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SOOPOO
SOOPOO
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February 16th, 2021 at 3:36:00 PM permalink
Quote: darkoz

Investing a million to make $1000 sounds like betting $1 on 35 numbers at roulette to make a $1.

Nice winning system you have there



Sorry dark.... investing $1million in a real company is not like Ďbetting $1millioní. If MD is wrong and the stock goes from 3300 to 3200 he hadnít lost a million, heís Ďlostí like $30k. And as youíve read, if you are willing to hold, as MDawg does, he only loses if the stock NEVER hits a new all time high. NEVER. He does give up the use of the $1million until it does.

If he picked a stock like ENRON, that went fully bankrupt (like I did!) , then yes, he COULD lose the full million. I am no expert on AMAZON, but I can envision many swings in its stock price... but not itís bankruptcy in the decades to come.
MDawg
MDawg
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February 16th, 2021 at 4:00:32 PM permalink
On the other hand, CYDY's entire future is based on one event's happening or not happening. Poor test results and BAM! back to ten cents a share. Biotechs are always a gamble, but penny biotechs are an even greater gamble.

CytoDyn And Humanigen: Ticking Time Bombs, Impending Results Likely To Fail

But even with a stock like CYDY, the chance that it will go to 6 or 7 again is higher than that it will go back to 10. So a buyer who has averaged in shares at a for example 7 basis has a higher chance of success than one who has made a single purchase at 10.

I tell you itís wonderful to be here, man. I donít give a damn who wins or loses. Itís just wonderful to be here with you people.
MDawg
MDawg
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February 16th, 2021 at 4:36:33 PM permalink
Quote: SOOPOO

Sorry dark.... investing $1million in a real company is not like Ďbetting $1millioní. If MD is wrong and the stock goes from 3300 to 3200 he hadnít lost a million, heís Ďlostí like $30k. And as youíve read, if you are willing to hold, as MDawg does, he only loses if the stock NEVER hits a new all time high. NEVER. He does give up the use of the $1million until it does.

If he picked a stock like ENRON, that went fully bankrupt (like I did!) , then yes, he COULD lose the full million. I am no expert on AMAZON, but I can envision many swings in its stock price... but not itís bankruptcy in the decades to come.


Right. The main thing I lose, actually, as you allude, if I get stuck in a trade is the opportunity loss of those trade buying dollars that I won't be able to use for another trade. And if I get stuck in a 100, or 200 shares of say, AMZN, no big deal, I will keep trading and put that particular trade on an independent back burner until it comes back. 900 shares, okay, I might at that point TURN OFF the trading machine until I am out of that trade. And at that point, yes, I lose a lot of expectation profit because I stop trading.

I expect to get stuck a few times a year, and I just average in and ride it out. As I recall, the last time I was stuck was towards the end of 2019, and I got out of the trade at a profit during the Vegas trip while we were in Vegas Feb/March 2020. That was quite a happy day, as I won at the tables and saw that my GTC order to sell that had been set some weeks prior had filled finally. During the pandemic, AMZN actually kept going up as soon as people reasoned that online sales would jump during lockdown, so I didn't have to worry about getting stuck in AMZN trades much, or at least not for long, during that period. I haven't been stuck in a while, but I know it will happen again. I will just average in if necessary, and ride it out.

For me to get stuck, the stock REALLY has to drop on a given day AND not recover whatsoever. If you follow my trades you may see what a bottom feeder I am and that I don't jump in lightly.

One thing - when I do get stuck, I switch from day trade to swing trade mentality, and RAISE my sell price. I'm not going to hold a loser for days, weeks or months, just to make a few points. What many don't understand is that if a stock makes it all the way back to a certain price, it always breaks through and goes higher.
I tell you itís wonderful to be here, man. I donít give a damn who wins or loses. Itís just wonderful to be here with you people.
darkoz
darkoz
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February 16th, 2021 at 6:08:39 PM permalink
Quote: MDawg

On the other hand, CYDY's entire future is based on one event's happening or not happening. Poor test results and BAM! back to ten cents a share. Biotechs are always a gamble, but penny biotechs are an even greater gamble.

CytoDyn And Humanigen: Ticking Time Bombs, Impending Results Likely To Fail

But even with a stock like CYDY, the chance that it will go to 6 or 7 again is higher than that it will go back to 10. So a buyer who has averaged in shares at a for example 7 basis has a higher chance of success than one who has made a single purchase at 10.



I agree with most of this assessment except that it is a one shot deal.

You are thinking the drug is designed for Covid-19. It's already gone through years of HIV successful trials and has many other indications.

Even if it's not proven good against covid (and yes it will drop) it will bounce back on the HIV approval which is also very close.

900 HIV patients on the drug for over five years successfully will get this approved.

It's also being examined for Cancer and Liver disease indications

I don't see that as a one shot only scenario.
For Whom the bus tolls; The bus tolls for thee
MDawg
MDawg
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February 16th, 2021 at 6:22:36 PM permalink
Yes, DarkOz is right. CYDY does have more than just one thing in the hopper.

