News Buffet Spends $5 Billion For a Slice of TMSC

[Admin]

Wealthy businessman Warren Buffet's investment firm has purchased $5 billion worth of shares in TMSC

Buffet Spends $5 Billion For a Slice of TMSC : Read more

 

[bit_user]

That's a nice vote of confidence.

 

[Math Geek]

oh yah, he hits way more than he misses, so i'd say he knows something we don't for sure.

 

[helper800]

As a standard disclaimer; Investment in stocks is akin to gambling, invest at your own risk.

 

[bit_user]

As a standard disclaimer; Investment in stocks is akin to gambling, invest at your own risk.

Yes and no, but more yes than no.

For sure, if you invest in individual stocks or targeted funds without knowing what you're doing, it's basically gambling. I stopped buying individual stocks, a long time ago. I wish I had the passion for investing that I have for tech, but I just don't.

By comparison, buying a lotto ticket is virtually flushing your money down the toilet. Even if a stock you buy goes down, they generally don't lose all of their value.

 

[helper800]

Yes and no, but more yes than no.

For sure, if you invest in individual stocks or targeted funds without knowing what you're doing, it's basically gambling. I stopped buying individual stocks, a long time ago. I wish I had the passion for investing that I have for tech, but I just don't.

By comparison, buying a lotto ticket is virtually flushing your money down the toilet. Even if a stock you buy goes down, they generally don't lose all of their value.

I and many studies actually argue the opposite such that random investments are more effective than targeted or managed investments. As you have said though lottery tickets basically are never give ROI.
Sources:
https://www.forbes.com/sites/alexkn...ent-strategy-is-a-random-one/?sh=1915436f5136

A Cat Outperformed Pro Stock-Pickers. Here's What That Means for Investors | The Motley Fool

Are actively managed mutual funds really worth the high fees? More and more data tells us otherwise.

www.fool.com

 

[bit_user]

I and many studies actually argue the opposite such that random investments are more effective than targeted or managed investments.

What I think I've heard about actively-managed funds is that they rarely outperform index funds by enough to overcome the additional fees.

For me, the problem with index funds is that you still have to keep your portfolio balanced. That's where I tend to slip up.

 

[helper800]

What I think I've heard about actively-managed funds is that they rarely outperform index funds by enough to overcome the additional fees.

For me, the problem with index funds is that you still have to keep your portfolio balanced. That's where I tend to slip up.

You skipped the part that shows randomly investing removes bias and improves profits.

 

[TJ Hooker]

For me, the problem with index funds is that you still have to keep your portfolio balanced. That's where I tend to slip up.

You can buy ETFs that cover the global equity markets, which automatically rebalance based on relative market cap. And you can buy ETFs that have a mix of stocks and bonds, and auto rebalance to keep the funds desired allocation

Where's the need to manually rebalance?

 

[TJ Hooker]

I and many studies actually argue the opposite such that random investments are more effective than targeted or managed investments. As you have said though lottery tickets basically are never give ROI.
Sources:
https://www.forbes.com/sites/alexkn...ent-strategy-is-a-random-one/?sh=1915436f5136

A Cat Outperformed Pro Stock-Pickers. Here's What That Means for Investors | The Motley Fool

Are actively managed mutual funds really worth the high fees? More and more data tells us otherwise.

www.fool.com

Saying that active investing/stock pocking is no better (or outright worse) than investing at random is completely different than your original statement (i.e. that any equity investing is no different than gambling).

 

[helper800]

Saying that active investing/stock pocking is no better (or outright worse) than investing at random is completely different than your original statement (i.e. that any equity investing is no different than gambling).

You are correct the first thing I said is not the second thing I said. If you were to read the conversation you would realize that I brought up these articles because bit_user said the following as a reply to my first post.

Yes and no, but more yes than no.

For sure, if you invest in individual stocks or targeted funds without knowing what you're doing, it's basically gambling. I stopped buying individual stocks, a long time ago. I wish I had the passion for investing that I have for tech, but I just don't.

