not decided between individual stocks or upcoming US ETF.
Why use a derivative rather than going for physical? :mrgreen:
In theory, theory and practice are identical. In practice, they often differ.

DetroitRick
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Re: Any of you trade just a little as a hobby?

Post by DetroitRick » Thu Dec 14, 2017 3:12 pm

I trade a little, and maintain a well-diversified stock portfolio in addition to much larger fund-based portfolios. I wouldn't call it a hobby, but it does represent a fair amount of effort (research and thought). And I wouldn't do it if I didn't enjoy it. It's only one of many activities that I really enjoy.

My trading is infrequent, my goals are long-term, and my stocks are around 18% of total invested assets. Results have been fine over the decade I've been doing it, with my segment performance typically a hair better than their respective indices. But not so much better that I would consider the added work of scaling further upward in stocks. Personally, other than interest and aptitude, I think the key is broad diversification AND willingness to do the requisite work. Trying to cash in on a few short-term picks can be, as many can attest, a hit-or-miss game.

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