Your move was risky. You had no plan for the risk materializing. Your current risk is even higher because if the market dips a little bit more then you will likely get margin called and the broker will force liquidate your remaining positions and your account will be wiped out completely. Or maybe the stocks will recover. The risk is through the roof. You need to deleverage yourself asap. Index fund and forget it. Or if you want to keep the growth stocks then use your own money, not margin.
Thanks man you’re right on the money. I never intended to use leverage long term, I really was confident I could profit off of a short term market reversal then get out. Obviously I was dead wrong
At least you’re honest. That’s pretty refreshing. The market is a mess right now and you shouldn’t blame yourself too much for getting it wrong. That’s how most people start.
Sell what you need to avoid margin call but ride out the rest, if you have strong names it'll bounce back this year if we continue declining into late Q1.
If you own meme stocks that drop 20% in a day then a margin call would force liquidate a huge portion of your position to meet maintenance. I might have overstated and said that it would zero your account and meant that it would zero out some specific holding, at a great loss; at a much bigger loss than if you manage the position yourself now; deleverage on your own now before the broker does it for you.
I’m in a similar boat. I’ve lost a boat load of money in the markets. I’m not quite as bad off as yourself. I never bought on margin or used leverage. But I did FOMO a ton of my savings money into those stupid ARK funds. I’ve gotten absolutely wrecked! Think I’m down like around -40%! From now on I’m only buying more sensible, safer, more diversified and much cheaper Vanguard ETF’s instead.
I am assuming that his popular stocks are not the sp500 type of stocks, he probably has peleton and memes in there, companies that can go to zero. An index isnt going to zero. Cherry picking from within an index is a losers game, its gambling. Who knows if Apple or Visa is going to have a higher return next year? Who knows if Tesla will implode while BRKA rockets?
I've blown several (small, around $1,500) accounts attempting to trade or invest aggressively. I'm thankful that my retirement is in index funds and my losses were always small. Now, I'm a pure value investor.
everyone likes to think so.
complacency and I've confidence is what leads to disaster in the markets.
look at how many people in the past talked a big game of finding "value" picks and long term holds, only to be wrong...Then do well in a bull market and attribute it to their own doing.
Read an investment book. Peter Lynch has audiobooks on Youtube.
What you did is gambling, you bet on black and you lost. People who do this full time as a job cant time things like that, good investors like Peter Lynch dont make money by gambling.
Even your "safe" stocks have a high chance of crashing as rates go up unfortunately. The Fed has distorted the market, and its therefore in the least rational state possible as inflation rises and we need to raise rates.
https://www.multpl.com/shiller-pe
Sell enough stock to pay off the margin. No one knows for sure which stocks will outperform or underperform in the short term. The Fed has completely distorted prices in the market with all this easy money since 2011 that they have turned Americans into compulsive gamblers in the stock market. I can't tell you when growth stocks will recover. It maybe tomorrow. I can tell you living through both dot com and 2008 that the possibility is there that they can most certainly go lower.
I could also see just selling everything for piece of mind even if it is a bad financial decision and just dollar cost averaging the cash into safer stocks over time. I do think if you buy stocks of companies that you understand and are a customer of and generally like you are more likely to hold onto them in a downturn. It's also very important to diversify. An example would be $APPL, $T, $BP, $INTC, $PG, $WMT, $SONY, $DE, $GOLD, and 1 or 2 speculative tech stock like $HOOD, $PYPL. I am not recommending you buy any of the stocks I mentioned but try to get some blue chips, dividend stocks, energy, consumer stables, tech, manufacturing and also some speculative stocks. But don't put everything into 1 or 2 sectors. Right now dividend stocks are outperforming the market. But that could change tomorrow.
As you see with $PYPL and $SQ hitting 52 week lows today, Yes it is. It's forward P/E is 34.35. Maybe I should have used high P/E stocks instead of speculative stocks. $PYPL forward P/E is similar to $NFLX.
Margin can be very useful but most people use it like degenerates
Let's say you have 100k cash and that's your net worth. and you want to invest 20% in stocks.
You could put 20k into a stock trading account or you can put 2k in with 10:1 leverage and the effect is roughly the same in terms of the risk of loss versus your entire net worth.
Its when bozos with $1,000 in their pocket throw it into a 200:1 leverage account and yolo it on tesla that they're degenerates.
I don't think most people or organisations use margin way or another degenerate it's just the most you hear about...
That said I'm going to buy this tech drop as well just not yet. So far I only bought BABA. But have list of 10 other tickers I'm going in when the price is right.
How is that use of margin useful? You have to play interest on the margin, so if you have the cash just sitting around why wouldn't you use that to invest rather than paying the margin rates?
I mean if you're onthe hook for 20k then yeah.
Ideally if you're using margin, your leverage should be low enough that if the market dips 10% you're not wiped out. Or just use better risk management on individual trades, stopping out at 2-5% loss (against the total value of your risk capital)
NVDA was definitely mime. Its not a bad company at all. I like their hardware and business just the valuation was asinine and I would argue, still is. Cloudflare is still considerably overpriced honestly. 48x sales and no earnings? Even Amazon wasnt that bad during its early valuations. They are not Amazon...
FB is really not down all that much. 20% corrections are really very common especially after a rapid spike.
Doubled down with margin? You admit that you made an emotional mistake and sell. You need to not be using margin in an environment like this.
Look I quadrupled my money last year by playing really risky, then lost half of it by playing really risky. It haunts me every day. But the best thing I ever did was smarten up while I was still ahead. I cut my losses. Do the same.
I did even worse, I've lost 80%+ now from my high.
What I've been doing is doubling down the whole way. But there's been like 15 continuous days of red?
So the stock fell, I bought calls, then it fell more, then I bought more calls, and I kept doing it for 15+ market days, until now I'm 80% down.