By comparison, buying a lotto ticket is virtually flushing your money down the toilet. Even if a stock you buy goes down, they generally don't lose all of their value.

The connection between gambling and random vs intentional investing in not one I ever made other than investing being a gamble. I brought those articles up because it is my belief that if any "investors" actually knew what they were doing they would be able to match or beet random investment picks by cats, apes, and otherwise. My first point is that no matter the investment type or strategy it is a gamble. My second point was that intentional investing is no better or worse than random investment.

 

[TJ Hooker]

You are correct the first thing I said is not the second thing I said. If you were to read the conversation you would realize that I brought up these articles because bit_user said the following as a reply to my first post.

The connection between gambling and random vs intentional investing in not one I ever made other than investing being a gamble. I brought those articles up because it is my belief that if any "investors" actually knew what they were doing they would be able to match or beet random investment picks by cats, apes, and otherwise. My first point is that no matter the investment type or strategy it is a gamble. My second point was that intentional investing is no better or worse than random investment.

My issue is with the part in bold. Passive, index investing is still an investment strategy, but it's not "gambling" (unless you consider "gambling" to be anything that has a risk of loss). Gambling has a negative expected value, (index) investing has a positive one.

 

[helper800]

My issue is with the part in bold. Passive, index investing is still an investment strategy, but it's not "gambling" (unless you consider "gambling" to be anything that has a risk of loss). Gambling has a negative expected value, (index) investing has a positive one.

All investing is gambling unless its in an FDIC insured savings account or you have insider information. If you spend money on something and do not know the outcome of said money spent, whether appreciative or depreciative, you are gambling. Investing and gambling are not positive or negative, they are words that happen to be synonyms. The connotation of the words can be seen either positively or negatively, though that can vary culturally and geographically. There is a reason there is no connotation dictionary.

 

[bit_user]

You skipped the part that shows randomly investing removes bias and improves profits.

That might be true, but it's not the "conventional wisdom" I was recanting.

 

[bit_user]

All investing is gambling unless its in an FDIC insured savings account or you have insider information. If you spend money on something and do not know the outcome of said money spent, whether appreciative or depreciative, you are gambling.

This stance is too extreme, for me. Introducing the element of chance doesn't automatically make something gambling. I think true gambling is random by design.

Investing and gambling are not positive or negative, they are words that happen to be synonyms.

Definitely not. At a fundamental level, the goal of investing is to attract resources where they're likely to be productive. There are many activities that get lumped under the umbrella of "investing" and ways people use investments which aren't so productive, but that doesn't invalidate the entire exercise.

Ideally, investing is good for both the investor and the entity in which they're investing. Gambling is good for the house and almost never the gambler. Worse, the only good that gambling does for society is through taxes (or, in the case of the lottery, if the house is the government). Due to its addictive nature, gambling does a lot of damage to both gamblers and even society, by fueling certain types of criminality.

The connotation of the words can be seen either positively or negatively, though that can vary culturally and geographically.

I really don't see gambling as a net positive. At best, it's a wash. Investing is a positive, overall, in spite of its many caveats and issues.

 

[bit_user]

I and many studies actually argue the opposite such that random investments are more effective than targeted or managed investments. As you have said though lottery tickets basically are never give ROI.
Sources:

• https://www.forbes.com/sites/alexkn...ent-strategy-is-a-random-one/?sh=1915436f5136
• https://www.fool.com/investing/2016/08/01/a-cat-outperformed-pro-stock-pickers-heres-what-th.aspx

You're over-interpreting these studies. In the first, they applied 4 traditional investment strategies blindly, in comparison with a 5th random one. That's not how most managed funds are managed. They note that some of the investment strategies indeed performed well in certain markets and time periods, which suggests that it should be possible for someone with market-insight to out-perform the random strategy.

In the second link, they caution that it was hardly done with any sort of scientific rigor. Indeed, the selection of the stocks and their placement could have an outsized influence in the result.

