All Aboard The ‘YOLO’ Train Wreck Express


Manage episode 152573505 series 1063725
על ידי Joshua Belanger התגלה על ידי Player FM והקהילה שלנו - זכויות היוצרים שמורות למפרסם, לא ל-Player FM, והשמע מוזרם ישירות מהשרתים שלכם. הירשמו כדי לעקוב אחר עדכונים ב-Player FM, או הדביקו את כתובת העדכונים באפליקציות פודקאסט אחרות.
I just got done with my morning workout and walking around the Farmers Market to get fresh eggs and bacon for the week. I wasn't sure what I was going to talk about today, but luckily there's the internet, and things will find you. I was sipping my coffee and saw an article on MarketWatch talking about a high schooler who turned $900 into $55K in just 12 days. Jeez... here's another article that got picked up because of fake profits that nobody took the time to check the facts. The article talked about a Reddit forum with 38,000 active subscribers who happened to be mostly millennials who idolize Martin Shkreli, the former CEO of Turing Pharma that increased the drug 5000%. Here's a quote from one of the members about Shkreli: "He is living their dream. He got rich. He might have lied and cheated along the way, but [on the forum] that's encouraged." Yeah, the same guy that is facing seven counts of securities fraud and conspiracy in connection with previous work at a hedge fund, and he faces up to 20 years in prison if convicted. This group of millennials prides themselves on making YOLO trades, which are all or nothing bets. YOLO is short for "You Only Live Once." Non-millennials would call these airport trades. That high schooler's YOLO trade supposedly involved buying nearly 200 put option contracts in the SPY for a day trade. In the thread, he commented that his mom was going to take him to see "The Big Short" to celebrate. Bless his naiveness, right? I have no idea how he took $900 to $25,000, but for his big payday to $55,000 he had bet his whole account at that time with buying all those puts that totalled around $25,000. Now, I think you know what this sounds like, right? Shooting craps at the Vegas casino table. You see someone get hot out of the hundreds of people before them, and they get caught in their ego with people watching and cheering them on, but eventually the odds catch up. Unfortunately, as you can see most approach trading options this way and abuse it. Leverage can be good, but it also can be a train wreck if you don't approach it the right way. Most look to go down this road; high risk, high reward, but low probability. Yes, you can win big, and there have been people who have made millions doing it. However, the are only a few of them that were able to keep their profits with walking away. The others eventually lose it all and keep chasing that big hit again with never being able to make a dime. Then there are the other investors that have learned to how to approach trading options that have allowed them to generates consistent returns. It's not sexy, and there's no YOLO type of trades involved, but it works and it's based on proven numbers that come right from the market. To your wealth, freedom and options! Joshua Belanger

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