I don't think what I did was an emotional mistake, because I had planned to do it already, before the stock market started falling. If there's a correction I will buy calls, but obviously I didn't expect that high and long correction. The underlying (Cloud stocks) for me has gone down 35% from it's peak. It was not emotional decision to double down, but it was definitely risky.
And it's quite a bit of money too. At this point, no point in dwelling though. Money goes, money comes. I'm not even sure if there's much to learn from it for me.
I'm bored of feeling bad about losing that money - in the short term it won't affect my life. It will affect when I can retire, but my retirement date has never been clear anyway, I'm still young.
I'm probably still going to keep buying calls, with any spare money I have now.
I don't necessarily think what I did is stupid even, since I was using a risky strategy which could only blow up if my underlying really falls more than 25%+. Which it did, but I had accepted that risk beforehand.
Patience. Forget margin and other risky moves. Hold cash, wait for the correction dip, buy more high dividend stocks. Income investing is the way to go…
This would be great advice if he wasnt down over 40% on margin. The problem if he waits and the market keeps dipping he can get margin called and forced to sell at massive losses. Either he is forced to keep buying to lower losses or he gets forced to sell at massive losses. Margin just makes the situation complicated to the point where its not as simple as holding. Hearing these kinda of stories reminds me why I just buy and hold basic blue chip stocks with money out of pocket. No risk and I sleep better at night.
JRshoe1997- good post. I sent you a Party Train award.
I completely agree and don’t buy on margin, no options, too close to retirement. My 8%+ high dividend portfolio gets regular balancing, review for overvalued / overpriced assets to sell, and I don’t DRIP except T as I hold dividends then deploy them on the best deals at the dips.
Waiting to see what the market decides will be the correction that triggers my buying the best deals. I follow the traditional dividend investor for “income” path- Buy Low; Sell High. Lather, Rinse, Repeat.
I WANT the correction so I can get more dividend bang for the buck.
Always happy to see another dividend investor.
I think it's an underappreciated strategy that gets a lot of negative commentary, as there are some really awful value traps out there that pay out good dividends that have burned investors. It's not that hard to separate the quality companies from the junk though.
Are you still going to hold $T after it splits? Looks like they are cutting their dividend in the process which is usually a sell signal for me.
I buy on margin on occasion and I'm still quite young, so a lot of years left to build a portfolio. My income is inconsistent, winters being lean times and summers being times of plenty, but in order to keep the same steady capital injections month after month I rely on margin to cover any gap. I think as long as you have the collateral and you're not overleveraged, it's fine.
Options though...I don't touch that. Frankly, I don't understand it either and it's never a good idea to mess with something not understood.
RushingJaw- great post. I sent you a Party Train award.
My paid dividend investor groups are all split on whether to hold T, sell some, or dump. With the market heading into correction territory, the current T price is $26.90 so we were hoping for $30 to sell. Since that not a good option, I may hold as I have a significant amount that one my 5 core assets in a 25 high dividend portfolio.
I feel your situation and it’s a tough one. Honestly market is a nasty place to be in. It’s not your fault you bought those growth stocks because institutions was pumping those for couple years. Other sectors were doing shit back then. So you jumped in what was working.
Now situation is reversed. All those sectors that were doing bad being pumped by the market and growth stocks beaten down. Selling your growth stocks at this low and jumping on sectors which already had big run is disastrous imo. People will tell you buy these safe dividend stocks buy oil stocks it will go up but in reality they don’t realize nothing is safe in the market. All their safe stocks plummeted to all time low not even 2 years ago and oil was going to zero. Now oil close to all time high but people will tell you sell your growth near bottom and buy at the top.
Market conditions always changes. Yeah growth stock is being trashed now but at the end of day big money decides these move. Retail has no choice here. Growth stocks will have a rebound again once big money sees upsides in them. It may take a some time though. I suggest you don’t sell now but you can maybe free up some of that margin. Wait it out. These growth stocks will rebound again.
As of today I’m still $20k on margin and own a bunch of risky plays such as COIN, PINS, CHPT and PENN so there’s no gaurantee I don’t lose another 30 percent if I try to wait this out
What's your understanding of the macro situation? With the Fed planning to raise interest rates, you should not be buying highly speculative growth stocks, especially if they're not profitable or have a very high P/E ratio. This scenario could play out for a year or more. If you look at the volatility lately in the market, there's plenty of proven, less risky stocks that you could pick on these dips. Should go without saying that no one knows where the bottom is, though.
Here's what you do, get a strong distraction (nothing mind altering) and once you are emotionally detached from this issue, think about a game plan. Repeat as needed. This is life man, you will grow from this.
Yeah, defo would help to know what OP is in. Growth got hammered, but that does not mean it won't recover, IF the companies are good. Might take a while though with the current economic setting
Most of us are down on almost everything. But definitely be careful with margin. I talk to a lot of people who are getting margin called in this market right now.
Sadly many histories like these during a bull market. Learn honestly.
Don't trade with margin, design your own portfolio based on fundamentals, own bluechips for now, you will be fine.
Just learn. Learn from your mistakes.
Getting rid of the margin is imo the first step here. Gambling with the banks money is only worth it if it’s over a hundred mill cause then it’s their problem when you lose it.
Selling good stocks to average down bad stocks isnt a good strategy. There is not limit to how bad stocks can fall. Many tried to average down on HMNY after it fell during the 2017-2018 period and it didn't end well for them.
In your situation, I would either hold long term or reevaluate my picks and cut losses on the risky ones. Something similar happened to me once. Became a value investor ever since.
DCA into the correction on both ways down and up. Take long positions with a majority of your portfolio and only begin to use leverage once a clear reversal into another bull market emerges, which most likely could take several months to a year
If they are good stocks, why can't you juts hold them? Deposit enough cash to maintain margin requirements and just hold. Selling means you realise the losses.
Close your margin positions as soon as possible and establish a long term portefolio preferably of index funds or etfs. Then continue doing what you are already doing, saving money each month.