Finally, the success of a strategy involving randomness is very different than the randomness involved in gambling. What the "random" strategy effectively boils down to is simply investing in the overall market, which we know appreciates with time. A randomized approach to gambling will surely lose you money, over the long term.

 

[helper800]

This stance is too extreme, for me. Introducing the element of chance doesn't automatically make something gambling. I think true gambling is random by design.


Definitely not. At a fundamental level, the goal of investing is to attract resources where they're likely to be productive. There are many activities that get lumped under the umbrella of "investing" and ways people use investments which aren't so productive, but that doesn't invalidate the entire exercise.

Ideally, investing is good for both the investor and the entity in which they're investing. Gambling is good for the house and almost never the gambler. Worse, the only good that gambling does for society is through taxes (or, in the case of the lottery, if the house is the government). Due to its addictive nature, gambling does a lot of damage to both gamblers and even society, by fueling certain types of criminality.


I really don't see gambling as a net positive. At best, it's a wash. Investing is a positive, overall, in spite of its many caveats and issues.

We can agree to disagree here. There are many gambles that are said to be investments so as to make the meanings of the words indifferent. There is just as much if not more crime and addiction in investing as there is in gambling, but because of several of the things you have said previously the people who indulge are truly pathological. They believe themselves to have no problems because they aren't "gambling," and are just, "investors." We can thank all types of investors for most of the economic collapse and instability in history. We can also thank them for the times between disasters for the economic growth, but that does not discount the former because of the latter. Investing has a lot of the same exact pathologies as gambling and creates addicts in the same exact manner.

You're over-interpreting these studies. In the first, they applied 4 traditional investment strategies blindly, in comparison with a 5th random one. That's not how most managed funds are managed. They note that some of the investment strategies indeed performed well in certain markets and time periods, which suggests that it should be possible for someone with market-insight to out-perform the random strategy.

In the second link, they caution that it was hardly done with any sort of scientific rigor. Indeed, the selection of the stocks and their placement could have an outsized influence in the result.

Finally, the success of a strategy involving randomness is very different than the randomness involved in gambling. What the "random" strategy effectively boils down to is simply investing in the overall market, which we know appreciates with time. A randomized approach to gambling will surely lose you money, over the long term.

How else are you going to do an unbiased study but to blindly apply traditionally strategies? The whole idea that someone can understand a market which is almost as random as the white noise on a CRT with no tuner is laughable. Every study I have ever seen has shown that the people who say they know what they are doing actually do worse compared to randomized picks over time. Gambling is actually far easier to know what can and cannot happen than in investing. You know the exact odds of the game before you play and can even get insights as to what is going to increase or decrease your odds based on cards that are shown in blackjack for example. Gambling is a known quantity. The only reason the stock market goes up is because everyone invests like it will so it does. When more people are buying stocks more than they are selling them, for example, that increases the underlying value of the stock, thus making it go up. Investing is more like a community religion of hoping investments go up and the very act of purchasing into them makes it so. A self-fulfilling prophecy. The so-called market knowledge is at best a hunch based on one's own experience of similar scenarios, far from knowing what is actually going to happen and what way something will actually effect an investment.

 

[bit_user]

There are many gambles that are said to be investments so as to make the meanings of the words indifferent.

It sounds to me like you're confusing a direct metaphor with the actual thing.

How else are you going to do an unbiased study but to blindly apply traditionally strategies?

Compare it to actual managed funds, rather than blindly applying a single strategy, irrespective of market conditions. They essentially setup 4 strawmen to beat, rather than looking at real decisions made by real investors.

As for the "cat" experiment, that was a clickbait magazine article that lacked any kind of scientific rigor.

When more people are buying stocks more than they are selling them, for example, that increases the underlying value of the stock, thus making it go up. Investing is more like a community religion of hoping investments go up and the very act of purchasing into them makes it so. A self-fulfilling prophecy.

