AAPL stock, from the release of the iPhone until now, has been an amazing investment.
Some amateur analysts would beat the professionals in predicting quarterly reports.
Then greed set in.
https://fortune.com/2013/03/04/the-rise-and-fall-of-andy-zak...
Just imagine if investors in his fund had just bought the stock instead of options (calls).
Similar situation as above.
Don't invest what you can't lose. Slow and steady and living below your means wins the race.
USA tax laws favor investment income over labor income. If no wage income, first $75k of qualified dividend income is federal tax free. Most qualified dividends pay 2-4% so you need $2 million dollars to get $6k post tax dollars a month.
Gist of the story is that an amateur law student was amazingly good at predicting AAPL earnings every quarter. Graduated, and started his own hedge fund.
Publicly advocated buying options because AAPL could only go up bc profits were increasing. That's also what he did with investors' money. Options expired worthless. All $$ lost.
AAPL price did not follow increase in earnings in straight line.
Options have more degrees of freedom than stocks. Since they're derivatives, those degrees must ultimately collapse to the delta, i.e. to the stock's price movement, as the sole non-zero sum source of profit. As a result, there are more ways for professionals to monetize their edge.
Right, but there are also traders who have made 10x or more. Many have turned a few thousand into 5 or 6 figures. You have to find the right strategies and traders to follow. There are traders who demonstrate skill, by consistently making profits. This involves optimal position sizing and optimal call option duration and strike prices and other factors such as momentum.
With a large enough group consistently making profits would not necessarily be a demonstration of skill. Even if the returns were completely random several traders would constantly perform well above average.
In fact, I would argue that the most well-known posts are often from people losing huge amounts of money, eg. "Guh".
Before seeing that I would have claimed basically any sincere strategy in good faith would be a winner right now. Clearly no, there's plenty of people who managed to burn through thousands in these conditions.
Really illustrates the difference between gambling and investing.
It's probably excellent advice to never look at WSB and regard it as 100% noise.
Randomly drawing letters out of a hat and buying those stocks would have produced dramatically better results.
Edit: i just bought a $100 or so of 4 stocks by randomly selecting letters until I got a match. Let's see how this strategy pans out. I bet it won't go to zero