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Originally Posted by WSSix
Congrats Don! Best of luck to you in your retirement.
I had some extra bonus money I decided to dump into my brokerage account instead of savings. I'm looking at making some purchases today.
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I don't want to be a sooth sayer trying to say what I THINK the market will do.... but there are some dynamics that will come into play.
#1 --- this thread is about INVESTING. There is so much more to a market... but we're trying to build long term - cash creating investments.
So --- Here's some dynamics in a wild ass market like this. Many people are SHORT the market waiting for an opportunity to cover. What does this mean?? It means that a SHORT SELLER can sell a stock he doesn't own.... collect the cash from the sell -- and hopefully wait to buy the shares at lower prices than he sold at --- because he OWES the brokerage the shares he sold. If I was a short seller -- I'd have been covering all my shorts this morning... and making very nice gains on the spreads.
A short in NFLX --- just a "scenario".... guy sells 1000 shares short at $122..... and covers the short today at $99.... he makes 23K on that trade (minus interest expense etc).
#3 --- In my old days of trading.... Anything I bought this morning I'd be flipping out this afternoon (and then go play a round of golf!). Let's take a normal name ---- Altria (MO) --- was down under $50 early this morning. If you'd have bought 5000 shares at $50.50 ---- and it's back to $52 this afternoon ---- that's a buck fifty times 5000 shares -- or a quick $7,500 "gain".
SHORT TERM TRADES (GAINS) INCUR MAX TAX RATE!! So we're talking GROSS gains here.