A profitable company has some intrinsic value. It has assets and expertise. As such, there's some real-world value you could assign to it, depending on how soon you wanted to recoup your investment, if you were to buy it outright. That makes it different from something like crypto-currency, which has no intrinsic value.

Another difference is dividend-paying companies, where you actually get a share of their profits. I used to be strongly opposed to dividends, but I've softened my position a bit. I do think they should be taxed higher than normal capital gains, so that investors will be more in favor of a company trying to use its profits for growth, rather than draining its lifeblood.

The so-called market knowledge is at best a hunch based on one's own experience of similar scenarios, far from knowing what is actually going to happen and what way something will actually effect an investment.

Yes, but you can't know exactly what's going to happen when you walk out of your front door, tomorrow. Does that mean you stay in your home, for the rest of your life? No, you make your best guess about what's going to happen during the day, and try to prepare accordingly.

 

[palladin9479]

All investing is gambling unless its in an FDIC insured savings account or you have insider information. If you spend money on something and do not know the outcome of said money spent, whether appreciative or depreciative, you are gambling. Investing and gambling are not positive or negative, they are words that happen to be synonyms. The connotation of the words can be seen either positively or negatively, though that can vary culturally and geographically. There is a reason there is no connotation dictionary.

Not really. Folks are confusing a ton of different things, so we'll tackle them one at a time.

When you "invest" you are fundamentally buying an asset, not a lottery ticket but a part ownership of a company. The "price" you pay is what the market thinks that piece is worth, and this is where people think it's gambling, those price can change frequently and for almost no reason at all. If you buy something for X value, with the expectation of selling it for X+Y value, then you are indeed gambling because you won't have any idea what the underlying valuation of the asset is. To understand whether a company is worth buying a part of you need to understand that company and the industry that company is involved in, then look over a bunch of numbers like Price to Earnings (PE )ratio and Earnings Per Share (EPS) to determine if it's undervalued or overvalued. When an asset is undervalued, then it's a good time to buy it, when it's overvalued then it's a bad time to buy, when it's insanely over valued, then it's time to sell.

Now for the whole "random" vs "day traders" thing, day traders don't have deep understanding into every industry and every company on the planet and therefor are almost entirely going off metrics. This means decisions without context or understanding, so little better then being random. It's a bit more nuanced because day traders get it right far more often then they get it wrong, it's how they make their living in the first place. What the "random" part does is occasionally pick an asset that is wildly over or under valued that swings in a remarkable and unpredictable direction resulting in the wins and loses having a greater effect. The market almost universally goes up over time, so even a 50/50 win/lose split will result in positive earnings.

Dividends are great things because they are honest. A stock holder is a part owner of the company, the entire point of owning a for-profit company is to make profit. It's the job of the Board of Directors to figure come up with how much should be put towards future growth and how much should be returned to the owners. Companies not paying dividends is what caused the entire "stock market is just gambling" thing to happen in the first place as how else is an investor supposed to get profit from their hard earned capital. Plus most of the time, what would of been dividends just ends up as stock options for the C-suite folks.

In short, view stocks as buying assets not lottery tickets. Only buy an asset that you understand and that operates in an industry you can have knowledge in. Most of our investment portfolio's should be in assets that pay us to own them, or at worst in a market index fund.

 

[helper800]

It sounds to me like you're confusing a direct metaphor with the actual thing.


Compare it to actual managed funds, rather than blindly applying a single strategy, irrespective of market conditions. They essentially setup 4 strawmen to beat, rather than looking at real decisions made by real investors.

As for the "cat" experiment, that was a clickbait magazine article that lacked any kind of scientific rigor.


A profitable company has some intrinsic value. It has assets and expertise. As such, there's some real-world value you could assign to it, depending on how soon you wanted to recoup your investment, if you were to buy it outright. That makes it different from something like crypto-currency, which has no intrinsic value.

Another difference is dividend-paying companies, where you actually get a share of their profits. I used to be strongly opposed to dividends, but I've softened my position a bit. I do think they should be taxed higher than normal capital gains, so that investors will be more in favor of a company trying to use its profits for growth, rather than draining its lifeblood.


