Amateur Recommendations Log (what NOT to buy)

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Lucky C
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Amateur Recommendations Log (what NOT to buy)

Post by Lucky C »

A thread to log what investments your friends/relatives/acquaintances have mentioned to you or on social networks out of the blue, as a sign that the popularity/speculation of the trade may be reaching its limit. I've found that the more fiercely an amateur is recommending something, the more likely it is at (or soon will be) a major top.
Joe Kennedy wrote:“If shoe shine boys are giving stock tips, then it's time to get out of the market.”
Last edited by Lucky C on Thu Dec 17, 2020 11:09 am, edited 1 time in total.

Lucky C
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Re: Amateur Recommendations Log (what NOT to buy)

Post by Lucky C »

My mom asked me about Pfizer and Moderna, Friday 12/11/20 after the markets closed. Less than four trading days later:
PFE was $41.12, now $37.66 = -8.4%
MRNA was $156.93, now $143.44 = -8.6%

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Lemur
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Re: Amateur Recommendations Log (what NOT to buy)

Post by Lemur »

Guess I'll add my two:

* Palantir Technologies (PLTR). I'm currently rolling CSPs on.
* QuantumScape (QS). Because Bill Gates and solid state battery / EV Market FOMO. I bought this one high right at $70.00 and I'm currently doing weekly CC's to lower my cost-basis. Still could be an excellent long-term hold IMO but in the short-term, it is too high.

Alphaville
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Re: Amateur Recommendations Log (what NOT to buy)

Post by Alphaville »

sure if you bought moderna to capitalize on vaccine fever trade that probably already peaked

but there's a huge potential upside in demonstrating the efficacy of synthetic mrna mechanism as a platform for other treatments, beyond the experimental phase, so you could still buy and hold as long term investment.

iow, mrna technology is for more than just covid.

https://en.m.wikipedia.org/wiki/Nucleos ... senger_RNA

could be a bit like refusing to buy apple after jobs launched the imac or the iphone because it had already risen.

eta: mrna (moderna) vaccine is up for fda approval also. so i'd wait to dump after approved (unless not approved lololol. but does not appear likely). https://www.reuters.com/article/health- ... NKBN28R1O1

eta: https://m.youtube.com/watch?v=I4psAfbUtC0

bostonimproper
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Re: Amateur Recommendations Log (what NOT to buy)

Post by bostonimproper »

Tesla and Bitcoin, forever and always. But in those cases, they’ve been right. >_>

Alphaville
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Re: Amateur Recommendations Log (what NOT to buy)

Post by Alphaville »

mrna has been crashing as of late btw. spotted it at 108 this week down from... a high of 178 i think some time ago? wow.

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unemployable
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Re: Amateur Recommendations Log (what NOT to buy)

Post by unemployable »

Anything mentioned on r/wallstreetbets

Lucky C
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Re: Amateur Recommendations Log (what NOT to buy)

Post by Lucky C »

Yup MRNA is a nice 30% down from the Don't Buy recommendation above. PFE down 11.5%.

I forgot to mention, a friend of a friend mentioned UAVS on Dec 22nd. Closed at $6.79 then. Now at $6.03 = -11% in 6 trading days.

I don't know many people who take investing seriously, so the stock mentions I hear are few and far between and usually mean something is currently in an overextended mania. I haven't been seeing other names mentioned from anyone I know personally. IOW I am trying to avoid selection bias and will try to remember to update this the next time I hear an investment mentioned out of the blue.

I wouldn't post about a bigger more obvious bubble like TSLA or BTC because it appears that with name recognition comes relatively more enduring price growth and a longer-lasting bubble. I do remember however that during the previous crypto bubble (January 2018) a Facebook friend (who I was surprised to find had an interest in crypto) mentioned TRON, which I had never heard of before. That ended up being the exact top to the day.

So going back to MRNA and PFE, Pfizer already had the broad name recognition relative to Moderna, so it makes sense that MRNA spiked harder and is now coming down harder. Of course it is a much smaller company than Pfizer with a higher beta to be expected anyway.

Moral of the story is that the first time you hear a name mentioned from an unexpected source of investment info, stay away! However after the initial hype subsides, you may want to put it on a watchlist to buy if it looks like it has the potential for a second bigger wave a couple years later a la TSLA or BTC. After all, it already proved that it can generate some fanaticism, so maybe it will be even more infectious in the second wave. Then you'll just have to wait until everyone starts talking about it to sell, before it reaches herd immunity... sorry for turning this into an analogue of Covid.

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Lemur
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Re: Amateur Recommendations Log (what NOT to buy)

Post by Lemur »

@unemployable

OTOH, I've found great success selling the options that WSB is pushing :)

Alphaville
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Re: Amateur Recommendations Log (what NOT to buy)

Post by Alphaville »

tesla on the front page of every yearly business review.

when is it finally gonna come crashing? or no? :lol:

im seriously asking.