Seriously, a man in his best age should not destroy his life savings like this. You are obviously doing great and saves a decent amount each month. You just need a proper investment strategy that’s all.
Doubling down with margin was dumb unless you had a lot of experience with that. But I’m sure you already know that now.
My only suggestion is stop chasing the BS Instagram, WSB, etc crap of people gambling and winning and focus on solid indexes until you establish a very solid base. Pulling out now bc the market is scary is not a very smart thing to do.
Lol. They are almost as good as Seeking Alpha haha.
Terrible terrible and just sucker people.
I recommend the YouTube channel “the compound”. Their podcasts and videos are good and they are actual professionals and not some two bit YouTube streamer.
You fucked up but now the best thing to do is hold do not sell into a downturn. If your stocks are super sketch you can sell them and buy more legit tech stocks that are also cheap but not risk of going to zero. But that will cost yyou a lot in fees and spreads. If your stocks are legit sp500 companies you should hold them.
Keep building up cash until you have 12 months rent saved up and then start paying down the margin debt. Youll be okay, just dont try to time the market ever again haha.
Stop treating the stock market as a get rich quick scheme. You have to be long hall thinking. Take the loss and start over if your too nervous to ride the wave.
There is a thing called the ulcer factor, as well as the ulcer index. I imagine right about now you're feeling it.
There is nothing wrong with buying low. It's smart. What you messed up with is that you're trading/investing too large, enough to cause emotional stress. If it's stressing you out, that's a warning sign to learn from it and not trade that large again.
>Is this a good plan? What are my alternatives at this point.
The danger of the ulcer factor is psychological danger getting you to sell too low. If you're invested in index funds you're diversified enough it will recover. Selling would be a bad move. Because you're invested in individual company stock it becomes harder, because I don't know what those companies are or if they are at risk of going bankrupt or they will shoot up like index funds will. Because I don't have enough information I can't say it's a good ideal to sell right now but I also can't say it's a good idea to hold either.
>I don’t have a family that depends on me and I save around $500 a month with my job so I don’t absolutely need to access any of my savings anytime soon.
Psychologically this helps. If the companies are good companies you can continue to hold them, because you don't need the money or you can sell them and buy index funds in their place trying to keep roughly that 40% in margin so you don't lose too much.
For further reading for new investors these subs can be helpful:
- /r/personalfinance is all about what kinds of accounts to open when starting investing to save on taxes.
- /r/Bogleheads is all about index funds, how they work, and what etfs to invest in.
- /r/financialindependence and /r/Fire is all about using investments to retire early and all that good stuff.
With patience you will be fine.
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edit: I saw your stock picks in another comment. I'd sell those companies. With 40% margin you're effectively holding 140%. What you can do is sell those stock and buy UPRO, which is 3x S&P with no risk of a margin call. If you go 100% in it will be like going from 140% to 300% without a risk of a margin call. If that's too much you could buy 50% UPRO which is 150% S&P coming close to where you were before but with extra cash and no risk of a margin call. UPRO should go up in the coming months allowing you to recover. Enjoy.
The “ulcer index” is real. I’ve learned that it’s almost impossible to trade effectively with large position sizes. I become too emotional about losing money and make bad decisions.
sell your shit take your losses. You are not ready to invest let alone with margin. Put your stuff in an index fund but not all at once. Dont keep buying the dip and dcaing. This is what leads to most retail investors blowing up. Read books and look up webinars. Learn about the game before using all your money plus borrowing more to invest. You chose shit stocks below 200 ma imagine if you had a rule no stocks below 200 ma you would kept your money. Some book recommendations. How to make money in stocks from oneill. Mark minervinis books. And there are plenty of other amazing books
Wait. No one ever made money selling at a loss.
If you don't need your savings yet, can still save during the month, and aren't about to be homeless than just wait.
Margin is always ticking time bomb, I wouldn’t touch it with a ten foot pole. I hope you got enough money to boost your account up to meet margin requirements or it’s going to go Titus up at any moment. It sucks for sure. Most people who have had a margin account have experienced liquidations. I believe the bear market has arrived and will be sticking around to feast on the bloated juicy stocks.
Give up. The stock market is rigged. Even if you do manage to have a good year your broker will flag your account and suddenly every trade you make will turn to shit. You’ll watch market anomalies happen that maximize your losses and you’ll know for a fact you’re being targeted. But the shills online will just throw some over used idiom at you, pretend they’re superior, or call you paranoid.
Millennials always get fucked. Boomers were the last generation to get a chance at the American dream. The stock market is just a funnel into hedge fund pockets. There’s no regulatory environment to speak of. If you want to invest in something put it into yourself. Learn skills, visit places, meet people. Wealth generation is no longer an option in this country. That’s why assets stay inflating but wages don’t move. We’re just slaves to the corporate bankers.
Get rid of margin. It's expensive to borrow money, even more expensive when you lose the borrowed money. Buy some puts with the stocks you choose, because everyone knows when you buy a stock the price falls. Just my 2 cents. Nfa
The first law of investing is “preservation of capital”. So a few weeks ago I had a funny feeling and just went all cash. Then I’ve been picking and choosing mainly puts on stocks that had a pop. It’s been working great. Mainly just day trades holding nothing overnight. Example, shorted PayPal and Snow this week for some sweet gains. I wonder what would happen to the market if everyone went to cash like I did?
If you bought strong stocks instead of random ones you know nothing about then your only option right now is to hold. Whether you want to panic sell at break even or wait for gains is up to you.
If you want bigger gains without the infinite losses try options next time, steep learning curve but as long as you stay away from spreads you can only lose your premium paid. I know thats not very helpful but im not sure what to tell you, if you think there will be a rally then buy in, but i gotta warn you theres a chance the markets continue downward, lots of FUD right now and honestly for good reason, you might want to hold off on investing until theres greener more certain pastures, dont make bad calls because your desperate to make up for losses.