Yes, but you can't know exactly what's going to happen when you walk out of your front door, tomorrow. Does that mean you stay in your home, for the rest of your life? No, you make your best guess about what's going to happen during the day, and try to prepare accordingly.

I am confusing nothing. Scam artists will tell you something is an investment when in reality it is a gamble. How am I to trust something as an investment before taking the plunge when the certainties for both gambles and investments are unknown? Its an investment if it pays off and a gamble if it didn't. The meanings of the word investment and gamble are inextricably linked.

We are at a trespass of opinion. When you say in your 4th point that companies have intrinsic value that is only true the day of their IPO. No company years after they go public have intrinsic value anywhere near equaling what their valued at on the market. This is because a companies stock valuation after a while grows to be completely overblow compared to what they actually have. Stocks are backed by the belief they will go up, not actual physical growth of the company with assets.

Your 6th line about how we take risks everyday by walking out of the door while trying to equivocate those risks to investing. The risks are not comparable with each other, a false-equivalency. I take a step outside everyday so I am already taking risks, thus taking risks with your money is okay... That is not something I ever even said. My only original points were such that investing is, no matter how you rationalize, a gamble, and that intentional investing is no better or worse than random investment. Investors have created sophisticated algorithms and AI to help them pick investments and to reduce the bias of their experiences in that process.

I will leave this chat thread with this, as I am done with the debate: https://econs.online/en/articles/economics/heads-or-tails/

 

[helper800]

Not really. Folks are confusing a ton of different things, so we'll tackle them one at a time.

When you "invest" you are fundamentally buying an asset, not a lottery ticket but a part ownership of a company. The "price" you pay is what the market thinks that piece is worth, and this is where people think it's gambling, those price can change frequently and for almost no reason at all. If you buy something for X value, with the expectation of selling it for X+Y value, then you are indeed gambling because you won't have any idea what the underlying valuation of the asset is. To understand whether a company is worth buying a part of you need to understand that company and the industry that company is involved in, then look over a bunch of numbers like Price to Earnings (PE )ratio and Earnings Per Share (EPS) to determine if it's undervalued or overvalued. When an asset is undervalued, then it's a good time to buy it, when it's overvalued then it's a bad time to buy, when it's insanely over valued, then it's time to sell.

Now for the whole "random" vs "day traders" thing, day traders don't have deep understanding into every industry and every company on the planet and therefor are almost entirely going off metrics. This means decisions without context or understanding, so little better then being random. It's a bit more nuanced because day traders get it right far more often then they get it wrong, it's how they make their living in the first place. What the "random" part does is occasionally pick an asset that is wildly over or under valued that swings in a remarkable and unpredictable direction resulting in the wins and loses having a greater effect. The market almost universally goes up over time, so even a 50/50 win/lose split will result in positive earnings.

Dividends are great things because they are honest. A stock holder is a part owner of the company, the entire point of owning a for-profit company is to make profit. It's the job of the Board of Directors to figure come up with how much should be put towards future growth and how much should be returned to the owners. Companies not paying dividends is what caused the entire "stock market is just gambling" thing to happen in the first place as how else is an investor supposed to get profit from their hard earned capital. Plus most of the time, what would of been dividends just ends up as stock options for the C-suite folks.

In short, view stocks as buying assets not lottery tickets. Only buy an asset that you understand and that operates in an industry you can have knowledge in. Most of our investment portfolio's should be in assets that pay us to own them, or at worst in a market index fund.