Lucky C
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Re: Amateur Recommendations Log (what NOT to buy)

Post by Lucky C »

Tesla is currently worth about two Toyotas and four Hondas added together, based solely on market cap. So you could always just buy a few shares of TM and HMC, which have a higher dividend yield than than SPY or even EAFE or EM ETFs by the way, to satisfy your desire to bet against TSLA without actually betting against TSLA.

Seems unlikely that if TSLA comes crashing it will be a gradual downward slope over a long period of time that would be easy to profit from. The faster the crash, the more it makes sense to just stay out of the way.

jacob
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Re: Amateur Recommendations Log (what NOT to buy)

Post by jacob »

Lucky C wrote:
Thu Dec 31, 2020 11:28 am
I don't know many people who take investing seriously, so the stock mentions I hear are few and far between and usually mean something is currently in an overextended mania. I haven't been seeing other names mentioned from anyone I know personally. IOW I am trying to avoid selection bias and will try to remember to update this the next time I hear an investment mentioned out of the blue.
Me neither insofar I correct for the fact that most in my circle(s) come from the personal finance community and thus would have an above average interest in investing. Outside of that Venn circle, that is, at the taxi-driver level, it's exclusively about bitcoin and how it's eventually going to worth zillions.

I do know one Tesla fanboy, who got his own Tesla (I forget which one) after putting in the pre-order on day 1. He's been talking endlessly about Tesla since the beginning and even bought a not-a-flamethrower. However, I don't recall him ever talking about the stock itself.

I also know a robinhooder (outside the PF community) who almost exclusively trades in ticker symbols I don't recognize. But yeah, I know a robinhooder.

Summary: +1 for TSLA and BTC but not that widespread (yet?).

anesde
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Re: Amateur Recommendations Log (what NOT to buy)

Post by anesde »

jacob wrote:
Tue Jan 05, 2021 10:22 am

But yeah, I know a robinhooder.
#streetcred

I had a conversation with a younger colleague who’s interested in FIRE (about 2 years out of college). I asked how his FIRE plans were coming along and he said they were vastly accelerated due to crypto rise. He proceeded to go into the complications of buying/selling/holding along with rebalancing the basket of cryptocurrencies he owns. Made me feel old, out of touch, and happy that I don’t deal with that :)

Lucky C
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Re: Amateur Recommendations Log (what NOT to buy)

Post by Lucky C »

NIO

I had heard of the company before and knew the stock was getting popular, but today two different people I know mentioned the stock. Other popular tech names, which I had heard of before, were mentioned as well.

Friend said that his girlfriend's dad started taking up day trading and that anyone with enough discipline can make a little money every day.

This might be the top, folks.

Alphaville
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Re: Amateur Recommendations Log (what NOT to buy)

Post by Alphaville »

Lucky C wrote:
Tue Jan 05, 2021 8:43 pm
NIO

[…]
anyone with enough discipline can make a little money every day.

This might be the top, folks.
:D

sure, in a bull market everyone can make money every day.

no idea what nio is. but i reinjected my nano btc position as a lottery ticket purchase.

missed the rally from 20 to 26k after taking profits...

but now i refer to the above principle: bubble or not, it's a bull market for crypto. so yes i just re-bought purely on market sentiment which is fueled by the "stimmy" trade lolol:

https://www.ft.com/content/7db70ec4-c61 ... 4e9b10717d

put a stop loss on it and let it fly...

Lucky C
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Re: Amateur Recommendations Log (what NOT to buy)

Post by Lucky C »

BTC reminds me of Silver in 1979-1980, not that I was around for that. If the similarity holds (no reason to believe it will, just an interesting comparison), we've got another 40% to go until the top comes on the 18th of this month. I'll post my chart on the Bitcoin thread.

biaggio
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Re: Amateur Recommendations Log (what NOT to buy)

Post by biaggio »

Similar here - a while ago a friend of mine with whom I almost never talk about investing wrote if I've seen how well TSLA and BTC are doing.

EDIT: I also saw other obscure EV stocks recommended on slack channels at work.

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Lemur
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Re: Amateur Recommendations Log (what NOT to buy)

Post by Lemur »

My younger brother who has been anti-finance for as long as I can remember (he shuns this stuff; he is studying neuroscientist though), asked me about getting started in investing.

I always said the day that this happens, we're at the top lol.

ertyu
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Re: Amateur Recommendations Log (what NOT to buy)

Post by ertyu »

i am burining with desire to buy tsla puts. this is your timing signal, tsla going higher next week :lol:

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Re: Amateur Recommendations Log (what NOT to buy)

Post by jacob »

Seems relevant that Michael Burry just revealed that he has a 'big short' position on TSLA.

I'm seeing the same kind of chatter around TSLA from the informed investor crowd as with AMZN back when P/Es were easily triple-digits. Of course, such chatter which tends to put down pressure only tends to appear after the position has been established.

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