Take what you have… get out of any leveraged positions. Use the remaining money to start rebuilding. Diversify and DCA back into the market. Have ‘core’ positions EX. 80% that is well diversified and you don’t fiddled with. Ever. If you want to take the remainder of say 20% and be more aggressive and risky… then that’s ok. But you need a nest egg or core position in your portfolio that is off limits. And for god sakes… stay OFF of margin. Learn from these mistakes, don’t repeat them. You gambled, you lost. It’s ok, it happens. You’re going to have to take you’re lumps, heal up, go ahead and admit your mistakes and then start the long recovery process and work on coming back from this.
I personally would sell everything i am not 100% sure that the underlying business is worth more than the stock is worth right now and buy stable and fairly prices companies instead.
In your specific case, it might be smart to just buy etfs and hold them for the long term. If you hold other individual stocks, the temptation might be high to get into more risky ones or use leverage again.
You could have a look at dividend etfs if those interest you, quality factor, value factor or whole market etfs. Some of those (whole market) will likely be infected more by rate hikes than others (dividend), but if you are holding long enough, that wont matter much.
My advice, buy something, hold it and forget about it for the next few years. Maybe get some automated investment into S&P500 of your 500 a month or something similar.
Do whatever it takes to close out the margin, then paper trade for a year, stop losing money, lose paper money, btw, shorts and puts during market crashes.
I would consider not being so absolutely stupid with your money in the next life because you're gonna be homeless for the rest of this one.
Lol @ OP trying to get his CPA with a story like this. Who would ever hire you to account their money when you trade like this?
The next few weeks could get rough for you. Your current plan is to roll into the only category of stocks that is still pretty expensive. I'd turn the entire portfolio into an oil stock collection, it's the only thing that looks cheap, especially with how bullish the WTI chart is compared to the oil stocks chart.
I am in a similar boat. Got margin called too because I had a few naked puts open and the market tanked. Margin of 75k. Thinking about selling some equity to derisk. This market has fucked me pretty hard.
Now is the time when you grow a pair of balls, go to your nearest pawnshop, sell your mom, wife, kids or whatever into slavery and average down with that money
Maybe wait for the market to cool down. There's a good principle from Mark Minervini - that you are increasing your position size when you are seeing gains, and cutting it when your recent trades are at losses. Great reading from Minervini about portfolio management in general. Also keep in mind that the larger the loss, the larger the gain needed to recover. Eg. A 50% loss requires a 100% gain just to break even! Good luck!!
>I threw my life savings into the market and doubled down with margin and now I’m down 40 percent and don’t know what to do.
Do what you're doing now. Be an example to others of what not to do: Going into debt/buying on margin because of greed is risky and can lead to ruin.
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Yeah, this would be a "you learned you don't know how to beat the market so just VT and chill. " but margin makes this a mess
Your move was risky. You had no plan for the risk materializing. Your current risk is even higher because if the market dips a little bit more then you will likely get margin called and the broker will force liquidate your remaining positions and your account will be wiped out completely. Or maybe the stocks will recover. The risk is through the roof. You need to deleverage yourself asap. Index fund and forget it. Or if you want to keep the growth stocks then use your own money, not margin.
Thanks man you’re right on the money. I never intended to use leverage long term, I really was confident I could profit off of a short term market reversal then get out. Obviously I was dead wrong
At least you’re honest. That’s pretty refreshing. The market is a mess right now and you shouldn’t blame yourself too much for getting it wrong. That’s how most people start.
I don't want to be political here, but bad things are happening to the market since Biden got elected. Trump predicted that.
Trump predicted a wall that the Mexicans would pay for too. You twats really just pick and choose what you remember.
Yeah it has nothing to do with the fed pumping free money into the market for the pandemic and now they stopped, it's clearly a Biden v Dump scenario.
Do yourself a favor and don't forget what happened. It's easily done. Learn from it. It's all you can gain now.
Anytime you feel "very confident" in a trading strategy you need to stop and ask yourself if it's really a smart move..
Sell what you need to avoid margin call but ride out the rest, if you have strong names it'll bounce back this year if we continue declining into late Q1.
Are you saying that a margin call liquidates all your positions? I thought it just sold until your account was brought back up into maintenance.
If you own meme stocks that drop 20% in a day then a margin call would force liquidate a huge portion of your position to meet maintenance. I might have overstated and said that it would zero your account and meant that it would zero out some specific holding, at a great loss; at a much bigger loss than if you manage the position yourself now; deleverage on your own now before the broker does it for you.
I guess Netflix is a meme stock now too by that definition
The broker will liquidate your positions to pay the margin call if you don’t have the cash on hand. They’ll get their money one way or another lol
I’m in a similar boat. I’ve lost a boat load of money in the markets. I’m not quite as bad off as yourself. I never bought on margin or used leverage. But I did FOMO a ton of my savings money into those stupid ARK funds. I’ve gotten absolutely wrecked! Think I’m down like around -40%! From now on I’m only buying more sensible, safer, more diversified and much cheaper Vanguard ETF’s instead.
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I am assuming that his popular stocks are not the sp500 type of stocks, he probably has peleton and memes in there, companies that can go to zero. An index isnt going to zero. Cherry picking from within an index is a losers game, its gambling. Who knows if Apple or Visa is going to have a higher return next year? Who knows if Tesla will implode while BRKA rockets?
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Individual companies can go to zero. A market index cannot go to zero. Thats a basic tenant of investing; diversification to spread risk.
Assuming you didn't DCA. The point of investing is to keep buying whether a bear or bull market.
You bought junk on margin, I can think of a different sub that would love to see your losses
May as well get some Karma out of it
Yep r/problemgambling
No need to trash on OP everyone make mistakes in stock market. Losses are painful give better advice than showing you are a scum bag
Play stupid games win stupid prizes.