The whole underpinning of your argument is opinion and experience based. Do all undervalued companies go up in value? Do all overvalued companies go down in value? No, and no, this is because these metrics are opinions of the overarching opinion related to the company. The market goes up for a number of years and then eventually lose droves of its value erasing the previous years of growth. This cycle repeats forever. This risk of not knowing when the market loses massive values is an inherent risk that will never go away. If owning a stock gives me part ownership of a company how is this magical dividend any different from just owning stock and having its value increase because the company did well? The same motivations for dividend stocks are what drive companies to make their company stock worth more. A dividend stock is functionally equivalent to a normal stock, it just gives you a quarterly showing of the change in the companies profit rather than on the daily second to second change of an individuals stock valuation. The only difference in dividend stocks is that if a company is particularly profitable at the same time a controversy or otherwise tanks the underlying stocks value, you still get a good dividend payout.

Again I am not going to debate the semantics or philosophical merits of saying investments are not gambles and so on.

 

[palladin9479]

The whole underpinning of your argument is opinion and experience based. Do all undervalued companies go up in value? Do all overvalued companies go down in value? No, and no, this is because these metrics are opinions of the overarching opinion related to the company. The market goes up for a number of years and then eventually lose droves of its value erasing the previous years of growth. This cycle repeats forever. This risk of not knowing when the market loses massive values is an inherent risk that will never go away. If owning a stock gives me part ownership of a company how is this magical dividend any different from just owning stock and having its value increase because the company did well? The same motivations for dividend stocks are what drive companies to make their company stock worth more. A dividend stock is functionally equivalent to a normal stock, it just gives you a quarterly showing of the change in the companies profit rather than on the daily second to second change of an individuals stock valuation. The only difference in dividend stocks is that if a company is particularly profitable at the same time a controversy or otherwise tanks the underlying stocks value, you still get a good dividend payout.

Again I am not going to debate the semantics or philosophical merits of saying investments are not gambles and so on.

What huh.. metrics are opinions...?

I'm here, in good faith, educating folks on how to view stocks and more importantly some of the common misconceptions behind them. If you aren't interested in that, then you aren't discussing in good faith.

As for the valuations, there are very good values for that, and I even gave them to you. Earnings Per Share (EPS) is the amount of profit the company is earning for each share of stock. It's quite literally the value of that stock expressed in profit. The next value is Price vs Earnings ratio, which is the ratio between the market price and the EPS. If the stock price is at $10 and it's EPS is $1 then it's P:E would be 10.0. Any PE ratio under 20 is considered "undervalued", thought I personally only like to buy stuff that's 16 or less as that is definitely a bargain. Another number is PE vs Growth ratio, which is the PE value vs the growth rate of the stock, anything under 1.0 means the stock is undervalued. I don't personally like PEG because it's looking backwards and might not take into account market trends or industry news.

Which brings us to where the rubber meets the road. Those guidelines are there to help people understand the valuation of a stock, but the decision to a position should only be made within the context of the industry they are in. The current recession has caused a dramatic downturn of the market, meaning people are, like your self, panic selling, making for amazing bargains. It's why I discussed viewing stocks as assets and not a bank account. You don't own $100,000 in a stock, you own 10,000 shares that were priced at $10 USD. If the price hits $5 USD you didn't "lose" money, you still own the 10,000 shares, and if you have $50K liquidity you can own another 10,000 shares at a whopping 50% discount. When the price goes back up to $10 USD those 20,000 shares would be worth $200,000, if you chose to sell.

See back during the last recession, the people who made monstrous amounts of money were the ones buying all the undervalued assets at bargain rates.

Guide for those actually wanting to understand what I was discussing.

https://www.thebalancemoney.com/what-does-stocks-are-cheap-or-expensive-mean-3140707

Final note, TV news tends to heavily misunderstand financial stuff and markets fear hoping to increase views for ad revenue. They get people freaked out, who then go and sell their solid positions at distressed prices and end up losing a ton of money in the process of making other people rich.

 

[helper800]

What huh.. metrics are opinions...?

I'm here, in good faith, educating folks on how to view stocks and more importantly some of the common misconceptions behind them. If you aren't interested in that, then you aren't discussing in good faith.