But to use another analogy, biotechs like CYDY have two or three pots to p in. While a stock like AMZN has dozens of pots of different shapes and sizes.
I tell you itís wonderful to be here, man. I donít give a damn who wins or loses. Itís just wonderful to be here with you people.
darkoz
darkoz
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February 16th, 2021 at 6:36:44 PM permalink
Quote: MDawg

Yes, DarkOz is right. CYDY does have more than just one thing in the hopper.

But to use another analogy, biotechs like CYDY have two or three pots to p in. While a stock like AMZN has dozens of pots of different shapes and sizes.



The stock market. The biggest Casino in the world.

Isn't that a famous quote?
For Whom the bus tolls; The bus tolls for thee
MDawg
MDawg
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February 22nd, 2021 at 7:10:46 AM permalink
Quote: MDawg

Soopoo, if you don't mind my asking, how is your brother in law dealing with the tax return end of year for his day trading? The wash sale rule shouldn't apply to us traders but there are complicated ways to deal with this. Such as for example declaring oneself a trader and using the mark to market method of accounting. I ran into this issue with the wash sale rule the first year my stock trades started to run into serious short term gains.

In case you don't know, typically if you buy a given stock and sell it at a loss, and rebuy within 30 days, the wash sale rule precludes you from taking the loss on the first trade. But you are allowed to add the loss to increase the basis of the next trade in the same stock.

But then - consider what I do all the time, for example buy 100 shares of a stock at X price, then another 100 shares of the stock at Y price (lower than X), and then sell all 200 shares at a price that is above the average basis of the two trades combined. For purposes of even LIFO accounting, I sold the first 100 shares at a loss, the second 100 shares at a profit, such that I made money on the "combined" trade, but the wash sale rule would typically disallow the loss from the first 100 share lot, especially since I am trading additional shares of a stock I hold long term, and never actually hold 0 shares of the given stock - never actually close out the position "entirely."

Please ask your brother in law I am curious as to how he deals with this, or plans to deal with this. There are different ways to avoid the wash sale rule for day traders, just wondering how he does it maybe his method is better than mine.

Typically day traders are shocked by the 1099-B they receive at the end of the year when it indicates some massive "disallowed" wash sale figure. I know when this first happened to me I had some long talks with my CPA.



Quote: SOOPOO

I didnít ask him the exact question that you pose. But I did have a long chat with him about taxes last week. He trades in two separate accounts. One retirement so no tax consequences. The other one ha says virtually all the money he makes is taxable as ordinary income. He says he rarely keeps something long enough to make it a capital gain. You are willing to get Ďstuckí with what you consider a Ďgoodí company, he isnít. He will take a loss periodically. He will buy Ďbadí companies, that for whatever reason he thinks in short term will go up. I do know he is Ďregisteredí as a professional trader, whatever exactly that means. He pays quarterly estimated taxes, as he is a part time real estate agent and makes some money, but not consistent, doing that too.

Edit.... I do not think I actually answered your question. But I think since he does not trade shares that he is holding long-term the question really doesnít apply to him.



Quote: MDawg

It sounds like he elected the trader status with the IRS so as to exempt himself from the wash sale rule.

Last edited by: MDawg on Feb 22, 2021
I tell you itís wonderful to be here, man. I donít give a damn who wins or loses. Itís just wonderful to be here with you people.
MDawg
MDawg
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February 22nd, 2021 at 7:25:54 AM permalink
Quote: MDawg

Martingale in a casino. Averaging in with a stock trade. These are NOT the same.

First off, averaging in when buying a stock is what you're Supposed to do. If you're planning to buy 100 shares of a given stock, whether for investing or trading, you should never buy all 100 shares at once. You should buy 50 or even just 25, and then see what happens. If it goes straight up, sure, you might get shut out from that lower basis, but if it drops then you are able to average in more shares and lower your basis. Typically there is no way to get the absolute bottom or top, so averaging in is the safe way to do it.

But besides that, on a martingale for say, a coin toss, the probability of the event's coming in your favor remains the same for each coin toss. Lose eight coin tosses in a row, and the chance that you will win the ninth remains just 50-50.

On a stock, as the price drops, and you average in shares, the stock needs to return to a lower price point than your initial target, so no matter what stock it is, even disregarding its chart and history, the intrinsic probability of the event's coming to pass increases. The stock has less distance to travel to put you back in the green. If some of the mathematicians on here want to calculate, for example, the chance that AMZN will hit 3350 again versus that it will hit 3300, based on its history, I am sure that they will agree that the chance of its bouncing back 32 points from its close today is higher than its rising 82 points. And even disregarding any history and considering pure math, still the chance that something will return to a lower point is higher than that it will return to a higher.

So if I get stuck in an AMZN trade at 3350 and I hold my horses until it hits 3250 and buy another lot of shares, the chances that my now double the amount of shares will return to green at the new basis of 3300 is higher than that it will return at 3350, no matter how you slice it.