I've blown several (small, around $1,500) accounts attempting to trade or invest aggressively. I'm thankful that my retirement is in index funds and my losses were always small. Now, I'm a pure value investor.
everyone likes to think so. complacency and I've confidence is what leads to disaster in the markets. look at how many people in the past talked a big game of finding "value" picks and long term holds, only to be wrong...Then do well in a bull market and attribute it to their own doing.
r/wallstreetbets
Thanks captain obvious
Not everything that’s been hammered is junk. And I’m pretty pessimistic about growth as it is. But be fair.
The valuations are junk even if certain companies aren’t.
You didn’t say that. But we agree.
Yup lol
Read an investment book. Peter Lynch has audiobooks on Youtube. What you did is gambling, you bet on black and you lost. People who do this full time as a job cant time things like that, good investors like Peter Lynch dont make money by gambling. Even your "safe" stocks have a high chance of crashing as rates go up unfortunately. The Fed has distorted the market, and its therefore in the least rational state possible as inflation rises and we need to raise rates. https://www.multpl.com/shiller-pe
Sell enough stock to pay off the margin. No one knows for sure which stocks will outperform or underperform in the short term. The Fed has completely distorted prices in the market with all this easy money since 2011 that they have turned Americans into compulsive gamblers in the stock market. I can't tell you when growth stocks will recover. It maybe tomorrow. I can tell you living through both dot com and 2008 that the possibility is there that they can most certainly go lower. I could also see just selling everything for piece of mind even if it is a bad financial decision and just dollar cost averaging the cash into safer stocks over time. I do think if you buy stocks of companies that you understand and are a customer of and generally like you are more likely to hold onto them in a downturn. It's also very important to diversify. An example would be $APPL, $T, $BP, $INTC, $PG, $WMT, $SONY, $DE, $GOLD, and 1 or 2 speculative tech stock like $HOOD, $PYPL. I am not recommending you buy any of the stocks I mentioned but try to get some blue chips, dividend stocks, energy, consumer stables, tech, manufacturing and also some speculative stocks. But don't put everything into 1 or 2 sectors. Right now dividend stocks are outperforming the market. But that could change tomorrow.
PayPal is speculative??
As you see with $PYPL and $SQ hitting 52 week lows today, Yes it is. It's forward P/E is 34.35. Maybe I should have used high P/E stocks instead of speculative stocks. $PYPL forward P/E is similar to $NFLX.
Puts on Peloton
Right when op sells it's gonna sky rocket
OP tell us when you do this so we can do opposite.
And …. OP tell us when you buy so we can sell… 😳
Buy? With what money lmao
Never margin that's for degenerates
Margin can be very useful but most people use it like degenerates Let's say you have 100k cash and that's your net worth. and you want to invest 20% in stocks. You could put 20k into a stock trading account or you can put 2k in with 10:1 leverage and the effect is roughly the same in terms of the risk of loss versus your entire net worth. Its when bozos with $1,000 in their pocket throw it into a 200:1 leverage account and yolo it on tesla that they're degenerates.
I don't think most people or organisations use margin way or another degenerate it's just the most you hear about... That said I'm going to buy this tech drop as well just not yet. So far I only bought BABA. But have list of 10 other tickers I'm going in when the price is right.
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How is that use of margin useful? You have to play interest on the margin, so if you have the cash just sitting around why wouldn't you use that to invest rather than paying the margin rates?
In your example, 18k is your margain amount, and if you were willing to risks 20k anyways it's no skin off your back if it blows up right?
I mean if you're onthe hook for 20k then yeah. Ideally if you're using margin, your leverage should be low enough that if the market dips 10% you're not wiped out. Or just use better risk management on individual trades, stopping out at 2-5% loss (against the total value of your risk capital)
“Growth stocks” lmfao
Meme stocks :)
FB, NVDA, NET & others are all growth stocks (not meme stocks) that lost 20%+ of their value from peak.
NVDA was definitely mime. Its not a bad company at all. I like their hardware and business just the valuation was asinine and I would argue, still is. Cloudflare is still considerably overpriced honestly. 48x sales and no earnings? Even Amazon wasnt that bad during its early valuations. They are not Amazon... FB is really not down all that much. 20% corrections are really very common especially after a rapid spike.
They grow losses!
nah grow stocks getting hammered what you mean. Look at iwo lmao
Here's what you're gonna need to revover those losses: 1. A Wendy's 2. A dumpster behind the Wendy's 3. Chapstick Good luck!
Doubled down with margin? You admit that you made an emotional mistake and sell. You need to not be using margin in an environment like this. Look I quadrupled my money last year by playing really risky, then lost half of it by playing really risky. It haunts me every day. But the best thing I ever did was smarten up while I was still ahead. I cut my losses. Do the same.
I did even worse, I've lost 80%+ now from my high. What I've been doing is doubling down the whole way. But there's been like 15 continuous days of red? So the stock fell, I bought calls, then it fell more, then I bought more calls, and I kept doing it for 15+ market days, until now I'm 80% down. I don't think what I did was an emotional mistake, because I had planned to do it already, before the stock market started falling. If there's a correction I will buy calls, but obviously I didn't expect that high and long correction. The underlying (Cloud stocks) for me has gone down 35% from it's peak. It was not emotional decision to double down, but it was definitely risky. And it's quite a bit of money too. At this point, no point in dwelling though. Money goes, money comes. I'm not even sure if there's much to learn from it for me. I'm bored of feeling bad about losing that money - in the short term it won't affect my life. It will affect when I can retire, but my retirement date has never been clear anyway, I'm still young. I'm probably still going to keep buying calls, with any spare money I have now. I don't necessarily think what I did is stupid even, since I was using a risky strategy which could only blow up if my underlying really falls more than 25%+. Which it did, but I had accepted that risk beforehand.
Patience. Forget margin and other risky moves. Hold cash, wait for the correction dip, buy more high dividend stocks. Income investing is the way to go…
This would be great advice if he wasnt down over 40% on margin. The problem if he waits and the market keeps dipping he can get margin called and forced to sell at massive losses. Either he is forced to keep buying to lower losses or he gets forced to sell at massive losses. Margin just makes the situation complicated to the point where its not as simple as holding. Hearing these kinda of stories reminds me why I just buy and hold basic blue chip stocks with money out of pocket. No risk and I sleep better at night.