As for the valuations, there are very good values for that, and I even gave them to you. Earnings Per Share (EPS) is the amount of profit the company is earning for each share of stock. It's quite literally the value of that stock expressed in profit. The next value is Price vs Earnings ratio, which is the ratio between the market price and the EPS. If the stock price is at $10 and it's EPS is $1 then it's P:E would be 10.0. Any PE ratio under 20 is considered "undervalued", thought I personally only like to buy stuff that's 16 or less as that is definitely a bargain. Another number is PE vs Growth ratio, which is the PE value vs the growth rate of the stock, anything under 1.0 means the stock is undervalued. I don't personally like PEG because it's looking backwards and might not take into account market trends or industry news.

Which brings us to where the rubber meets the road. Those guidelines are there to help people understand the valuation of a stock, but the decision to a position should only be made within the context of the industry they are in. The current recession has caused a dramatic downturn of the market, meaning people are, like your self, panic selling, making for amazing bargains. It's why I discussed viewing stocks as assets and not a bank account. You don't own $100,000 in a stock, you own 10,000 shares that were priced at $10 USD. If the price hits $5 USD you didn't "lose" money, you still own the 10,000 shares, and if you have $50K liquidity you can own another 10,000 shares at a whopping 50% discount. When the price goes back up to $10 USD those 20,000 shares would be worth $200,000, if you chose to sell.

See back during the last recession, the people who made monstrous amounts of money were the ones buying all the undervalued assets at bargain rates.

Guide for those actually wanting to understand what I was discussing.

https://www.thebalancemoney.com/what-does-stocks-are-cheap-or-expensive-mean-3140707

Final note, TV news tends to heavily misunderstand financial stuff and markets fear hoping to increase views for ad revenue. They get people freaked out, who then go and sell their solid positions at distressed prices and end up losing a ton of money in the process of making other people rich.

The first thing I underlined in your reply actualized my point that these ways of evaluating numbers for these stocks are an opinion. I am discussing in good faith. Any time you have to use the word considered, thought, my belief, et cetera you are typically asserting an opinion. Is it or is it not a fact that if a stock's P:E is less than 20 it in undervalued? Is that a fact or an opinion? I ask this because you go on to say that's not good enough and its ratio has to be below 16. Is that your opinion of the fact? If it is a fact, why do you prefer to think its not undervalued enough at 18 as a ratio instead of 16 or below? I am a logical man. Either its factually undervalued if below a ratio of 20 or its not. If it is, does that mean to you that it is not truly undervalued to the point that its more or less telling until a ratio of 16?

The second and third things embolded and underlined are also unclear as to whether its a fact or an option that is being expressed. Even if all these metrics are factually what they are as metrics this still does not indicate that the choice of purchasing said stock is or is not a gamble or investment as I was originally arguing. I truly respect you, your knowledge, and your opinion over the years I have seen you in the forums, please do not take anything as I say as disingenuous. Also I have not sold any stock since the "recession" so I do not know where you got that from unless it was a typo.

Stocks are immediately liquid unless you own a a very large stake in a company, so to say they are not like cash is not an opinion I share either. If you have 100,000 dollars in a stock at 10 dollars each and the stocks evaluation goes to 5 dollars and will not recover in the foreseeable future you lost money because you lost buying power. You then describe on getting a discount on averaging down your position by buying more of the same stock. This is all very assumptive that it will ever reach the same price again.

Also I believe the people who made the largest profits from the Great Recession were the ones who invented betting against the banks depicted in, "The Big Short," movie. They made billions of dollars.

 

[palladin9479]

You do you bro.

 

[bit_user]

BTW, we shouldn't focus only on the US stock market, when talking about investing. Especially at a philosophical level.

You do you bro.

Yeah, I just can't... with this debate.

@helper800 , there are different ways to look at things, and often no single perspective is absolutely correct. You just have to think about which characteristics are most salient/important/useful and try to find a perspective aligned with those. All of this can be colored by ideology, vested interests, or past experience, as well. I hope you can keep an open mind to different perspectives, but ultimately you're going to decide for yourself what you believe.