As a practical matter, I have NEVER had a trade not return to higher than where I initially bot into it - such that all the averaging in did is get me back into the green FASTER. That's a pretty solid track record that defies any sort of luck, and has as much to do with the stocks I pick constantly hitting new ATHs as my skill in choosing entry and re-entry (averaging in) points.

But even if I knew nothing at all, if I needed a given stock to get me into the green at a lower price versus a higher price, obviously the lower that price is the better my chances are at success.



What I did today (which is what I do many days), illustrates the above as well as brings up the wash sale rule that I mentioned to Soopoo.

Friday I bot 100 AMZN at 3285, for a trade. AMZN collapsed. It didn't go back anywhere near 3285 again.

This morning, I did some calculations and realized that I needed to average in more shares to get out of this trade at a profit. I noticed that AMZN was slightly above 3208 in the pre-, but that wasn't good enough and I assumed it would fall further anyway. So I put in an order at 3201 first, then cancelled that out and thought okay maybe 3198. AMZN didn't go quite that low right away - only to 3200 and change, so I LOWERED the buy to 3195, for 200 shares, figuring that if it did drop to 3200 again it would drop a bit further even (you'll have to take the $15,000 MDawg stock trading course to understand why I figured that) which would bring my average to 3225 for the 300 shares including the 100 from Friday. If it filled.

Luckily, it did dip that low.

Now, there were a lot of fits and starts including that my 300 share order for 3226 flashed across the screen, wasn't filled, and AMZN dropped all the way back to 3116. But I hung tough, and on the third rise back up I got a fill, and AMZN actually went all the way to 3232 looks like. But, my objective was to get out of Friday's trade at a profit by averaging in, and I did that. Mission accomplished.

And again, as far as this was simply Martingaling - try to tell me that the probability that AMZN would hit 3226 today to make Friday's trade profitable was not higher than that the original 100 shares would make it back above 3285 today? Which, again, is why averaging in stock purchases is not the same as Martingaling a bet on a coin toss where the probability of success never changes from toss to toss.


And now - the wash sale rule. You see, I sold 100 shares from Friday that I bot at 3285, at a LOSS today, at 3226. However I sold 200 shares I bot today at 3195 at 3226, at a profit. Combine the two - I squeaked out a profit. And even though AMZN DID make it to 3226 and higher for me, it is now 3192 so it just goes to show how trading and long term are two very different animals.

Anyway - as to this particular trade - pursuant to the wash sale rule, because I will still hold long term shares of AMZN (besides the fact that I will buy back more AMZN for more trades if not later today, inevitably soon), the LOSS from the 3285 to 3226 trade is disallowed, which would leave me with a huge profit to reckon taxes for on the 3195 to 3226 trade, and nothing to "offset" against it. I would be in that "absurd" position of being disallowed from declaring the "loss" on the first portion (called "lot") of the trade, if I had to follow the wash sale rule - which traders as long as they elect that status with the IRS, are exempted from the wash sale rule by some "legal tax fiction" which is that at the end of the year their positions are "declared" to have been all closed out. We traders are also allowed to deduct any computer equipment, software, internet costs, professional subscriptions that are stock related, research costs, etc. - against our trading profit.

I assume this is what your brother in law does Soopoo - elect trader status with the IRS - but I wondered if maybe he had found another way to do it. Always room for thought when it comes to dealing with the IRS.
Last edited by: MDawg on Feb 22, 2021
I tell you itís wonderful to be here, man. I donít give a damn who wins or loses. Itís just wonderful to be here with you people.
MDawg
MDawg
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February 22nd, 2021 at 7:31:21 AM permalink
Already back in the saddle. Quick five hunny on AMZN.



BTC is dumping today though. Elon's "seem high" statement finally got to people I suppose.
https://www.cnbc.com/2021/02/22/bitcoin-btc-price-down-10percent-after-elon-musk-says-prices-seem-high.html
There is sometimes no rime or reason to that guy's tweets. Definitely a bipolar disorder going on there.

Asked if he might be bipolar, he replied, ďYeah.Ē
https://www.nytimes.com/2018/08/15/business/elon-musk-tesla-board.html

Elon Musk admits to Ďunrelenting stress,í says he may be bipolar.
https://www.marketwatch.com/story/elon-musk-admits-to-unrelenting-stress-says-he-may-be-bipolar-2017-07-31
I tell you itís wonderful to be here, man. I donít give a damn who wins or loses. Itís just wonderful to be here with you people.
MDawg
MDawg
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February 22nd, 2021 at 7:38:46 AM permalink
Meantime back at the CYDY ranch, it's below 5 again, and was as low as 3.85 today.


The beginning of the end, or just another dip?
https://seekingalpha.com/article/4407813-cytodyn-reliable-in-all-wrong-places
Last edited by: MDawg on Feb 22, 2021
I tell you itís wonderful to be here, man. I donít give a damn who wins or loses. Itís just wonderful to be here with you people.

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