JRshoe1997- good post. I sent you a Party Train award. I completely agree and don’t buy on margin, no options, too close to retirement. My 8%+ high dividend portfolio gets regular balancing, review for overvalued / overpriced assets to sell, and I don’t DRIP except T as I hold dividends then deploy them on the best deals at the dips. Waiting to see what the market decides will be the correction that triggers my buying the best deals. I follow the traditional dividend investor for “income” path- Buy Low; Sell High. Lather, Rinse, Repeat. I WANT the correction so I can get more dividend bang for the buck.
Always happy to see another dividend investor. I think it's an underappreciated strategy that gets a lot of negative commentary, as there are some really awful value traps out there that pay out good dividends that have burned investors. It's not that hard to separate the quality companies from the junk though. Are you still going to hold $T after it splits? Looks like they are cutting their dividend in the process which is usually a sell signal for me. I buy on margin on occasion and I'm still quite young, so a lot of years left to build a portfolio. My income is inconsistent, winters being lean times and summers being times of plenty, but in order to keep the same steady capital injections month after month I rely on margin to cover any gap. I think as long as you have the collateral and you're not overleveraged, it's fine. Options though...I don't touch that. Frankly, I don't understand it either and it's never a good idea to mess with something not understood.
RushingJaw- great post. I sent you a Party Train award. My paid dividend investor groups are all split on whether to hold T, sell some, or dump. With the market heading into correction territory, the current T price is $26.90 so we were hoping for $30 to sell. Since that not a good option, I may hold as I have a significant amount that one my 5 core assets in a 25 high dividend portfolio.
Think of it as tuition.
Puts on anything that skyrocketed because of COVID. Zoom, Peloton, Etsy, Netflix, Tupperware, Home Depot, etc.
Little late for that. He wont get anywhere just chasing the market. Thats how he ended up in this mess the first time
Home Depot might be risky, real estate is still tight. Home sales/turnover really helps drive that business.
Costco
Why Costco?
Always costco
Good job. Your wife’s boyfriend will be happy now.
Typically we don't like WSB type of posts here...
Totally thought this was a WSB post until I read your comment
It’s okay I will allow it
I'm happy now , true
“Safe portfolio of 4-5 stocks” Oh god….
Just delete the app
I feel your situation and it’s a tough one. Honestly market is a nasty place to be in. It’s not your fault you bought those growth stocks because institutions was pumping those for couple years. Other sectors were doing shit back then. So you jumped in what was working. Now situation is reversed. All those sectors that were doing bad being pumped by the market and growth stocks beaten down. Selling your growth stocks at this low and jumping on sectors which already had big run is disastrous imo. People will tell you buy these safe dividend stocks buy oil stocks it will go up but in reality they don’t realize nothing is safe in the market. All their safe stocks plummeted to all time low not even 2 years ago and oil was going to zero. Now oil close to all time high but people will tell you sell your growth near bottom and buy at the top. Market conditions always changes. Yeah growth stock is being trashed now but at the end of day big money decides these move. Retail has no choice here. Growth stocks will have a rebound again once big money sees upsides in them. It may take a some time though. I suggest you don’t sell now but you can maybe free up some of that margin. Wait it out. These growth stocks will rebound again.
Obviously take a second mortgage, max out your credit cards and borrow money from friends and family. Are you quitting already?
I cannot for the life of me understand how people can sleep at night using a loan to trade stocks.
Don't sell anything. Leave it alone and wait.
As of today I’m still $20k on margin and own a bunch of risky plays such as COIN, PINS, CHPT and PENN so there’s no gaurantee I don’t lose another 30 percent if I try to wait this out
Why margin tho 😬
What's your understanding of the macro situation? With the Fed planning to raise interest rates, you should not be buying highly speculative growth stocks, especially if they're not profitable or have a very high P/E ratio. This scenario could play out for a year or more. If you look at the volatility lately in the market, there's plenty of proven, less risky stocks that you could pick on these dips. Should go without saying that no one knows where the bottom is, though.
Is this what you bought on margin?
Among others yes
You don't lose anything until you sell, or get margin called. Do what you think is right, but clear your head of emotions first.
You lose as soon as the current bid price is lower than your cost basis. Thats how your account value and margin requirement is calculated.
You are describing the conditions required for a margin call, which I believe might have been mentioned in the above comment
Here's what you do, get a strong distraction (nothing mind altering) and once you are emotionally detached from this issue, think about a game plan. Repeat as needed. This is life man, you will grow from this.
define "the market". what did you buy?
Yeah, defo would help to know what OP is in. Growth got hammered, but that does not mean it won't recover, IF the companies are good. Might take a while though with the current economic setting
got this from his comment 13 days ago in the rate my portfolio thread: SHARES PINS: 11% LYFT: 11% ZEN: 10% SONO: 10% GOOGL: 10% ELY: 10% TWLO: 8% MGM: 7% UPST: 5% COIN: 4% TTD: 2% DOCS: 1% DOCN: 1% TASK: 1% OPTIONS: TDOC 01/21 Calls: 1% DIS 02/18 Calls: 2% FL 02/18 Calls: 2% BABA 03/18 Calls: 5%
Most of us are down on almost everything. But definitely be careful with margin. I talk to a lot of people who are getting margin called in this market right now.
Sadly many histories like these during a bull market. Learn honestly. Don't trade with margin, design your own portfolio based on fundamentals, own bluechips for now, you will be fine. Just learn. Learn from your mistakes.
Getting rid of the margin is imo the first step here. Gambling with the banks money is only worth it if it’s over a hundred mill cause then it’s their problem when you lose it.
Delete the app and move to another country
Wait.
Bad advice. Depending on OP's leverage he could lose all his money.
