I'll explain what I believe happened today because I don't have shit to do and left my lab early.
Many shareholders, even in the OTC, try to minimize risk as much as possible if they are unsure about an upcoming announcement/event. One way to do this is to "sell into news." Large investment firms often do this prior to earnings announcements (refer to my post a few minutes ago about NVDA, AAPL, and AMZN). There's no risk in selling for a profit. However, if the speculated news that is driving the price increase prior to the news' announcement is not good, then the investors who sold have lost nothing. But if the news sends the stock soaring (like NVDA today), then the firms just missed out on a huge profit. It's the kind of hindsight that keeps you up at night, knowing that you just missed out on life-changing profit if only you'd remembered that the company's intraday activity isn't reflective of its fundamentals and future growth potential. Emotions are very powerful, especially fear. Never let it influence a decision that involves money.
A lot of day traders have been buying USGL into tomorrow's event, driving the price up and creating a sort of "vacuum" that attracts volume and liquidity, so it's easy to flip the stock and make a quick profit. That's what happened today. But the reason the price continues to climb every month since last November is that there is demand for USGL shares. The profit taking took 10% away from us today, but we're up 60% over the past 5 trading days. This tells us two things: 1) shareholders expect tomorrow to be significant, and 2) day traders took their profits to minimize their risk. Their purpose is to take a quick profit and move on. They don't invest. Historically, they've been on the losing side of the battle with investors like Warren Buffet ($74.7 billion net worth) and George Soros ($25.2 billion net worth). If you want enough money for the mortgage or rent, sure - go ahead and day trade. You might make some money in the short term. But historically, "buy and hold" has always beat it. Always.
> Some Unsolicited Investment Advice: volatility is near its historical low, which creates market conditions that encourage growth through investment by those who see relative prices of stock as being very low. Warren Buffett just tripled his stake in AAPL in part due to this plunge in volatility. Use this to guide your investment decisions. Lower volatility = bull market (Delta, feel free to add to this) <
A $10,000 investment in AAPL in 2002 would've been worth over $5,000,000 by early 2016. FIVE FUCKING MILLION DOLLARS (sorry, Joe, but ethics has no place in Capitalism). All you had to do was buy and hold, and at the end you'd pay a 20% flat capital gains tax. Day traders pay short-term tax, which reduces profit, and they do not make 50x returns over 14 years. Not even close. If they're lucky, they'll make 25% per year having to trade full time, and at the end 40% of it goes back to Uncle Sam.
I'm quite confident that today's activity was driven by day traders. They brought us some much-needed liquidity, and for that I must thank them. But they're going to get crushed over time by the "buy and hold" investor. It's inevitable.
Berkshire Hathaway doesn't do anything special - they just buy stocks and private companies. That's it. They have about 20 employees at their corporate headquarters in Omaha, none of whom look like they can add 2+2. But they control over $400 billion, and they do it through "buy and hold." Warren bought Coca-Cola in the 80's and hasn't sold it since. His $1 billion original investment is worth over $18 billion today. Berkshire Hathaway, through "buy and hold," has turned investments of $10,000 into $88 million since the company's inception. Day trading doesn't make that sort of return. It's just impossible.
So when you see USGL down 10% today, go ahead and laugh your ass off knowing you held for a 60% gain in 5 days and a 4,500% gain since November, while day traders might've made 10%, if they were lucky, after commission and taxes.
You won.
Many shareholders, even in the OTC, try to minimize risk as much as possible if they are unsure about an upcoming announcement/event. One way to do this is to "sell into news." Large investment firms often do this prior to earnings announcements (refer to my post a few minutes ago about NVDA, AAPL, and AMZN). There's no risk in selling for a profit. However, if the speculated news that is driving the price increase prior to the news' announcement is not good, then the investors who sold have lost nothing. But if the news sends the stock soaring (like NVDA today), then the firms just missed out on a huge profit. It's the kind of hindsight that keeps you up at night, knowing that you just missed out on life-changing profit if only you'd remembered that the company's intraday activity isn't reflective of its fundamentals and future growth potential. Emotions are very powerful, especially fear. Never let it influence a decision that involves money.
A lot of day traders have been buying USGL into tomorrow's event, driving the price up and creating a sort of "vacuum" that attracts volume and liquidity, so it's easy to flip the stock and make a quick profit. That's what happened today. But the reason the price continues to climb every month since last November is that there is demand for USGL shares. The profit taking took 10% away from us today, but we're up 60% over the past 5 trading days. This tells us two things: 1) shareholders expect tomorrow to be significant, and 2) day traders took their profits to minimize their risk. Their purpose is to take a quick profit and move on. They don't invest. Historically, they've been on the losing side of the battle with investors like Warren Buffet ($74.7 billion net worth) and George Soros ($25.2 billion net worth). If you want enough money for the mortgage or rent, sure - go ahead and day trade. You might make some money in the short term. But historically, "buy and hold" has always beat it. Always.
> Some Unsolicited Investment Advice: volatility is near its historical low, which creates market conditions that encourage growth through investment by those who see relative prices of stock as being very low. Warren Buffett just tripled his stake in AAPL in part due to this plunge in volatility. Use this to guide your investment decisions. Lower volatility = bull market (Delta, feel free to add to this) <
A $10,000 investment in AAPL in 2002 would've been worth over $5,000,000 by early 2016. FIVE FUCKING MILLION DOLLARS (sorry, Joe, but ethics has no place in Capitalism). All you had to do was buy and hold, and at the end you'd pay a 20% flat capital gains tax. Day traders pay short-term tax, which reduces profit, and they do not make 50x returns over 14 years. Not even close. If they're lucky, they'll make 25% per year having to trade full time, and at the end 40% of it goes back to Uncle Sam.
I'm quite confident that today's activity was driven by day traders. They brought us some much-needed liquidity, and for that I must thank them. But they're going to get crushed over time by the "buy and hold" investor. It's inevitable.
Berkshire Hathaway doesn't do anything special - they just buy stocks and private companies. That's it. They have about 20 employees at their corporate headquarters in Omaha, none of whom look like they can add 2+2. But they control over $400 billion, and they do it through "buy and hold." Warren bought Coca-Cola in the 80's and hasn't sold it since. His $1 billion original investment is worth over $18 billion today. Berkshire Hathaway, through "buy and hold," has turned investments of $10,000 into $88 million since the company's inception. Day trading doesn't make that sort of return. It's just impossible.
So when you see USGL down 10% today, go ahead and laugh your ass off knowing you held for a 60% gain in 5 days and a 4,500% gain since November, while day traders might've made 10%, if they were lucky, after commission and taxes.
You won.
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