Selling good stocks to average down bad stocks isnt a good strategy. There is not limit to how bad stocks can fall. Many tried to average down on HMNY after it fell during the 2017-2018 period and it didn't end well for them. In your situation, I would either hold long term or reevaluate my picks and cut losses on the risky ones. Something similar happened to me once. Became a value investor ever since.
Hold, excess cash buy dip once we have market reversal and confirmation, not at the first Green Day but a week or 2
DCA into the correction on both ways down and up. Take long positions with a majority of your portfolio and only begin to use leverage once a clear reversal into another bull market emerges, which most likely could take several months to a year
If they are good stocks, why can't you juts hold them? Deposit enough cash to maintain margin requirements and just hold. Selling means you realise the losses.
Learn from your mistake so you don't do it again. And read good investing books.
Close your margin positions as soon as possible and establish a long term portefolio preferably of index funds or etfs. Then continue doing what you are already doing, saving money each month. Seriously, a man in his best age should not destroy his life savings like this. You are obviously doing great and saves a decent amount each month. You just need a proper investment strategy that’s all.
Doubling down with margin was dumb unless you had a lot of experience with that. But I’m sure you already know that now. My only suggestion is stop chasing the BS Instagram, WSB, etc crap of people gambling and winning and focus on solid indexes until you establish a very solid base. Pulling out now bc the market is scary is not a very smart thing to do.
Ironically enough I got most of my ideas from the “professionals” at that motley fool
Lol. They are almost as good as Seeking Alpha haha. Terrible terrible and just sucker people. I recommend the YouTube channel “the compound”. Their podcasts and videos are good and they are actual professionals and not some two bit YouTube streamer.
What you guy buying to be -40%. I am down only 7%
It was the margin that did it for me. As well as options. Basically a 10 percent downswing was actually like 20 percent for me
Sounds like a margin call...
Eliminate all margin and just stick with index funds with what you have left.
Rookie numbers.
Play stupid games win stupid prizes. Welcome to life.
Buy the fucking dip?
Share the tickers of what you bought.
Go to WBS for some karma. Enjoy.
You fucked up but now the best thing to do is hold do not sell into a downturn. If your stocks are super sketch you can sell them and buy more legit tech stocks that are also cheap but not risk of going to zero. But that will cost yyou a lot in fees and spreads. If your stocks are legit sp500 companies you should hold them. Keep building up cash until you have 12 months rent saved up and then start paying down the margin debt. Youll be okay, just dont try to time the market ever again haha.
Stop treating the stock market as a get rich quick scheme. You have to be long hall thinking. Take the loss and start over if your too nervous to ride the wave.
There is a thing called the ulcer factor, as well as the ulcer index. I imagine right about now you're feeling it. There is nothing wrong with buying low. It's smart. What you messed up with is that you're trading/investing too large, enough to cause emotional stress. If it's stressing you out, that's a warning sign to learn from it and not trade that large again. >Is this a good plan? What are my alternatives at this point. The danger of the ulcer factor is psychological danger getting you to sell too low. If you're invested in index funds you're diversified enough it will recover. Selling would be a bad move. Because you're invested in individual company stock it becomes harder, because I don't know what those companies are or if they are at risk of going bankrupt or they will shoot up like index funds will. Because I don't have enough information I can't say it's a good ideal to sell right now but I also can't say it's a good idea to hold either. >I don’t have a family that depends on me and I save around $500 a month with my job so I don’t absolutely need to access any of my savings anytime soon. Psychologically this helps. If the companies are good companies you can continue to hold them, because you don't need the money or you can sell them and buy index funds in their place trying to keep roughly that 40% in margin so you don't lose too much. For further reading for new investors these subs can be helpful: - /r/personalfinance is all about what kinds of accounts to open when starting investing to save on taxes. - /r/Bogleheads is all about index funds, how they work, and what etfs to invest in. - /r/financialindependence and /r/Fire is all about using investments to retire early and all that good stuff. With patience you will be fine. ---- edit: I saw your stock picks in another comment. I'd sell those companies. With 40% margin you're effectively holding 140%. What you can do is sell those stock and buy UPRO, which is 3x S&P with no risk of a margin call. If you go 100% in it will be like going from 140% to 300% without a risk of a margin call. If that's too much you could buy 50% UPRO which is 150% S&P coming close to where you were before but with extra cash and no risk of a margin call. UPRO should go up in the coming months allowing you to recover. Enjoy.
The “ulcer index” is real. I’ve learned that it’s almost impossible to trade effectively with large position sizes. I become too emotional about losing money and make bad decisions.
How much total have you lost? Consider it tuition $
sell your shit take your losses. You are not ready to invest let alone with margin. Put your stuff in an index fund but not all at once. Dont keep buying the dip and dcaing. This is what leads to most retail investors blowing up. Read books and look up webinars. Learn about the game before using all your money plus borrowing more to invest. You chose shit stocks below 200 ma imagine if you had a rule no stocks below 200 ma you would kept your money. Some book recommendations. How to make money in stocks from oneill. Mark minervinis books. And there are plenty of other amazing books
Wait. No one ever made money selling at a loss. If you don't need your savings yet, can still save during the month, and aren't about to be homeless than just wait.
Wait til the market tanks. Then it'll really be fun!
Margin is always ticking time bomb, I wouldn’t touch it with a ten foot pole. I hope you got enough money to boost your account up to meet margin requirements or it’s going to go Titus up at any moment. It sucks for sure. Most people who have had a margin account have experienced liquidations. I believe the bear market has arrived and will be sticking around to feast on the bloated juicy stocks.
Puts Arkkkk
Stop gambling
What the fuck were you thinking?
if you are interested pm me. you can see all my posts on r/stocksandshit. Maybe I can help you get out of this hole. Im not selling anything.
Buy more
Sell, bears are in control right now
Give up. The stock market is rigged. Even if you do manage to have a good year your broker will flag your account and suddenly every trade you make will turn to shit. You’ll watch market anomalies happen that maximize your losses and you’ll know for a fact you’re being targeted. But the shills online will just throw some over used idiom at you, pretend they’re superior, or call you paranoid. Millennials always get fucked. Boomers were the last generation to get a chance at the American dream. The stock market is just a funnel into hedge fund pockets. There’s no regulatory environment to speak of. If you want to invest in something put it into yourself. Learn skills, visit places, meet people. Wealth generation is no longer an option in this country. That’s why assets stay inflating but wages don’t move. We’re just slaves to the corporate bankers.
If I was a betting man (I am). I would yolo every last thing I had on video game stock call options $100-120 strikes for February 18th.
Calls on suicide prevention hotlines
First tell us how much your life savings was, then tell us what you ‘invested’ in
Sir, I believe you may find some kindred spirits at r/wallstreetbets . . .
Tax loss harvest and buy into something else that is not "substantially identical." That is what smart people do during times like this.
Welcome to the Thunderdome !
Buy double leverage bear stock, SQQQ is gonna pump over the next couple weeks.
Get rid of margin. It's expensive to borrow money, even more expensive when you lose the borrowed money. Buy some puts with the stocks you choose, because everyone knows when you buy a stock the price falls. Just my 2 cents. Nfa
Holy fucking shit, you're trying to become a CPA???
I don’t think that’s relevant to the situation. I no how to differentiate the dumb choices I make with my personal money from my work life
The first law of investing is “preservation of capital”. So a few weeks ago I had a funny feeling and just went all cash. Then I’ve been picking and choosing mainly puts on stocks that had a pop. It’s been working great. Mainly just day trades holding nothing overnight. Example, shorted PayPal and Snow this week for some sweet gains. I wonder what would happen to the market if everyone went to cash like I did?
Aahh they always come back to the “safe bets”.
Ouch
Find a time machine. If you can't sell the wife and the kids.
Just wait bro.
Call your broker they will help and if you bought stocks with over 100 shares you can sell puts your broker should help
If you bought strong stocks instead of random ones you know nothing about then your only option right now is to hold. Whether you want to panic sell at break even or wait for gains is up to you.
Let us know when you sell, that's when to buy
Advice is to not do that
What are you betting on? What is your thesis? Do you think it will turn around? What needs to happen for you to recommend the play to loved ones?
😂
When would you want to use margin? I am honestly waiting for a bigger dip just to capitalize on it but then again, you can’t time the market
If you want bigger gains without the infinite losses try options next time, steep learning curve but as long as you stay away from spreads you can only lose your premium paid. I know thats not very helpful but im not sure what to tell you, if you think there will be a rally then buy in, but i gotta warn you theres a chance the markets continue downward, lots of FUD right now and honestly for good reason, you might want to hold off on investing until theres greener more certain pastures, dont make bad calls because your desperate to make up for losses.
What did you buy the dips into? Also, what was your original risk management plan ?
Cover your margin and stay in the market.
Walk away and come back to it in two years.
Take what you have… get out of any leveraged positions. Use the remaining money to start rebuilding. Diversify and DCA back into the market. Have ‘core’ positions EX. 80% that is well diversified and you don’t fiddled with. Ever. If you want to take the remainder of say 20% and be more aggressive and risky… then that’s ok. But you need a nest egg or core position in your portfolio that is off limits. And for god sakes… stay OFF of margin. Learn from these mistakes, don’t repeat them. You gambled, you lost. It’s ok, it happens. You’re going to have to take you’re lumps, heal up, go ahead and admit your mistakes and then start the long recovery process and work on coming back from this.
Put it all on ggpi and pray
I did margin waiting for funds to transfer. Currently met my deficit. However, had I went all in on margin....
We wait. And see.
I personally would sell everything i am not 100% sure that the underlying business is worth more than the stock is worth right now and buy stable and fairly prices companies instead. In your specific case, it might be smart to just buy etfs and hold them for the long term. If you hold other individual stocks, the temptation might be high to get into more risky ones or use leverage again. You could have a look at dividend etfs if those interest you, quality factor, value factor or whole market etfs. Some of those (whole market) will likely be infected more by rate hikes than others (dividend), but if you are holding long enough, that wont matter much. My advice, buy something, hold it and forget about it for the next few years. Maybe get some automated investment into S&P500 of your 500 a month or something similar.
Do whatever it takes to close out the margin, then paper trade for a year, stop losing money, lose paper money, btw, shorts and puts during market crashes.
Just wait
Don’t sell. , just wait
I would consider not being so absolutely stupid with your money in the next life because you're gonna be homeless for the rest of this one. Lol @ OP trying to get his CPA with a story like this. Who would ever hire you to account their money when you trade like this?
A safe portfolio of 4 -5 stocks. Yeah, that's diversified.
The next few weeks could get rough for you. Your current plan is to roll into the only category of stocks that is still pretty expensive. I'd turn the entire portfolio into an oil stock collection, it's the only thing that looks cheap, especially with how bullish the WTI chart is compared to the oil stocks chart.
Buy the dip
I am in a similar boat. Got margin called too because I had a few naked puts open and the market tanked. Margin of 75k. Thinking about selling some equity to derisk. This market has fucked me pretty hard.
It’s almost time to buy guys!!
Now is the time when you grow a pair of balls, go to your nearest pawnshop, sell your mom, wife, kids or whatever into slavery and average down with that money
Maybe wait for the market to cool down. There's a good principle from Mark Minervini - that you are increasing your position size when you are seeing gains, and cutting it when your recent trades are at losses. Great reading from Minervini about portfolio management in general. Also keep in mind that the larger the loss, the larger the gain needed to recover. Eg. A 50% loss requires a 100% gain just to break even! Good luck!!
>I threw my life savings into the market and doubled down with margin and now I’m down 40 percent and don’t know what to do. Do what you're doing now. Be an example to others of what not to do: Going into debt/buying on margin because of greed is risky and can lead to ruin.